Hoping to give wind-energy developers the time they need to access federal tax credits, Xcel Energy Inc. on Tuesday asked Colorado regulators for permission to speed up its request for bids for wind-backed electricity projects.
If the PUC approves Xcel’s request, the utility could issue an RFP for wind energy on March 1, and seek approval from the Colorado Public Utilities Commission by October 2013.
The tax credit, worth about $22 per megawatt of wind power for the first 10 years of a wind farm’s operation, expired on Dec. 31, 2013, but was extended on Jan. 1 by Congress as part of its “fiscal cliff” package.
To qualify for the federal tax credit, wind farms must be under construction by the end of 2013, and be operational by the end of 2014.
Minneapolis-based Xcel (NYSE: XEL), the state’s largest provider of electricity with more than 1 million customers, had planned to issue a request for bids to provide electricity — from traditional as well as renewable resources – by April.
But utility executives believed that time frame would have cut it too close for wind farm developers to get their projects underway, according to an announcement from Xcel.
“We have a great opportunity to see if additional wind resources in Colorado would be of economic benefit to our customers with the extension of the federal tax credit, but we must act quickly,” said Ben Fowke, president, chairman and CEO of Xcel, in a statement. “Our request is not being driven by state renewable energy standards, but by the opportunity to reduce costs.”
Xcel didn’t pledge to accept any wind-farm bid it received.
Fowke, in the announcement, said that any acquisition of additional wind power in Colorado “must be competitively priced and remain within the framework of the overall resource acquisition process. For that reason, the company is not suggesting an amount at this time for the number of megawatts of wind it would acquire.”
Colorado ranked 10th in new wind generation that was put online in 2012, according to the American Wind Energy Association (AWEA), based in Washington, D.C.
Last year the state added new wind farms that year capable of generating a total of 496 megawatts, according to AWEA. In Colorado Xcel’s contracted wind farms, when operating at full capacity, can supply 2,177 megawatts of electricity.