Xcel Terminates Wind Farm Agreement with EnXco
Minneapolis-based Xcel Energy, Inc., has officially terminated an agreement with EnXco, Inc., to develop a 150-megawatt wind farm in North Dakota, but the company reinforced its commitment to secure a total of 200 megawatts of wind resources in the state.
The utility announced Thursday in its first quarter earnings report that it terminated its agreement with Escondido, California-based EnXco on April 1, and EnXco has since repaid a $101 million deposit that Xcel previously put down on the project.
According to Xcel, certain conditions were not met that were needed for the Merricourt Wind Project-a $400 million, 150-megawatt wind farm in southeastern North Dakota-to move forward. Specifically, Xcel cited ongoing, unresolved concerns about potential consequences that the wind farm could have on two endangered bird species.
Xcel and EnXco announced their partnership on the wind farm in October 2008. Under the agreement, EnXco would develop and construct the wind farm, and ownership would be transferred to Xcel subsidiary Northern States Power Company (NSP) upon completion, which was originally scheduled for the end of 2011.
According to figures from the American Wind Energy Association that were cited on Xcel's Web site, a 150-megawatt wind project creates about 150 construction jobs, 10 long-term operation and maintenance jobs, and 300 manufacturing jobs.
A Friday morning call to an EnXco representative was not immediately returned, but the Star Tribune reported that EnXco is “committed to the Merricourt project” and has agreed to develop a bird habitat plan and to obtain a permit to avoid penalties if an endangered species is accidentally killed.
Despite the termination of the agreement, Xcel reinforced its commitment to secure other wind projects in North Dakota.
In a letter to the North Dakota Public Service Commission, NSP President and CEO Judy Poferl said that Xcel will move forward with a request for proposals to secure 200 megawatts of wind resources to go in service in North Dakota by the end of 2012. She said that Xcel is already “in negotiations” for wind resources in the state but did not reveal further details about possible projects.
In April 2010, EnXco transferred ownership of the Nobles Wind Project to NSP. That wind farm, a 201-megawatt project in southwest Minnesota, became operational in late 2010. It can generate enough power to serve approximately 66,500 homes, according to Xcel.
The state requires Xcel to derive 30 percent of its sales from renewable energy by 2020. The state's Renewable Energy Standard requires that other electric utilities supply 12 percent of energy for Minnesota consumers from renewable sources by 2012, 20 percent by 2020, and 25 percent by 2025.
Xcel is the state's largest utility and the ninth-largest public company based on revenue, which totaled $10.3 billion in 2010.