New large wind energy facilities that are expected to return significant savings to Xcel Energy’s Texas and New Mexico customers over 30 years have gained verbal approval from Texas regulators.
In discussion today, the Public Utility Commission of Texas agreed to advance a plan to add 1.23 GW of additional wind energy to the regional generating mix. This plan, which includes production and savings guarantees to Xcel Energy customers, was supported by various consumer groups, state agencies and environmental organizations, according to the Minneapolis-headquartered utility.
New Mexico regulators approved the plan in March. The Texas commissioners directed staff to prepare an order consistent with their discussion today. The commission will approve the written order at a later meeting, says Xcel Energy.
“We’re grateful for the support of our community partners, who recognized the significant savings these new wind facilities will achieve. Their input was invaluable as they worked with us over the past year to fine-tune this plan,” comments David Hudson, president of Xcel Energy for New Mexico and Texas.
The plan calls for two new wind farms – one in Texas and the other in New Mexico – that will be built and owned by Xcel Energy. Because there are no fuel costs associated with wind generation, these facilities will save hundreds of millions of dollars in fuel costs over 30 years by offsetting higher-cost generation from the area’s conventional power plants, according to the utility. Additionally, the two facilities will qualify for 100% of the federal production tax credit, the benefits of which will be entirely passed on to regional customers.
Xcel Energy anticipates average monthly fuel savings for customers to be about $2 for a typical residential customer, beginning in 2021, after both wind facilities are operational.
The first wind farm to be built will be the 478 MW Hale Wind Project near Plainview, Texas. Construction is expected to start in June. Construction on the 522 MW Sagamore Wind Project near Portales, N.M., will start in 2019. Together, the new facilities will produce enough wind energy to power about 360,000 homes, create approximately 600 construction jobs and 40-50 full-time positions, and generate $154 million in additional revenue for state and local governments and school districts.
Wanzek Construction has been selected to build both the Hale and Sagamore wind facilities. The company is also building new Xcel Energy wind energy facilities in North Dakota, Iowa and Minnesota. Wanzek will use local subcontractors and suppliers for various construction aspects of the wind farms.
Xcel Energy has also gained approval to enter into a contract with NextEra Energy Resources to purchase 230 MW of wind energy through a long-term power purchase agreement. This wind energy will be generated at facilities in Cochran and Crosby counties in Texas.
