Xcel Energy Inc. is asking state regulators to add 550 megawatts worth of wind-generated power to its Colorado grid — boosting its amount of wind power by 25 percent.
If state regulators approve the request, Xcel (NYSE: XEL) will have more than 2,700 megawatts of wind power in Colorado, it said Thursday.
Xcel had asked the Colorado Public Utilities Commission in February for permission to request proposals for wind power projects because the utility said it needed to move quickly on wind projects in order for developers to get projects completed before the current federal wind Production Tax Credit expired.
The credit, worth about $22 for every megawatt of power generated, received a two-year extension in January. Developers have to have projects substantially underway by the end of 2013 and completed by the end of 2014 to qualify for the credit.
“Xcel Energy set out earlier this year to determine if we could add wind capacity in an economically beneficial way, and the results of this RFP [request for proposals] show that we can,” said David Eves, president and CEO of Public Service Co. of Colorado, Xcel’s local subsidiary.
“The price for this additional wind generation is as low as any wind power currently operating on our Colorado system,” he said.
The amount of wind Xcel requested, 550 megawatts, is enough to support the demands of about 137,500 homes, figuring that 1 megawatt worth of wind power can meet the demands of 250 homes.
“These projects meet our customers’ interest in a clean, reliable and diverse energy supply, and do so at prices that would make sense for our customers regardless of any environmental regulations,” Eves said.
State regulators must review and approve the projects that make up the 550 megawatts of wind power.
If the public utilities commissioners approve the bids Xcel has selected, the company plans to start negotiating power purchase agreements in June. The commission could give final approval of the contracts some time in October.
Xcel said it’s looking for wind projects in other parts of its eight-state service territory in addition to Colorado.
“Today’s announcement for Colorado shows that Xcel Energy can continue to advance a strong environmental agenda, without increasing costs for our customers,” said Ben Fowke, Xcel’s chairman, president and CEO.
“We are pleased to have reached this stage of the process and look forward to bringing additional clean, affordable energy to our customers.”
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