Summary
Xcel Energy Inc. (XEL), through its subsidiary Public Service Company of Colorado (PSCo), announced the completion of its acquisition of two natural gas generation assets: the Rocky Mountain Energy Center and the Blue Spruce Energy Center. The total purchase price was $739 million, plus an additional $3 million for working capital adjustments, for a combined total of $742 million. These assets, with a total generating capacity of 962 MW, were previously operated under power purchase agreements with PSCo and were set to expire in 2013 and 2014. This acquisition represents a strategic move by PSCo to bring these essential generation facilities under its direct ownership. By internalizing these assets, PSCo is likely aiming to gain greater control over its power supply, potentially improve operational efficiencies, and manage costs more effectively in the long term. Investors should monitor how this integration impacts Xcel Energy's overall operational strategy, capital expenditures, and future earnings.
Key Highlights
- 1Public Service Company of Colorado (PSCo) completed the acquisition of Rocky Mountain Energy Center and Blue Spruce Energy Center.
- 2The total purchase price for the two natural gas generation assets was $739 million, plus $3 million for working capital adjustments, totaling $742 million.
- 3Rocky Mountain Energy Center has a capacity of 652 MW and Blue Spruce Energy Center has a capacity of 310 MW, for a combined total of 962 MW.
- 4Both power plants were previously supplying energy and capacity to PSCo under power purchase agreements set to expire in 2013 and 2014.
- 5The acquisition marks a shift from power purchase agreements to direct ownership of critical generation assets.
- 6The transaction was initially agreed upon in April 2010 and closed on December 6, 2010.
- 7Working capital adjustments are subject to verification within 90 days of the closing date.