Xcel to up wind portfolio by a third

Wind turbines
Wind turbines, shown in this file photo, send electricity to Xcel Energy's battery storage unit near Beaver Creek. Three new wind energy projects in Minnesota and North Dakota would help Xcel Energy boost its Midwest wind portfolio by a third, the utility said Tuesday.
MPR Photo/Mark Steil

Three new wind energy projects in Minnesota and North Dakota would help Xcel Energy boost its Midwest wind portfolio by a third, the utility said Tuesday.

Xcel said it submitted paperwork to state regulators to add 600 megawatts of wind energy to its portfolio, which is enough electricity to power 180,000 homes, officials said. The utility's Midwest presence covers parts of Minnesota, the Dakotas, Wisconsin and Michigan.

Two of the new wind projects are in southern Minnesota: Odell Wind Farm near Windom and Pleasant Valley near Austin. The third, Courtenay Wind Farm, is located near Jamestown, N.D. Both the Courtenay and Odell projects are under a power purchase agreement with Geronimo Energy, and the Pleasant Valley farm is a project Xcel would own after it's developed.

All three projects were expected to be completed by 2016, assuming they get regulatory approval. The projects are also expected to qualify for a federal production tax credit.

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Xcel said the cost of wind has dropped in recent years, especially with the federal tax credit.

"When we evaluated the cost to our customers and compared the cost of wind power to the cost of producing electricity at one of our existing power plants, we got very favorable results," said Jim Alders, who directs Xcel's regulatory group. "We think we can save our customers money in the near future."

But Alders said the future of the tax credit is uncertain. Congress has extended it only through the end of 2013.

"Whether or not we'll experience prices like this from wind developers depends on what the future of federal tax policy might be," he said.

But the costs of other forms of electricity, especially nuclear power, have also been uncertain. Xcel has faced significant cost overruns for upgrades to its nuclear power plants.

The utility is proposing a nearly 8 percent increase in electricity rates, in part to cover upgrades to its nuclear plants. An administrative law judge earlier this month recommended a smaller rate increase. The Minnesota Public Utilities Commission is expected to rule in September on the proposed hike.