The Public Service Co. of Colorado unit of Xcel Energy (NYSE: XEL) applied May 13 at the Colorado Public Utilities Commission for permission to develop, own and operate as utility rate-based property a new 600-MW (nameplate) wind facility, which is made up of the Rush Creek I and Rush Creek II sites.
In addition, Public Service requests two Certificates of Public Convenience and Necessity (CPCN) for the Rush Creek I and II wind generation facilities, and also to construct and operate a 345-kV generation intertie (the “Rush Creek Gen-Tie”).
The Rush Creek Wind Project is located on the eastern plains of Colorado. It is primarily comprised of two generation sites (Rush Creek I and II) and the 345 kV Gen-Tie that will deliver the energy to Public Service’s system. The Rush Creek I site, hosting a project to be rated at 400 MW, is approximately 75,000 acres located in Elbert County, southeast of Limon, Colorado. The Rush Creek II site, rated at 200 MW, consists of approximately 41,000 acres in Lincoln, Kit Carson, and Cheyenne counties, east of Hugo, Colorado.
In total, the Rush Creek Wind Project will include 300 Vestas model V110 wind turbines, which are built in Colorado and have a nameplate capacity of 2 MW each.
The Rush Creek Project will interconnect to the grid at Public Service’s existing Missile Site Substation in Arapahoe County through the approximately 90-mile 345 kV Gen-Tie.
Said the utility: “By adding up to 600 MW of cost effective wind to our system, the Rush Creek Wind Project embodies the policy direction set forth by the General Assembly through Colorado’s Renewable Energy Statute (‘RES’), § 40-2-124, C.R.S., to add cost effective renewable resources. The Project will also move the Company closer to compliance with future federal environmental regulations for reducing carbon, while also supporting the State’s renewable energy goals. Finally, the Project will create incremental taxes and jobs, and support the Colorado economy through locally-sourced materials.”
The total cost of the project is estimated at $1.036 billion. Of that total, $915 million is the construction cost of Rush Creek I and II generation facilities and $121.4 million reflects the cost of the 345 kV Gen-Tie. On a total construction cost basis, the Project is $1,727 per kW, which includes the full cost of the 345 kV Gen-Tie. On a levelized cost of energy (LCOE) basis, the Project is less than 3 cents per kWh. If approved, the Rush Creek Wind Project would be the lowest cost wind on the company’s Colorado system.
Public Service needs quick approval due to PTC deadline
Alice K. Jackson, Regional Vice President, Rates and Regulatory Affairs of Xcel Energy Services Inc., said in supporting testimony that the project’s components include 400 MW of Vestas Wind Systems wind turbines in Elbert County (Rush Creek I), and 200 MW of Vestas wind turbines (Rush Creek II).
Public Service has requested expedited treatment of this application such that a decision of the commission is received on or before Nov. 10, 2016. This will allow the company to begin construction by the end of the year so that the 100% federal production tax credit (PTC) may be obtained. Rush Creek I and II are anticipated to be in service by Oct. 31, 2018.
Riley Hill, employed by Xcel Energy Services as Senior Vice President, Energy Supply, said the selection of the Rush Creek I and II sites allowed the utility to partner with Invenergy Wind Development North America LLC – a well-established Independent Power Producer (IPP). Hill wrote: “The opportunity to partner with Invenergy on the acquisition of the Rush Creek sites allowed us to combine the Company’s construction and operations expertise with the wind development expertise of Invenergy, which gave us great confidence in having a ‘construction-ready’ site of this scale within the timeframe necessary to take advantage of full PTC benefits for our customers.
Hill said that Invenergy originally acquired the rights to these sites for a reason. Based on its extensive wind development expertise, Invenergy saw the ability to harness a strong wind resource and develop a project at the Rush Creek I and II sites. “We picked the sites for the same reason, but we did not merely rely on Invenergy’s representations about the wind resource available at the sites,” Hlll added. “To further verify and confirm that the Rush Creek I and II site was a strong and viable option, our Public Service team performed extensive due diligence.”
There are several major contracts associated with the Rush Creek Wind Project.
- First, Public Service has entered into two similar Purchase and Sale Agreements for the acquisition of the construction-ready Rush Creek I and II sites.
- Second, Public Service has entered into a Turbine Supply Agreement with Vestas for 300 model 2.0 MW V110 Vestas wind turbines.
- Third, the company will enter into a fixed price Balance of Plant construction contract for the installation of the wind turbines and construction of the site infrastructure.
- Fourth, there is the Service, Maintenance, and Warranty Agreement, which is also with Vestas. The SMWA has a term of three years.