Xcel Energy (XEL) 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,” Chris Clark, president, Xcel Energy–Minnesota, South Dakota, North Dakota, said in a prepared statement. “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, the company said.