North Dakota PSC reviews prudency of Xcel deal to take power from Calpine’s Mankato plant

The North Dakota Public Service Commission plans a June 3 hearing on an application from the Northern States Power unit of Xcel Energy (NYSE: XEL) for an Advance Determination of Prudence for 345 MW of capacity and associated energy to be added to the NSP System through a 20-year power purchase agreement with Mankato Energy Center LLC, an affiliate of Calpine Corp. (NYSE: CPN).

NSP on Feb. 13 filed the application with the commission, and on May 12 filed a redacted version of the power purchase agreement (PPA).

This capacity and associated energy will be acquired from a new combined-cycle, natural-gas unit added to Calpine’s existing 375-MW Mankato Energy Center located in Mankato, Minnesota, from which NSP purchases capacity and associated energy through an existing 20-year PPA. This proposed resource addition to the NSP System will help meet a potential need of 150-500 MW on the system in the 2017-2019 time period. To meet the need, Xcel is proposing to add three new resources:

  • the Calpine Project PPA, which is the subject of this application;
  • Black Dog Unit 6, a 215 MW (nameplate) combustion turbine for which Xcel has already received an advanced prudence approval from the North Dakota commission. Xcel’s Black Dog plant in Minnesota is the site of two recently-retired coal units; and
  • the up-to-100 MW (nameplate) of distributed solar generation through a PPA with an affiliate of Geronimo Energy.

The Mankato Energy Center is located in Mankato, Minnesota. Calpine’s 345-MW combined cycle unit will add approximately 278 MW of accredited capacity to the existing 375-MW (nameplate) Mankato Energy Center. The new CC unit will be located on the same site and incorporated into the existing footprint of Mankato Energy Center’s existing CC unit. Xcel anticipates that the new CC will achieve commercial operation in 2018 or 2019.

Calpine noted in its May 1 quarterly earnings report that on Feb. 5, the Minnesota Public Utilities Commission concluded a competitive resource acquisition proceeding and approved this 345-MW expansion of Mankato under the PPA with Xcel Energy. The PPA was executed in April and remains subject to approval by the North Dakota commission, Calpine said at the time. Commercial operation of the expanded capacity may commence as early as June 2018, subject to requisite regulatory approvals and applicable contract conditions.

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.