Xcel Energy (NYSE:XEL) hopes to get regulatory approval for adding 600 MW of new wind energy in the Upper Midwest in time to start construction by year’s end and qualify for the extended production tax credit (PTC).
The 33% increase in Xcel’s Midwest wind portfolio is laid out in a July 16 filing with state regulators.
Following a request for proposals (RFP) in February, Xcel Energy picked three projects to submit for regulatory review. They include:
• Courtenay Wind a 200-MW project near Jamestown, N.D., under a power purchase agreement with Geronimo Energy;
• Odell Wind, a 200-MW project near Windom, Minn., also under an agreement with Geronimo Energy; and
• Pleasant Valley, a 200-MW project near Austin, Minn., submitted by RES America Developments. 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.
Courtenay Wind represents a nearly $320m investment, according to a Geronimo Energy website. Both the Courtenay and Odell wind projects will each create 10-to-12 permanent jobs, Geronimo said in a July 16 news release.
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.
“Wind prices are extremely competitive right now, offering lower costs than other possible resources, like natural gas plants,” said Dave Sparby, president and CEO of Northern States Power Co.-Minnesota, an Xcel Energy company.
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.
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.
Other Xcel subsidiaries in Colorado and New Mexico have also been looking to add wind power of late. Xcel’s Southwestern Public Service recently sought approval in New Mexico to purchase almost 700 MW of additional wind energy through three power contracts.