Minneapolis (April 6, 2020) —(BUSINESS WIRE)– Xcel Energy announced today it will sell the Mankato Energy Center, a natural gas-fired power plant, to Denver-based Southwest Generation for $680 million, and plans to use the net gain on the sale to fund its corporate giving efforts, including support related to COVID-19 recovery. The 760-megawatt plant will continue to provide electricity to the company’s Upper Midwest customers.
“This is an unprecedented time, and we want to do our part to support our communities as we face the challenges brought on by the COVID-19 pandemic,” said Ben Fowke, chairman and CEO, Xcel Energy. “The Mankato Energy Center and its workforce provides essential services for local and regional economies and that will not change. And now more than ever, the people we serve need safe, reliable, affordable power.”
“Southwest Generation is excited to add the Mankato Energy Center to our growing portfolio. The plant is a key part of the transition to a lower carbon grid and we’re pleased to expand our relationship with Xcel Energy, which is leading that transition in the United States,” said John Foster, CEO, Southwest Generation.
Xcel Energy purchased the plant in early 2020 through a non-regulated affiliate company. Earlier this year, Southwest Generation offered to purchase the facility to add to its growing fleet of natural gas plants. While the plant will still provide value for customers, selling the facility will continue Xcel Energy’s focus as a fully regulated utility company. The proceeds from the sale will primarily be used to reduce Xcel Energy’s overall financing needs and improve the company’s credit metrics, with the net gain from the sale to fund its corporate giving and COVID-19 relief efforts. The sale is expected to close in the third quarter of 2020 and is not expected to have a material impact on short or long-term earnings. Current employees are expected to continue working at the plant and Xcel Energy will continue buying power from the facility.
Details associated with the relief efforts are still being worked out, but Xcel Energy will use the proceeds from the gain on the sale to support corporate giving and additional support for recovery efforts associated with COVID-19.
Southwest Generation (www.southwestgen.com) is a Denver-based independent power producer that owns and operates approximately 1.7 gigawatts of generation capacity across the western United States. It currently sells Xcel Energy electricity from the Arapahoe and Fountain Valley plants, both located in Colorado. Southwest Generation is owned by institutional investors advised by JP Morgan Asset Management.
Xcel Energy has provided electric service to customers for more than a century. As part of its clean energy transition, the company will continue to implement its plan to reduce carbon emissions 80% by 2030 and pursue a vision of providing 100% carbon-free electricity by 2050.
Source: Xcel Energy