8-KMaterial Agreements

XCEL ENERGY INC 8-K Report, Material Agreement (Jan 28, 2005)

Filed January 28, 2005For Securities:XELXELLL

Summary

Xcel Energy Inc. (XEL) filed an 8-K on January 28, 2005, reporting the January 21, 2005, written order from the Colorado Public Utilities Commission (CPUC) approving a comprehensive settlement agreement for its least-cost resource plan. This agreement, reached with environmental and community stakeholders, allows Public Service Company of Colorado (PSCo), Xcel Energy's operating company, to proceed with plans to meet a significant future energy demand of approximately 3,600 megawatts by 2013. The approved plan involves a multi-faceted approach, including competitive bidding for various energy resources (fossil, renewable, and conservation), and the construction of a new 750-megawatt coal-fired generating unit at the Comanche Generating Station. Importantly, this new unit and existing units at Comanche will feature state-of-the-art emissions reduction technology, leading to an overall decline in SO2 and NOx emissions despite increased capacity. The settlement is projected to provide substantial savings to customers, estimated between $500 million and $1.4 billion.

Key Highlights

  • 1CPUC approval of Xcel Energy's (via PSCo) comprehensive least-cost resource plan, effective January 21, 2005.
  • 2Plan to meet approximately 3,600 megawatts of new generating capacity need by 2013.
  • 3Construction of a new 750-megawatt coal-fired generating unit at the Comanche Generating Station.
  • 4Installation of state-of-the-art emissions reduction equipment on all Comanche units, including the new one, leading to decreased SO2 and NOx emissions.
  • 5Estimated customer savings ranging from $500 million to $1.4 billion due to the settlement agreement.
  • 6Significant expansion of energy conservation programs with up to $196 million investment.
  • 7Consideration of carbon emissions regulation in resource planning, including an assumed $9 per ton CO2 cost.

Frequently Asked Questions

This 8-K filing announces the formal approval by the Colorado Public Utilities Commission (CPUC) of Xcel Energy's least-cost resource plan. This approval is critical as it allows Xcel Energy's operating company, Public Service Company of Colorado (PSCo), to move forward with significant infrastructure and resource acquisition plans to meet future energy demands.

The plan includes building a new 750-megawatt coal-fired unit at the Comanche Generating Station, acquiring additional energy supply and demand-side resources through competitive bids (including natural gas, renewables, and efficiency), and implementing enhanced energy conservation programs. The new coal unit will be equipped with advanced emissions reduction technology.

No, despite increasing the capacity at the Comanche Generating Station, the plan requires the installation of state-of-the-art emissions reduction technology on all generating units, including the new one. This is expected to result in a decline in sulfur dioxide (SO2) and nitrogen oxide (NOX) emissions from the enlarged station.

The settlement agreement is estimated to provide substantial cost savings to customers, projected between $500 million and $1.4 billion, when compared to other resource options that were considered. Additionally, PSCo will significantly expand its energy conservation programs, which can also lead to savings for consumers.