New large wind energy facilities that will 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 1,230 megawatts of additional wind energy to the regional generating mix. This plan includes production and savings guarantees to Xcel Energy customers and was supported by various consumer groups, state agencies and environmental organizations. 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.
“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,” said David Hudson, president, Xcel Energy – New Mexico, Texas.
“The new wind farms will help power a growing regional economy with clean energy while providing the lowest-cost generating resource on our system. Not only will these wind farms save customers money, but they’ll also preserve precious water resources and spur regional economic activity,” Hudson added.
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. Along with these two new facilities, the company has gained approval to purchase additional wind energy through long-term contract from facilities in Texas. 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. Additionally, the two facilities Xcel Energy will build qualify for 100 percent of the federal production tax credit, the benefits of which will be entirely passed on to regional customers.
Customers will begin to see the benefits of reduced fuel costs, which represent about one third of a residential customer’s bill, as soon as the projects begin commercial operation. Xcel Energy anticipates average monthly fuel savings 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-megawatt Hale Wind Project near Plainview, Texas. Construction is expected to start in June. Construction on the 522-megawatt Sagamore Wind Project near Portales, N.M., will start in 2019. Together, the new Xcel Energy-owned 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 contract with NextEra Energy Resources to purchase 230 megawatts of wind energy through a long-term contract. Known as the Bonita PPA (power purchase agreement), this contract wind energy will be generated at facilities in Cochran and Crosby counties in Texas.