Xcel Energy mentioned it is going to purchase a pure gas-fired energy plant in Minnesota from Southern Power, a subsidiary of Southern Co. The $650 million deal for the Mankato Energy Center places Xcel in command of a facility from which it has bought energy because the plant’s first unit got here on-line in 2006.
A second unit on the plant is anticipated to return on-line in 2019, bringing the ability’s whole energy era capability to 760 MW. That would make it the biggest gas-fired plant in Xcel’s fleet. The plant was constructed by Calpine Corp. and bought to Southern Power in 2016 in a $395.5 million deal.
“Securing the Mankato gasoline plant is a superb worth for our prospects as it is going to present important price financial savings and working flexibility for the long run,” mentioned Chris Clark, Xcel’s regional president, in a press release November 6. “As we proceed to transition to cleaner power sources and cut back reliance on coal, this plant will assist us proceed to ship dependable electrical energy whereas protecting payments low.”
Xcel mentioned the acquisition is a part of a plan to safe electrical energy because it appears at energy buy contracts that can expire over the following 10 years. The utility in a press release mentioned, “Acquiring this plant now gives certainty that power from these newer producing items will likely be out there and profit prospects over the lifetime of the plant in comparison with merely buying the output. These advantages embody extra flexibility as we proceed so as to add renewable power and analyze the way forward for our always-on energy crops, in addition to lowering the danger from expiring energy buy agreements within the subsequent decade.”
State regulators nonetheless have to approve the transaction, with a choice anticipated in mid-2019.
Xcel mentioned it has about 100 employees within the Mankato space, some at a service middle and a few on the Wilmarth Generating Station, a small 18-MW energy plant on the Minnesota River that burns refuse-derived gas, a burnable gas produced from municipal strong waste. Xcel is constructing a brand new transmission line within the space to improve its electrical energy distribution within the area.
The firm mentioned the 27 present workers on the Mankato Energy Center will likely be provided jobs with Xcel.
“Xcel Energy has a protracted historical past of serving prospects within the Mankato space. Securing this plant offers us the chance to deepen our ties to the neighborhood,” mentioned Clark.
Xcel in a securities submitting mentioned that when the second unit at Mankato comes on-line, the plant “is anticipated to function as a single high-efficiency pure gas-fired mixed cycle energy plant.”
Xcel additionally has plans to construct an $800 million, 786-MW gas-fired energy plant in Becker, Minnesota. That plant would exchange two coal-fired items at Xcel’s present 1,360-MW Becker plant, which is scheduled to shut by 2026.
The utility over the previous yr has introduced strikes to cut back its use of coal-fired era and improve its renewables portfolio, together with an bold “Colorado Energy Plan” representing a $2.5 billion funding.
—Darrell Proctor is a POWER affiliate editor (@DarrellProctor1, @POWERmagazine).
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