Citing the ability to lower customer costs while cutting carbon emissions, Xcel Energy (NYSE: XEL) has submitted to state regulators a proposal to add 600 megawatts of wind power 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.