Summary
Xcel Energy Inc. (XEL) subsidiary NSP-Minnesota's proposed acquisition of the Mankato Energy Center (MEC) was denied by the Minnesota Public Utilities Commission (MPUC) on September 27, 2019. The MPUC cited uncertainty regarding customer benefits and the need to review NSP-Minnesota's Resource Plan. In response, Xcel Energy plans to acquire MEC through a new, non-rate regulated subsidiary under the same purchase agreement. This subsidiary will assume existing power purchase agreements and continue to sell power to NSP-Minnesota. Filings for approval are expected with FERC and MPUC in early October 2019, with anticipated approval by year-end. Importantly, management expects this development to have no material impact on 2019 financial results and reaffirms its earnings per share guidance.
Key Highlights
- 1MPUC denied NSP-Minnesota's request to acquire the Mankato Energy Center (MEC) for approximately $650 million.
- 2The MPUC's denial was based on uncertainty regarding estimated customer benefits and the review of NSP-Minnesota's Resource Plan.
- 3Xcel Energy will pursue acquisition of MEC through a new, non-rate regulated subsidiary.
- 4The new subsidiary will operate under the existing purchase agreement with Southern Power Company.
- 5The subsidiary will continue selling power to NSP-Minnesota through existing purchase power agreements until 2026 and 2039.
- 6Xcel Energy reaffirms its 2019 earnings per share guidance of $2.55 to $2.65, expecting to meet or exceed the midpoint.
- 7The company does not expect a material impact on 2019 results from this MPUC decision.