Minneapolis-based utility Xcel Energy Inc. has struck a deal to sell the Mankato Energy Center to Denver-based Southwest Generation for $680 million. The ink is barely dry on the previous deal for the energy plant: Xcel just acquired the Mankato Energy Center in January, paying $650 million to Atlanta-based Southern Power.
According to a Monday statement from the company, “Details associated with the relief efforts are still being worked out, but Xcel Energy will use the proceeds from the gain on the sale to support corporate giving and additional support for recovery efforts associated with Covid-19.”
Xcel first announced its intent to acquire the Mankato Energy Center, a natural gas-fired power plant, in late 2018 but ran into regulatory hurdles. In September 2019, the Minnesota Public Utilities Commission voted 5-0 to reject the deal, finding that it was not in the interests of Xcel’s ratepayers. The PUC ultimately approved a plan for Xcel to buy the power plant through an unregulated affiliate company. That meant that Xcel shareholders, and not its ratepayers, would bear the risk of the deal.
Xcel closed on its purchase of the Mankato Energy Center on Jan. 17, just 11 weeks before it announced plans to sell. The sale to Southwest Generation is expected to close in the third quarter.
Xcel was already buying power from the Mankato plant before it owned the facility through long-running purchase agreements. It will continue to buy power from Southwest Generation after the sale.
Xcel Energy, headquartered in downtown Minneapolis, is a Fortune 500 company. For 2019 the company reported revenue of $11.5 billion and net income of $1.4 billion.