Dive Brief:
- Xcel Energy signed two power purchase agreements with NextEra Energy Resources for 140 MW of photovoltaic solar from New Mexico developments. The developments are expected to be online in time to qualify for the 30% federal investment tax credit, which expires at the end of 2016.
- The two contracts, subject New Mexico Public Regulation Commission approval, come at a price that is competitive with Xcel natural gas generation when New Mexico’s production tax credit is figured in, the Seminole Sentinel reports.
- According to David Hudson, president of Xcel subsidiary Southwestern Public Service Company (SPSC), the solar projects also offer the advantages of using no water for cooling and generating no greenhouse gas emissions.
Dive Insight:
SPSC serves customers along both sides of the Texas Panhandle-New Mexico border. It uses over 2,400 MWs of mostly Texas wind and now nearly 200 MWs of mostly New Mexico solar. The utility plans to cut its carbon 25% by 2020.
“We are making these purchases because they make good sense economically,” SPSC’s Hudson told the Seminole Sentinel. “Not only is solar energy dropping in price, it also displaces megawatts generated from some of our older, less-efficient natural gas-fueled plants. This saves on fuel costs and environmental compliance for years to come, and these savings are passed directly on to our customers.”
Xcel Energy the top U.S. wind energy provider, according to the American Wind Energy Association, and is among the top-ten utilities in solar, according to the Solar Electric Power Association.
NextEra Energy, Inc. subsidiary NextEra Energy Resources is in the wholesale and retail electricity markets, develops and builds renewables projects, and provides energy products and services to unregulated electricity market customers. It is North America’s biggest generator of wind and solar power and some 95% of the electricity it sells is from “clean or renewable sources.”
