MINNEAPOLIS (AP/WCCO) — Xcel Energy says it will sell its natural gas-fired power plant in southern Minnesota to Southwest Generation for $680 million and use the funds, in part, to support COVID-19 recovery efforts.
Xcel Energy had recently purchased the plant in early 2020 through a non-regulated affiliate company. Then, Southwest Generation, a Denver-based company, offered to buy the facility.
“This is an unprecedented time, and we want to do our part to support our communities as we face the challenges brought on by the COVID-19 pandemic,” said chairman and CEO of Xcel, Ben Fowke. He added, in a statement, “The Mankato Energy Center and its workforce provides essential services for local and regional economies and that will not change. And now more than ever, the people we serve need safe, reliable, affordable power.”
After the purchase, the 760-megawatt Mankato Energy Center will continue to provide electricity to the company’s Upper Midwest customers. Xcel says proceeds from the sale will primarily be used to reduce the utility company’s overall financing needs and improve its credit.
The sale is not expected to have a material impact on the company’s short-term or long-term earnings. The current employees are expected to continue working at the plant, and Xcel Energy will continue buying power from the facility.
However, the net gain from the sale will fund Xcel’s corporate giving and COVID-19 relief efforts.
The sale is expected to close in the third quarter of 2020.
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