Sagamore project making progress
Xcel Energy reaches settlement in N.M. wind case
Plan to lower generating costs through historic expansion of wind energy moves forward
ROSWELL, N.M. (Dec. 11, 2017) – Xcel Energy has reached a settlement with key stakeholders in New Mexico that moves its plan to boost regional wind energy production and lower electricity generation costs a step closer to realization.
In March, the company filed proposals with regulators in both New Mexico and Texas to add 1,230 megawatts of new wind energy generating capacity through two wind farms the company proposes to build – one in New Mexico and the other in Texas – plus a contract to purchase additional wind energy from two smaller Texas facilities that will be built and owned by another company. These new resources combined are expected to deliver significant savings in energy production costs over a 30-year period.
Several New Mexico groups, including the staff of the New Mexico Public Regulation Commission, sought certain assurances that the new wind farms would benefit customers. Xcel Energy offered changes to its original filing that provided additional assurances. Among the key changes that parties agreed to are:
- An investment cap of $1,675 per kilowatt, which is equal to 102.5 percent of the original filed construction cost estimates of the wind farms
- A minimum annual net capacity factor of 48 percent, meaning that Xcel Energy guarantees that the production from the wind turbines, which is dependent upon weather conditions, will not fall below 48 percent of the total capacity of the turbines to generate electricity
- A guarantee that customers will be credited 100 percent of the federal Production Tax Credit
In exchange, the parties agreed that Xcel Energy can use New Mexico ratemaking provisions to file a historical test year rate case and include projected capital additions five months beyond the end of the test year. The parties agreed that for the wind-related investment and costs, interim rates will be made effective 30 days after filing. Therefore, the company can closely match the start of cost recovery in New Mexico retail rates with the in-service date of the wind facilities in the summer of 2019 and fall of 2020.
This agreement has been filed at the New Mexico Public Regulation Commission in the form of an uncontested stipulation, which the commission will consider when making a final ruling on whether or not the wind facilities should be built. A public hearing on the case will be held Dec. 18 and 19 before the assigned hearing examiner, and the commission would make its decision by March 22, 2018.
– More –
Xcel Energy reaches settlement in N.M. wind case – p. 2 of 2 –
“We’re very pleased with our progress so far,” said David Hudson, president, Xcel Energy – New Mexico, Texas. “Xcel Energy and all the parties to this case are looking out for the best long-term interests of our New Mexico customers, and we know these projects will deliver lower cost electricity, protect the environment and boost local economic development.”
Pending final approval from both the New Mexico Public Regulation Commission and the Public Utility Commission of Texas, and no detrimental impacts from federal income tax law changes, Xcel Energy expects to start construction on the Hale project in Texas by the second quarter of 2018 and bring it on line in 2019.
Construction on the Sagamore project in New Mexico would start in 2019, and the facility would be operational by 2020. If built as planned, Sagamore will be the largest wind energy facility in New Mexico with 261 turbines and a total electrical capacity of 522 megawatts.
A settlement in principle has been reached with Texas customer groups, but some work remains with Texas stakeholders before a final agreement can be presented to the Public Utility Commission of Texas for consideration.
A map showing the locations of the proposed new wind farms can be found at www.xcelenergy.com/ourenergyfuturesw, along with a link to more details on the projects.
