Four New Wind Farms In The Upper Midwest Could Power 750,000 Homes

Source: Mari Hernandez is a Research Associate on the Energy team at the Center for American Progress, Climate Progress • Posted: Monday, August 26, 2013

Last week, Minneapolis-based utility Xcel Energy proposed its fourth wind farm in the Upper Midwest since mid-July. If approved, the 150-megawatt Border Winds Project would be developed in North Dakota near the U.S.-Canadian border and produce enough electricity to save customers an estimated $45 million over its lifetime while reducing annual carbon dioxide emissions by about 320,000 tons.

In July, Xcel Energy — the nation’s top utility for wind-based power — proposed to add 600 megawatts of wind energy through three wind farms in North Dakota and Minnesota. With the addition of the Border Winds Project, Xcel could save customers more than $220 million and add a total of 750 megawatts of wind power to its existing Midwest portfolio, which would bring its wind capacity total in the region to 2,550 megawatts — or enough power to serve over 750,000 homes.

“These projects will lower our customers’ bills, offer protection from rising fuel costs, and provide significant environmental benefits,” Dave Sparby, CEO of Xcel subsidiary Northern States Power Co., said in a statement last month. “Wind prices are extremely competitive right now, offering lower costs than other possible resources, like natural gas plants.”

Xcel has submitted the four projects to the Minnesota Public Utilities Commission and the North Dakota Public Service Commission for consideration and expects to hear the regulators’ decisions by late fall. If approved, construction will begin immediately in order for the projects to qualify for the federal renewable energy Production Tax Credit (PTC).

The PTC, which was set to expire at the end of 2012, was extended in January to projects that begin construction by the end of 2013. The tax credit provides 2.2 cents per kilowatt-hour for electricity produced over the first ten years of operation.

The Upper Midwest is not the only region that’s benefiting from Xcel’s aggressive push to add more wind power before the PTC expires. In Colorado, Xcel has asked regulators to approve a 200-megawatt wind farm that would save customers more than $142 million in fuel costs over the 20-year contract term.

Xcel also proposed three projects totaling nearly 700 megawatts that would be built in New Mexico, Oklahoma and Texas, citing a lower price per megawatt-hour for wind energy generation than their own natural gas-fueled generation. These projects are expected to save customers $590.4 million in fuel costs over 20 years.

Altogether, Xcel is awaiting approval on about 1,650 megawatts of wind power that could come online before the end of the 2016, which would increase its overall wind capacity by 30 percent.

“We are committed to meeting our customers’ needs in clean and affordable ways,” said Ben Fowke, Xcel Energy’s chairman and CEO. “Wind power is simply the cheapest resource available right now, and we are taking the opportunity afforded by the PTC extension to further shape our systems for the future.”

Mari Hernandez is a Research Associate on the Energy team at the Center for American Progress.