*Historic expansion of wind energy to deliver long-term customer savings
AMARILLO — Xcel Energy and several key stakeholders in Texas have reached an agreement to boost regional wind energy production and lower long-term electricity generation costs.
In March 2017, the company filed proposals with regulators in both Texas and New Mexico to add 1,230 megawatts of new wind generation, including 1,000 megawatts from two large wind farms the company proposes to build and own in Texas and New Mexico. Combined with an additional 230-megawatt purchased power agreement, these new resources are expected to deliver significant energy savings over the next three decades, preserve environmental resources, and stimulate regional economic activity.
“We’re very pleased with the results of productive stakeholder negotiations,” 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 Texas customers, and we know these projects will deliver lower cost electricity, protect the environment, and stimulate local economic development.”
The stipulation filed today recommends the Public Utility Commission of Texas approve Xcel Energy’s proposal to build and own the Texas and New Mexico wind facilities and enter into the new long-term purchased power agreement. Under the agreement, Xcel Energy will:
Guarantee that customers will see a positive net benefit from the wind facilities for the first 10 years of operation
Cap base rate cost recovery at 102.5 percent of the estimated construction costs
Credit customers, through the fuel component of their monthly bill, 100 percent of the federal production tax credits related to actual wind generation from the wind facilities
Provide a minimum production guarantee of 48 percent for 25 years, including a credit to Texas retail customers’ fuel expense, should actual production output fall below a 48 percent net capacity factor
The parties also agreed to rate mechanisms that will provide Xcel Energy the ability to closely match the start of cost recovery in Texas retail rates with the in-service date of the wind facilities in the summer of 2019 and fall of 2020.