The Denver Post is reporting that the Colorado Public Utilities Commission (PUC) has approved a contract for Xcel Energy to buy 200 MW of wind energy in Limon, Colo.
According to the newspaper, the PUC voted 3-0 to approve the deal, with members saying the fixed wind-power costs would be a hedge against volatile natural-gas prices. The charge for the electricity from the Limon facility will start at $27.50/MWh. Since 2007, Xcel's average purchase cost for wind has been $42.16.
The proposed wind farm, which will be built in 2012, would have the lowest wind costs the utility has ever paid, Xcel officials said.
Over the 25-year contract, the price will increase about 2% a year. The price is so low because Juno Beach, Fla.-based NextEra already is building another 200 MW wind farm for Xcel on the site and can take advantage of economies of scale in building the second facility, company officials said.
In order to take advantage of expiring federal tax credits, Xcel had to sign the deal by Nov. 30, and NextEra must have the wind farm running by Dec. 30, 2012.