Xcel unit to buy 700 MW of wind capacity from three projects

Xcel Energy’s (NYSE: XEL) Southwestern Public Service subsidiary is seeking approval in New Mexico to purchase almost 700 MW of additional wind energy through three purchase agreements.

Xcel said July 10 that these wind purchases will come from three facilities to be located in Oklahoma, Texas and New Mexico:

  • 199 MW from NextEra Energy Resources/Mammoth Plains Wind Energy Center located in Dewey and Blaine counties, Okla.
  • 249 MW from NextEra Energy Resources/Palo Duro Wind Energy Center located in Hansford and Ochiltree counties, Texas.
  • 250 MW from Infinity Wind Resources/Roosevelt Wind Ranch in Roosevelt County, N.M., between the towns of Dora and Elida.

The price per megawatt-hour of energy generated at these wind facilities will be less than the per-megawatt-hour price of most of the company’s natural gas-fueled generation, said Riley Hill, president and CEO of SPS. Over the 20-year terms of these agreements, Xcel Energy expects to save $590.4m in fuel costs, Hill said.

“We started shopping for more wind energy in March after seeing some very good prices on the market,” Hill said. “We are making these acquisitions purely on economics and the savings we can deliver to our customers.”

Hill said the favorable pricing is partly the result of a federal production tax credit that Congress extended for one year, applicable to facilities that begin construction before the end of 2013.

Xcel currently has close to 1,500 MW of wind energy capacity connected to its Texas-New Mexico transmission and distribution network, which spans the Panhandle and South Plains regions of Texas, six eastern and southeastern counties in New Mexico and portions of Oklahoma and Kansas. Xcel purchases more than 600 of those megawatts through long-term contracts.

The three additional contracts will more than double the company’s contract wind resources, and will push the total Texas-New Mexico wind capacity beyond 2,200 MW. The company solicited additional wind resources through a request for proposals process that opened in March. This process generated more than 75 proposals that included the winning bidders. The deals are for energy only, and do not include the purchase of renewable energy certificates (RECs).

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.