Summary
Xcel Energy Inc. (XEL), through its subsidiary Public Service Company of Colorado (PSCo), announced the Colorado Public Utility Commission (CPUC) has approved the acquisition of the Rocky Mountain Energy Center and Blue Spruce Energy Center natural gas generation assets for $739 million. These two facilities, with a combined capacity of 962 MW, were previously operating under power purchase agreements with PSCo and are expected to close in December 2010. The approval includes a cost recovery settlement, allowing PSCo to recover capital and operating expenses through an interim rider mechanism, with a slight annual revenue reduction until new retail base rates are implemented. The CPUC also mandates PSCo to file a rate case by April 30, 2012, to integrate these assets into its rate base, ensuring long-term cost recovery. This acquisition represents a significant step for PSCo in directly owning and managing critical generation assets.
Key Highlights
- 1Public Service Company of Colorado (PSCo), a subsidiary of Xcel Energy, has received CPUC approval to acquire two natural gas generation assets: Rocky Mountain Energy Center (652 MW) and Blue Spruce Energy Center (310 MW).
- 2The total purchase price for the two energy centers is $739 million.
- 3The acquisition is expected to close in December 2010.
- 4Cost recovery for the acquisition will be managed through an interim rider mechanism, as per a settlement with various stakeholder groups.
- 5PSCo is required to file a new retail rate case by April 30, 2012, to incorporate these assets into its rate base.
- 6Federal regulatory approvals (Hart-Scott-Rodino and FERC) for the acquisition have already been secured.
- 7The acquired assets will continue to provide energy and capacity to PSCo, replacing expiring power purchase agreements.