Xcel Energy (NASDAQ: XEL) announced today it has agreed to purchase the Mankato Energy Center, a 760-megawatt natural gas power plant from Southern Power, a subsidiary of Atlanta-based Southern Company. The plant currently provides power to Xcel Energy customers under a power purchase contract.
Securing the Mankato gas plant is a great value for our customers as it will provide significant cost savings and operating flexibility for the long term, said Chris Clark, president, Xcel EnergyMinnesota, South Dakota, North Dakota. As we continue to transition to cleaner energy sources and reduce reliance on coal, this plant will help us continue to deliver reliable electricity while keeping bills low.
Xcel Energy is planning for several power plant retirements and contract expirations in the mid-2020s. Acquiring this plant now provides certainty that energy from these newer generating units will be available and benefit customers over the life of the plant compared to simply purchasing the output. These benefits include more flexibility as we continue to add renewable energy and analyze the future of our always-on power plants, as well as reducing the risk from expiring power purchase agreements in the next decade.
Investing in regional energy benefits customers and communities Xcel Energy currently has nearly 100 employees in the Mankato area with several facilities, including a power plant and a service center. The company is also building a new transmission line in the area to deliver low-cost energy to customers throughout the region.
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Xcel Energy has a long history of serving customers in the Mankato area. Securing this plant gives us the opportunity to deepen our ties to the community, said Clark.
Xcel Energy has purchased power from the plants first unit since 2006 and has an agreement for the energy from the under-construction second unit beginning in 2019. Xcel Energy agreed to purchase the plant for $650 million. Current employees will be offered jobs with Xcel Energy.
About Mankato Energy Center The Mankato Energy Center is a natural gas combined-cycle plant. The second unit, now under construction, will bring total capacity to 760 megawatts of electricity. About 27 employees currently operate and maintain the plant. The facility was originally built by Calpine Corporation and sold to Southern Power in 2016.
Xcel Energys purchase is dependent on regulatory approval, expected in mid-2019.
About Xcel Energy Xcel Energy (NASDAQ: XEL) provides the energy that powers millions of homes and businesses across eight Western and Midwestern states. Headquartered in Minneapolis, the company is an industry leader in responsibly reducing carbon emissions and producing and delivering clean energy solutions from a variety of renewable sources at competitive prices. For more information, visit xcelenergy.com or follow us on Twitter and Facebook.
Certain information in this press release is forward-looking information that involves risks, uncertainties and assumptions. Forward-looking information includes, among other information, the expected impact of NSP-Minnesotas asset acquisition and other statements identified by words believe, could, estimate, expect, intend, may, plan, project, potential, should, will, would and similar expressions. Actual results may vary materially. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. Although Xcel Energy believes that its expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Factors, in addition to those discussed in Xcel Energys and NSP-Minnesotas Annual Report on Form 10-K for the year ended Dec. 31, 2017, and subsequent securities filings, that could cause actual results to differ materially.
Xcel Energy Media Relations, 612-215-5300