Public Service Company of Colorado (PSCo), a subsidiary of Xcel Energy Inc. (XEL), has agreed to buy two Colorado power plants of Calpine Corporation (CPN) for $739 million. The two power plants near Denver currently provide power to PSCo under power purchase agreements.
The plants to be purchased are the 621-megawatt Rocky Mountain Energy Center located near Hudson, Colorado and the 310-megawatt Blue Spruce Energy Center located in Aurora, Colorado. Collectively the 931 MW plants provide electrical power capable of meeting the needs of nearly 700,000 Colorado households.
The acquisition is proposed under Xcel Energy’s 2007 Colorado Resource Plan, through a competitive bid process made by Calpine. The agreement is dependent on regulatory agency approval.
Management believes that this agreement will benefit customers as these assets will continue to provide reliable and reasonably priced energy for many years. Furthermore, these plants, which will be a part of the company’s long-term generation mix, will also help the company effectively manage system reliability as it strives to meet the state’s newly increased renewable energy standard.
Minneapolis, Minnesota-based Xcel Energy is a major U.S. electricity and natural gas company that provides a comprehensive portfolio of energy-related products and services to 3.4 million electricity customers and 1.9 million natural gas customers through its regulated operating companies in eight Western and Midwestern states.
The company generates more than $9 billion of revenue annually. In 2009, Xcel Energy’s electric and gas operations accounted for 80% and 19% of revenue, respectively, while non-regulated operations contributed the balance 1%. With its robust pipeline of regulated investment opportunities and favorable regulatory treatment, Xcel remains on track to achieve its long-term EPS growth target of 5%-7%.
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