Xcel Energy's SPS seeks nod for 700-MW of wind PPAs
Jul 11, 2013 - Southwestern Public Service Co (SPS), a unit of US utility Xcel Energy (NYSE:XEL), intends to ink three power purchase agreements (PPAs) for 700-MW of wind power capacity and is looking for approval in New Mexico.
Two PPAs are for the 199-MW Mammoth Plains wind farm in Oklahoma and the 249-MW Palo Duro in Texas, both operated by NextEra Energy Resources. The third is for the 250-MW Roosevelt Wind Ranch in New Mexico of Infinity Wind Resources. All three potential deals are the result of a request for proposals that SPS launched in March for its Texas-New Mexico network. It got over 75 proposals. The PPAs are only for the energy and do not include the renewable energy certificates (RECs).
Xcel calculates that it would save USD 590.4 million (USD 450m) in fuel expenses for its Texas-New Mexico customers thanks to the 20-year PPAs. Riley Hill, president and chief executive of SPS, pointed out that wind power is now cheaper than its natural gas-fueled generation in terms of per-megawatt-hour price. One of the reasons behind “the favorable pricing” is the last-minute extension of the federal production tax credit, according to the company.
Excluding the newest power purchase deals Xcel has nearly 1,500 MW of contracted wind farm capacity at its Texas-New Mexico transmission and distribution network.