AMARILLO, Texas – After extensive evaluation of proposals for new power generating resources, Xcel Energy has announced plans to move forward with three large solar generating facilities near existing power plants in its Texas-New Mexico service area and extend an existing power purchase contract for firm, dispatchable power generation.
A supplementary recommendation Xcel Energy is considering includes battery storage projects that can store energy generated for use in different time periods.
“As clean energy technologies evolve, a diverse resource mix is of vital importance to ensure continued high reliability while maintaining the affordability of the power we provide,” said Adrian J. Rodriguez, president, Xcel Energy – New Mexico, Texas. “Our region’s abundant sunshine provides some of the best solar power opportunities in the nation and these new projects help us fulfill commitments to our employees and host communities while utilizing one of our greatest natural resources.”
The new company-owned solar facilities would be located at Cunningham Generating Station near Hobbs, New Mexico, and Plant X Generating Station near Earth, Texas. Both facilities currently house multiple natural gas-fueled generating units that were placed in service as far back 1950s and 1960s and have reliably served regional customers for decades. Locating solar facilities at these locations supports the existing workforce and host communities while saving customers money by using existing connections to the power grid.
Xcel Energy is also interested in installing battery resources on the system that can store energy generated by other power plants for later use. Proposals for four-hour duration battery storage will be further evaluated and potentially proposed to state regulators for approval, along with the solar facilities and power purchase agreement extension.
“We have a long and mutually beneficial relationship with communities near Cunningham and Plant X that have provided us with a talented workforce, and our investments provide tax revenue that helps our communities maintain services to their citizens,” Rodriguez said. “We’re excited about the new opportunities that will extend these benefits into the future.”
Two solar plants near Hobbs would have a combined nameplate capacity of 268 megawatts and the facility at Plant X near Earth would be constructed with a nameplate capacity of 150 megawatts, providing enough clean solar energy to power about 140,000 typical Xcel Energy customer homes on average. Given the intermittent nature of solar generation, total accredited capacity from these facilities would total approximately 280 megawatts.
More detail on the solar technologies to be used and the process for building the facilities at Cunningham and Plant X will be released later this summer when proposals are submitted to regulatory bodies in both New Mexico and Texas. Decisions would be expected in 2024 with the new solar plants in service by 2026 and 2027.
The projects were chosen from both internal and external proposals that were solicited through an all source, competitive solicitation issued last fall, following review and agreement from an independent evaluator. Xcel Energy’s request for proposals sought the best options for replacing retiring power plants with reliable and affordable generating resources. These projects were selected as the lowest cost power generating resources to continue reliable service to Xcel Energy’s Texas and New Mexico customers.
The selection process did not include proposals for replacing generating capacity from the planned 2028 retirement of two coal-fueled generators at Tolk Generating Station in Texas. Xcel Energy will take up this issue as part of its Integrated Resource Planning, or IRP, process and will file its IRP proposal in October 2023. This will be followed by another request for proposals to be issued in mid-2024 to select replacement resources for Tolk’s retiring coal generation.
Close to 40% of the region’s electricity is provided by renewable energy, mostly from area wind energy facilities. Xcel Energy has saved its customers close to $700 million in generating costs from wind energy alone since 2019 and expects to realize even more savings by adding additional solar generating capacity. These investments are also moving Xcel Energy closer to the goal of reducing carbon emissions by 80% by 2030.
Clean energy, a smarter, more efficient power grid and more tools for customers to control their energy use and costs are part of a larger transformation of the region’s power system. More information on Xcel Energy’s plans for the future in Texas and New Mexico can be found at Our Energy Future for the Southwest at xcelenergy.com.
