New Xcel Energy wind facilities offer $2.8 billion in customer savings over 30 years
AMARILLO, Texas (March 21, 2017) – Xcel Energy projects it can save Texas-New Mexico customers $2.8 billion over a 30-year period by displacing higher-cost energy with an additional 1,230 megawatts of wind energy – enough electricity to power more than 440,000 typical homes.
Most of the new megawatts of wind energy would be generated at two facilities constructed and owned by the company at sites located in eastern New Mexico and in the Texas South Plains region. Another new wind energy development will sell energy to the company through a long-term contract.
The proposal, filed today with the New Mexico Public Regulation Commission and the Public Utility Commission of Texas, represents Xcel Energy’s commitment to customers to deliver affordable and reliable energy with a dedication to a diverse energy portfolio, the foundation of the strategy Xcel Energy refers to as “Our Energy Future for the Southwest.”
David Hudson, president of Xcel Energy – New Mexico, Texas, said Xcel Energy is the nation’s leader in procuring and delivering cost-effective renewable wind resources for its customers’ benefit, and the Texas-New Mexico wind initiative is part of an overall corporate strategy to secure customer savings by investing in infrastructure projects that lower the cost of energy production that is so often affected by volatility in the natural gas markets. Natural gas is used to generate close to 40 percent of the energy delivered to Xcel Energy customers in Texas and New Mexico.
“The decision to add additional wind generation is purely in the economic interest of our customers,” Hudson said. “These new wind facilities will cost $1.6 billion to build, but will allow us to produce wind energy at a cost lower than energy produced at our coal and natural gas-fueled plants. These lower energy costs, in addition to savings from tax credits, add up to more than $2.8 billion in nominal customer savings over 30 years. These investments will also create significant tax base in communities where the facilities are located, as well as create jobs and long-term economic growth.”
The fuel for the wind generators – the wind itself – is free of charge, and wind generating technology has come down in cost dramatically. By acting now, Xcel Energy can lock in cost and tax benefits to develop what will be the region’s least expensive generating resource.
The electricity at the new company-owned wind farms will be generated by wind turbines manufactured by Vestas-American Wind Technology Inc., a world leader in wind turbine technology and manufacturing. Xcel Energy entered into an agreement with Vestas to purchase the turbines in 2016, which qualifies company-owned developments for 100 percent of an available federal production tax credit. At the time the new wind facilities will come on line, the credit will be valued at around 2.5 cents per kilowatt-hour.
The wind sites the company plans to acquire are currently under development by two different developers.
In Roosevelt County, New Mexico, approximately 20 miles south of Portales, Xcel Energy has entered into an agreement to purchase the Sagamore Wind Project from Invenergy, LLC. This facility will be capable of generating 522 megawatts, enough to power about 194,000 homes. The Sagamore project is expected to be in service by the end of 2020. Total project cost is $865 million.
In Hale County, Texas, just north of Lubbock and south of Plainview, Xcel Energy has entered into an agreement to purchase the Hale Wind Project from a subsidiary of NextEra Energy Resources, LLC. This facility is expected to generate up to 478 megawatts, enough to power about 168,000 homes. The Hale Wind Project is expected to be in service by the end of 2019. Total project cost is $769 million.