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Three 200-megawatt projects offer attractive prices for customers
MINNEAPOLIS – Citing the ability to lower customer costs while cutting carbon emissions, Xcel Energy today submitted to state regulators a proposal to add 600 megawatts of wind resources in its Upper Midwest service territory. Construction would begin in time to qualify for the extended federal Production Tax Credit.
“These projects will lower our customers’ bills, offer protection from rising fuel costs, and provide significant environmental benefits,” said Dave Sparby, president and CEO of Northern States Power Co.-Minnesota, an Xcel Energy company.
The additional 600 megawatts of wind power – enough to serve 180,000 homes – would lower customer costs by $180 million over the lives of the projects. “Wind prices are extremely competitive right now, offering lower costs than other possible resources, like natural gas plants,” said Sparby. “These projects offer a great hedge against rising and often volatile fuel prices.”
At the same time, the projects will reduce carbon emissions by 1.2 million tons each year in Xcel Energy’s Upper Midwest service territory, where the company already is on track to reduce carbon emissions by 30 percent by 2020 from 2005 levels.
"With 1,800 megawatts of wind on our system in the Upper Midwest, we are already ahead of meeting state renewable energy targets,” Sparby continued. “These projects position us to continue to meet those targets while saving our customers money."
Following a request for proposals in February, Xcel Energy selected three projects to submit to regulators for review:
• Courtenay Wind Farm, a 200 megawatt project near Jamestown, N.D., under a power purchase agreement with Geronimo Energy;
• Odell Wind Farm, a 200 megawatt project near Windom, Minn., also under a power purchase agreement with Geronimo Energy; and
• Pleasant Valley, a 200 megawatt project near Austin, Minn., submitted by RES America Developments Inc. RES would develop the project and then transfer ownership to Xcel Energy. The Pleasant Valley project is adjacent to the Grand Meadow wind project, which Xcel Energy owns.
Xcel Energy submitted the projects to the Minnesota Public Utilities Commission and the North Dakota Public Service Commission for consideration and notified regulators in South Dakota, Wisconsin and Michigan. The company indicated it would continue to evaluate projects and could make additional proposals if similar benefits can be achieved.
If approved by regulators, construction on the projects will begin immediately in order to qualify for the federal renewable energy tax credits. All three projects are scheduled to be in service by the beginning of 2016.
Today’s announcement is the third wind acquisition proposal from the company in recent weeks. Xcel Energy’s operating companies in its Upper Midwest, Colorado and Texas-New Mexico service territories each requested wind project proposals earlier this year to determine if Congress’ extension of the federal renewable electricity Production Tax Credit had made available cost-effective projects that would benefit customers.
“We are committed to meeting our customers’ needs in clean and affordable ways,” said Ben Fowke, chairman, president and CEO of Xcel Energy. “Wind power is simply the cheapest resource available right now, and we are taking the opportunity afforded by the PTC extension to further shape our systems for the future.
“These announcements demonstrate that we can achieve both environmental and economic benefits for our customers.”
In January, Congress extended the PTC to projects that begin significant construction activities by the end of 2013. Xcel Energy supported the PTC extension and also supports the Consumer Renewable Credit, a proposed tax credit that would provide low-cost federal support of continued, cost-effective wind development such as the projects proposed in today’s filing.
Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas company that provides a comprehensive portfolio of energy-related products and services to 3.4 million electricity customers and 1.9 million natural gas customers through its regulated operating companies in eight Western and Midwestern states. Company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com.
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Why do our products and services differ based on state? Because our business is regulated by state. We have regulated operations in eight Western and Midwestern states. The different regulatory body for each state we serve determines what products and services we deliver in that state.