Xcel buys power plants for $739 million

Utility owner Xcel Energy Inc. has announced it is to buy two power plants from Calpine Corp. for $739 million.  The purchase includes the 621-megawatt Rocky Mountain Energy Center near Hudson, Colorado, and the 310-megawatt Blue Spruce Energy Center near Aurora, Colorado. The plantsÔÇÖ combined capacity can power about 700,000 homes. The Rocky Mountain and Blue Spruce plants, both fueled by natural gas, sell power to Minneapolis-based XcelÔÇÖs Public Service Co. of Colorado under electricity purchase agreements due to expire in 2013 and 2014. Rocky Mountain began commercial operation in 2004 and produces electricity using efficient combined-cycle technology. Blue Spruce began operation in 2003. Xcel provides a portfolio of energy-related products and services to 3.4 million electricity customers and 1.9 million natural gas customers service across eight Western and Midwestern states. The purchase will assist in XcelÔÇÖs ongoing requirement for generating resources. The company said that CalpineÔÇÖs plants were considered to be the ÔÇ£least cost optionÔÇØ among many for such resources. Commenting on the deal, David Eves, president and CEO of XcelÔÇÖs Public Service Company of Colorado, said: "This agreement will be good for our customers because these assets, which are already an integral part of our system, will continue to provide reliable and reasonably priced energy for many years. "Knowing that these plants will be part of our long-term generation mix will also help us to more effectively manage system reliability as we strive to meet the state's newly increased renewable energy standard." Thad Hill, Calpine's chief commercial officer, added: "We have been pleased to provide PSCo with clean, efficient and reliable energy solutions for Colorado ratepayers since 2003. We are confident that the 931 megawatts of capacity developed and operated by Calpine will continue to serve Colorado's energy needs for the foreseeable future.ÔÇØ The sale, which needs approval from the Federal Energy Regulatory Commission and the Colorado Public Service Commission, is expected to close in December this year. Houston-based Calpine is an independent power producer founded in 1984. It currently has capacity to deliver nearly 25,000 megawatts of power to customers and communities in 16 states across the US and Canada.