Xcel Energy (NYSE:XEL) has completed contract negotiations with two renewable energy developers to add 129 megawatts of wind power to the company’s Colorado electric generating mix by the end of the year.
The contracts were awarded to Prairie Wind Energy, for a 69-megawatt wind facility near Lamar, Colo., and Invenergy, for a 60-megawatt wind facility near Peetz, Colo., in Logan County.
“The development of these two wind facilities will increase our Colorado wind generation by more than 50 percent and further our plan of aggressively pursuing the development of wind power in Colorado,” said David Eves, Xcel Energy vice president of resource planning and acquisition.
The addition of new wind power is part of Xcel Energy’s Least-Cost Resource Plan (LCP) for Colorado, through which the company is seeking to acquire a variety of new electrical generation sources to meet increasing customer demand.
Last fall, the Colorado Public Utilities Commission granted Xcel’s request to issue a “request for proposals” (RFP) to pursue the acquisition of up to 500 megawatts of cost-effective wind power by 2006, as part of the LCP process. The RFP was issued in large part to allow the company to take advantage of the federal Production Tax Credit (PTC) on new wind generation for its Colorado customers. The PTC expires December 31, 2005.
Earlier this year, Xcel Energy entered into contract negotiations with three wind facilities with the goal of having approximately 400 megawatts of additional wind power. One of these selected projects, however, was downsized due to transmission constraints and another withdrew from negotiations.
Eves added that the RFP issued last fall sought wind power that could begin operation in either 2005 or 2006, and that the company could still acquire more wind generation to begin operation in 2006 if the U.S. Congress extends the PTC through at least 2006.
With the addition of these two wind generation projects, Xcel Energy will have 351 megawatts of wind energy production in Colorado serving its customers, which represents more than 4.5 percent of the company’s generating capacity.
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