Xcel Energy Sells Natural Gas-Fired Plant for $680M
- Apr 09, 2020
COVID-19’s impact on the energy market fueled also by the Saudi Arabia-Russia oil price war creates new ripples in the industry. Xcel Energy, the first large investor-owned utility to set a goal of 100 percent carbon-free energy by 2050, has announced its intention to sell the Mankato Energy Center, a 760-megawatt natural gas-fired power plant located southwest of Minneapolis.
The announcement comes just three months after Xcel Energy had acquired the facility from Atlanta-based Southern Co. for $650 million. Mankato Energy Center is a natural gas-fired 2×1 combined-cycle facility contracted with Northern States Power through 2026. The utility had first filed to acquire the asset in 2018, asserting that the plant was an important step in achieving its clean energy goals. Now it will sell it to Denver-based Southwest Generation for $680 million.
The deal is anticipated to close in the third quarter, without material impact on short- or long-term earnings, according to the utility. Current employees will continue working at the plant and Xcel Energy will maintain its power purchase agreement with the facility. Xcel Energy will use the proceeds from the sale to reduce its overall financing needs during these unprecedented times, which prove challenging even for the largest players in the industry.