Xcel to add 1.2 GW of wind to Texas, New Mexico mix, as PUC gives formal OK

Dive Brief:

The Texas Public Utilities Commission voted on Friday to approve two wind farm projects from Xcel Energy's Southwestern Public Service — a 478 MW project in Hale County, Texas and a 522 MW wind project in Roosevelt County, New Mexico. New Mexico regulators had approved the proposal in March.
The Commission also approved the power purchase agreement between the utility and NextEra's Bonita Wind Energy, as part of Xcel's acquisition of the Hale project. SPS will purchase an additional 230 MW of wind generation from two Texas-based wind farms.
Combined, the two projects will require 500 turbines from Vestas-American Wind Technology. Xcel has close to 1.6 GW of wind energy available in its Texas-New Mexico generation mix and its proposal will nearly double that, adding 1.2 GW.

Dive Insight:

The expansion had a false start in April, when the Commission gave a voice-vote approval for the $1.6 billion deal, but delayed a final order to allow the parties to file written responses regarding cost recovery and other concerns expressed by the regulators. Xcel's subsidiary appeared before the Commission regarding their proposal four times, according to RTO Insider. Now construction can begin on the two wind farms.

SPS told the commission that the power purchase agreement and the two wind projects will lead to net savings for customers.

Announced in March 2017, the major wind energy expansion contributes to Xcel's growing renewable energy footprint. The project is part of Xcel's Steel-for-Fuel strategy, as defined by Xcel CEO Benjamin Fowke during the company's Q1 earnings call in April.

"Because of the strong wind resources in our service territories, we have the unique opportunity to invest in renewable generation in which the capital cost could be more than offset by fuel savings," Fowke said during the call.

Xcel is also pursuing regulatory approval for wind energy projects in Colorado and Minnesota. If the Minnesota Commission approves the company's proposal, Xcel could become an industry leader in wind energy, with more than 10 GW of wind capacity.

The application did not include transmission facilities. During the Q1 earnings call, Fowke said the company has "permitting and transmission interconnection studies to complete, but we are pleased where we are with our regulatory process."