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New Hobbs Generating Station now on line

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New Hobbs Generating Station now on line

September 28, 2008

HOBBS, N.M. -- After more than 16 months of construction, the new Hobbs Generating Station is now operational and delivering more efficient energy, cost savings and environmental benefits to a booming regional electricity market.

The plant, located west of Hobbs, N.M. near Xcel Energy’s Cunningham and Maddox generating stations, was developed by and is owned by Lea Power Partners. Xcel Energy is purchasing the output of the 600-megawatt plant through a long-term purchased-power contract.

The plant’s efficient combined-cycle technology will bring multiple benefits to Texas and New Mexico customers. And as the company moves forward into a future marked by tighter fuel supplies and stricter environmental rules, the success of the Hobbs plant will likely be replicated across the entire system.

“The plant delivers needed power in the near term, but its lasting legacy will be the fuel and cost savings it will deliver, along with a reduction in emissions and a reduction in our use of ground water,” said David Eves, president and CEO of Southwestern Public Service Company, an Xcel Energy company.

And as resources such as the Hobbs plant are added to the system, the company will continue to seek power generation sources that will save on customer fuel bills. The annual cost of purchasing power from the new Hobbs plant is about $45 million, but the plant’s combined-cycle technology will deliver total fuel savings of between $50 and $55 million annually as less-efficient gas-fired plants are ramped down to accommodate the power from the new plant during off-peak periods.

Combined-cycle technology employs both a gas combustion turbine and a steam-driven turbine to gain maximum efficiency. At the Hobbs plant, the waste heat from two combustion turbines feeds into boilers, producing steam to drive an additional steam turbine.

Eves said the addition of these fuel-saving benefits marks a turning point in the company’s operations in Texas and New Mexico.

“We’ve entered a new era that will usher in a huge investment in more efficient technology, which should help us meet future growth even as we lower fuel costs,” he said.

Another advantage of using fuel more efficiently is the reduction of greenhouse gas emissions, Eves pointed out. In fact, he said, efficiency improvements such as the Hobbs plant will help Xcel Energy achieve its carbon reduction goals without having to raise overall prices significantly.

But there’s one more thing that sets Hobbs apart from the rest – its use of water. With the exception of plants in Amarillo and Lubbock that can use treated sewage effluent, all other Xcel Energy plants in the region rely on underground water for cooling purposes. Water tables across the region are falling, and eventually it could become economically infeasible to tap this resource.

Instead of using large amounts of precious groundwater to condense steam, Hobbs is employing giant fan-cooled radiators in its steam cycle. This system uses 90 percent less water than comparable generating stations.

Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas company with regulated operations in eight Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.3 million electricity customers and 1.8 million natural gas customers through its regulated operating companies. Company headquarters are located in Minneapolis.

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