Xcel adding 3 wind farms in Minn., ND
Tax credits and competitive pricing for wind turbines are prompting Xcel Energy to add 600 megawatts of wind power in the Upper Midwest -- amounting to a one-third increase in its regional wind power.
The federal tax credits for the wind projects require work to begin by the end of 2013, which factored into Xcel's decision to get started.
"These projects will lower our customers' bills, offer protection from rising fuel costs, and provide significant environmental benefits," said Dave Sparby, president and CEO of Northern States Power Co.-Minnesota, Xcel's regional subsidiary.
Minneapolis-based Xcel didn't disclose the cost of the three wind farms it plans to have developed by independent firms. The company currently has 1,800 megawatts of wind power in its system in the Upper Midwest.
The additional 600 megawatts would be enough to power about 180,000 homes, and lower customer costs by about $180 million over 25 years, said Laura McCarten, regional vice president for Northern States Power.
Xcel is under a mandate from the state of Minnesota to start generating more of its electricity from renewable sources.
That included a requirement to generate 18 percent of its electricity from renewable sources by 2012, which Xcel met, said Jim Alders, a regulatory strategist for Xcel. Future targets include getting 25 percent of its electricity from renewable sources by 2016, and 30 percent by 2020. That 2020 figure includes 25 percent that is expected to come from wind power.
Xcel hit the 2012 target of 18 percent by counting on wind power for 12 percent, and other renewable sources picked up the balance.
The addition of even more wind farms could depend on what happens with federal tax policy, Alders said. If Xcel can find cost-effective options that help customers, "we'll make adjustments over time," he said.
As Xcel looked into the costs of adding wind power capacity, "the pricing we got back from the wind industry was so attractive," the firm had an additional reason to move now, Alders said.
The three wind farms announced Tuesday will be built in Minnesota and North Dakota. The farms include one planned near Jamestown, N.D., another near Windom, Minn., and a third near Austin, Minn.
The Jamestown and Windom projects are being developed by Geronimo Energy. The Edina-based company works on both solar and wind power projects, and has three operating wind farms in Minnesota.
"These two projects will also bring strong economic benefits to the local residents and communities" where they're located, said Blake Nixon, president of Geronimo Wind Energy. The Jamestown wind farm, for example, will create an estimated 200 construction jobs, and result in 10 to 12 permanent jobs to operate and maintain the turbines.
Both the Jamestown and Windom wind farms will include up to 125 wind turbines. The North Dakota site will be constructed across 25,000 acres of leased land from more than 60 landowners, Geronimo said in a news release. The farm near Windom will also include up to 125 turbines spread across 34,000 acres leased from more than 175 landowners.
The wind farm near Austin will be developed by RES America Developments Inc., which will then transfer ownership to Xcel. That wind farm will be adjacent to another wind farm, which Xcel Energy currently owns.