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Xcel wants to make wind deal without Boulder
Credit: Article by: WENDY LEE , Star Tribune, www.startribune.com 18 August 2011 ~~
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Translate: FROM English | TO English
A month ago, Xcel Energy Inc.’s plans to acquire 200 megawatts of wind power to supply Boulder, Colo., as part of a new franchise agreement fell apart when the city and the Minneapolis utility couldn’t agree to terms.
Now Xcel says it wants to buy the wind power anyway.
“We realized that this was just too good a deal to pass up,” said Paula Connelly, Xcel’s managing attorney. “We were concerned that if we didn’t acquire it now, that in the future we might not be able to get wind at this price.”
The wind power would go toward Xcel’s Windsource program, where customers opt to pay more to get more renewable energy. Customers in Colorado, New Mexico, Minnesota and Wisconsin have used the program.
Xcel filed a request with the Colorado Public Utilities Commission on Thursday, outlining plans to buy wind power from Florida-based NextEra Energy Resources. The power was originally intended for Boulder, but negotiations on a 20-year franchise agreement between the city and Xcel fell apart last month.
Xcel said it’s eager to purchase the 200 megawatts because it believes it’s a bargain. The contract is about 40 percent cheaper than wind power Xcel contracted in 2009, Connelly said.
Xcel asked for approval from the Colorado Public Utilities Commission by Nov. 30. If Xcel receives the green light, NextEra will begin construction next year on wind turbines near Limon, Colo. The additional energy will bring Xcel’s wind power in Colorado to more than 2,100 megawatts on its system.
The proposed contract is dependent on NextEra receiving federal production tax credits, which requires turbines to be in production before the end of 2012. It’s possible the tax credit could be extended by Congress, but Xcel said in its filing it believes that’s unlikely.
Travis Miller, associate director for Morningstar’s utilities sector, said he wasn’t surprised that Xcel was acquiring more wind power.
“Xcel has been a leader and one of the largest wind suppliers in the country,” Miller said. “We think it has a good view of the renewable energy market and a large customer base that values renewable energy.”
Xcel said it will make another filing with the utilities board within 45 days to propose additional Windsource product offerings. Connelly said Xcel is exploring the possibility of giving longer-term Windsource contracts. In Colorado, nearly 12 percent of Xcel’s energy supply mix is made up of renewable energy.
“We believe in Colorado there will be a large demand for this wind energy,” Connelly said.
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