Xcel Energy Seeks Fast Track for Wind Power Bids

Xcel Energy Seeks Fast Track for Wind Power Bids

Oct 01 - Business Wire

In order to take full advantage of the recent Congressional extension of the federal Production Tax Credit (PTC) for wind generation, Xcel Energy yesterday filed a request with the Colorado Public Utilities Commission to further expedite a company bidding process for new wind power in the state.

On Aug. 11, 2004, the Colorado Public Utilities Commission gave Xcel Energy permission to issue a "Request of Proposal" for up to 500 megawatts of renewable energy -- expected to primarily be wind -- under the company's overall resource planning process. The bidding process for this wind power began the following week and was to continue through Nov. 23, 2004.

Congress last week extended the tax credits only through the end of December 2005. Only those wind power projects that are completed and producing electricity by this extension date will be eligible to receive the tax credits, which help make wind energy cost effective and a valuable resource for Xcel Energy customers. Without the price reductions made possible by these tax credits, wind energy is generally more expensive than other resource alternatives available to Xcel Energy.

"While we had hoped that the extension would have been for a longer period of time, we plan to aggressively move ahead with our bidding process. We have requested that the commission allow us to separately evaluate 2005 projects dependent upon the PTCs, and to accelerate the evaluation process. This will give developers and operators of future wind farms in Colorado every opportunity to take advantage of the PTCs," said Fred Stoffel, Xcel Energy vice president for policy development.

If approved, wind power bids dependent upon the PTCs would need to be submitted to Xcel Energy by Nov. 1, 2004. Xcel Energy would then evaluate the wind bids and announce successful projects in mid-March 2005, instead of in May 2005 as originally planned.

"Wind farm developers could conceivably have several extra months to build their facilities and achieve commercial operation," Stoffel said.

The renewable energy solicitation is part of the company's overall Least-Cost (Resource) Plan, which was filed in April 2004. The company also has proposed to construct a 750-megawatt coal unit near Pueblo, Colo., and to conduct an all-source competitive bidding process to acquire approximately 2,800 megawatts of other needed resources, including additional renewable, fossil-fuel generation and demand-side management. The CPUC will consider the rest of the plan beginning in November, with a decision expected by the end of 2004.

Xcel Energy is continuing its effort to triple the amount of cost-effective wind power in Colorado within the next several years, despite its opposition to a Colorado ballot initiative, Amendment 37, which calls for a statewide renewable energy standard. The company opposes the ballot initiative because it creates a mandate for renewable energy -- including some highly expensive solar power -- without what the company believes are adequate checks and balances on cost.

Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas company with regulated operations in 11 Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.3 million electricity customers and 1.8 million natural gas customers through its regulated operating companies. In terms of customers, it is the fourth-largest combination natural gas and electricity company in the nation. Company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com .

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