Effort aims to take advantage of one-year extension of federal tax credit.
In an effort to take advantage of the recent but limited extension of the federal Production Tax Credit (PTC) for new wind projects,
has asked the
Colorado Public Utilities Commission
(CPUC) to grant a waiver allowing the company to accelerate the procedural schedule for evaluating new wind generating resources.
At the start of this year, Congress passed the American Taxpayer Relief Act, which was later signed by President Obama. The new law included an extension of the PTC for wind developers, requiring that projects be at a certain level of construction by the end of 2013 (that level is yet to be determined at the federal level).
Xcel Energy had planned to issue its 2013 AllSource Solicitation by April 2013, but the bidding time frame, the independent evaluation process and the time needed by the CPUC to review and make a decision would not have allowed for the completion of this effort at the end of the year.
This would have made it very challenging for potential wind developers in Colorado to submit bids, negotiate, and sign contracts with Xcel Energy, and begin construction, to meet the requirements necessary to qualify for the PTCs.
“We have a great opportunity to see if additional wind resources in Colorado would be of economic benefit to our customers with the extension of the federal tax credit, but we must act quickly,” says Ben Fowke, president, chairman, and CEO of Xcel Energy. “Our request is not being driven by state renewable energy standards, but by the opportunity to reduce costs.”
The accelerated schedule if approved by the CPUC would call for Xcel Energy to solicit wind bids on or about March 1, 2013. The company would evaluate the bids and seek CPUC approval by October 2013. An independent evaluator would be involved throughout the accelerated evaluation process. By completing the process under this time frame, it is anticipated that developers would have adequate time to develop and begin construction of any new Colorado wind projects, in order to take advantage of the extension of the PTCs.
Fowke stressed that any acquisition of wind resources in Colorado must be competitively priced and remain within the framework of the overall resource acquisition process. For that reason, the company is not suggesting an amount at this time for the number of megawatts of wind it would acquire.
“The wind resources on our system have proven to be valuable for our customers in Colorado and have been a significant contributor to the very balanced portfolio of generating resources Xcel Energy has achieved, but future acquisitions must also prove to be right for our customers,” Fowke says.