Thursday, March 17, 2005

Xcel to Add 129 MW in Colorado

Xcel unveils two wind energy projects
Two wind power developers will add 129 megawatts of wind energy to the Xcel Energy Inc.'s Colorado power portfolio by the end of the year, the company said Wednesday.

The two developers, Prairie Wind Energy LLC, formed by local landowners in Prowers County in southeastern Colorado, and Chicago-based Invenergy LLC, are the two survivors of a competitive bidding process that at one point included 12 companies offering 17 projects amounting to 2,000 megawatts of wind power.

Prairie Wind will build a 69-megawatt wind facility near Lamar, and Invenergy will build a 60-megawatt wind facility near Peetz in Logan County. Wind farms already exist in those areas. One megawatt of power generally serves about 1,000 people, although wind energy is intermittent because the wind doesn't blow all the time.

Two other projects were under consideration by Xcel. One of these selected projects, however, was downsized due to transmission constraints and another withdrew from negotiations, according to the company.

"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. We believe wind energy will continue to be an increasingly important generation resource for our customers," said David Eves, Xcel Energy vice president of resource planning and acquisition, in a statement.

The two survivors were able to get their projects online by the end of the year, when a federal tax credit that lowers the cost of wind power expires.

If Congress extends the tax credit beyond Dec. 31, 2005, other companies could get contracts, said Mark Stutz, a spokesman for Xcel.

Xcel (NYSE: XEL) is based in Minneapolis. It supplies electricity and natural gas to 1.2 million Coloradans.

"We were aware that it was a short time frame and given developments in the wind energy industry we knew we may not get [the Request for Proposals] fully subscribed. There are still additional avenues to add more wind power later," Stutz said.

Xcel received approval from state regulators last year to fast-track its Request for Proposals for up to 500 megawatts of power. Last month the company issued an RFP for up to 2,500 megawatts of power. Bids are due May 17.

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.

© 2005 American City Business Journals Inc.