Xcel Energy to Purchase Mankato Energy Center

Xcel Energy announced that it has agreed to purchase the Mankato Energy Center, a 760-megawatt natural gas power plant from Southern Power, a subsidiary of Atlanta-based Southern Company. The plant currently provides power to Xcel Energy customers under a power purchase contract.

“Securing the Mankato gas plant is a great value for our customers as it will provide significant cost savings and operating flexibility for the long term,” said Chris Clark, president, Xcel Energy—Minnesota, South Dakota, North Dakota. “As we continue to transition to cleaner energy sources and reduce reliance on coal, this plant will help us continue to deliver reliable electricity while keeping bills low.”

Xcel Energy is planning for several power plant retirements and contract expirations in the mid-2020s. Acquiring this plant now provides certainty that energy from these newer generating units will be available and benefit customers over the life of the plant compared to simply purchasing the output. These benefits include more flexibility as we continue to add renewable energy and analyze the future of our always-on power plants, as well as reducing the risk from expiring power purchase agreements in the next decade.

Investing in regional energy benefits customers and communities
Xcel Energy currently has nearly 100 employees in the Mankato area with several facilities, including a power plant and a service center. The company is also building a new transmission line in the area to deliver low-cost energy to customers throughout the region.

“Xcel Energy has a long history of serving customers in the Mankato area. Securing this plant gives us the opportunity to deepen our ties to the community,” said Clark.

Xcel Energy has purchased power from the plant’s first unit since 2006 and has an agreement for the energy from the under-construction second unit beginning in 2019. Xcel Energy agreed to purchase the plant for $650 million. Current employees will be offered jobs with Xcel Energy.