Xcel Energy Inc. (XEL - Free Report) announced that it will collaborate with RES America Developments Inc., a business wing of Renewable Energy Systems Americas Inc., (RES Americas) to develop a 200 megawatt ("MW") wind park near Austin, Minn.
The Pleasant Valley Wind initiative is a part of Xcel Energy’s proposed 600 MW wind power goal in its Upper Midwest service territory. The project is located close to the company’s Grand Meadow wind program.
RES Americas will construct and develop the project, which once completed will be handed over to Xcel Energy. The construction work is projected to be completed by late 2015, while developmental undertakings are expected to run through 2014.
Following the request for proposals, in Feb 2013, the company applied for regulatory approval for Pleasant Valley besides two other projects to the Minnesota Public Utilities Commission and the North Dakota Public Service Commission.
Xcel Energy has been bolstering its renewable asset basket to reap the benefits of the production tax credits. With these initiatives, the company will be able to deliver wind electricity at reasonable rates to its customers. Consumer bills will see an estimated reduction of $180 million.
Moreover, the programs will generate power that will adequately serve around 180,000 residential homes. These endeavors will also lead to fuel cost savings for Xcel Energy. In addition, the multiple wind projects are expected to curb carbon emissions by 1.2 million tons annually in the Upper Midwest region.
Lately, Xcel Energy has been offering bids in several states like New Mexico, Colorado and Texas to expand its wind portfolio. It recently sought sanction from the New Mexico regulators to procure 700 MW of wind capacity via three power-purchase agreements from NextEra Energy Inc. (NEE - Free Report) . These wind power bids will help Xcel well to achieve its carbon emissions minimization target of 30% by 2020 from 2005 levels.
Another key factor expected to drive the renewable zeal is the Obama Climate plan which called for increasing reliance on renewables and natural gas based energy source in the future. We believe this plan will encourage Xcel Energy to up more renewable projects.
Xcel Energy carries a Zacks Rank #3 (Hold). Other utilities looking good at the moment are Zacks Ranked #2 (Buy) DTE Energy Company (DTE - Free Report) and Calpine Corp. (CPN - Free Report) .