AMARILLO, Texas (June 28, 2019) – Xcel Energy customers in Texas will receive a one-time, $16 million refund in October related to several months of lower costs for natural gas used to fuel area power plants – savings that are expected to continue with the addition of the new Hale Wind Project near Plainview, which started commercial operations today.

“Historically low costs for natural gas and the addition of more wind energy are significantly reducing monthly fuel charges on customer bills, which in turn help to stabilize customer bills now and in the foreseeable future,” said David Hudson, president, Xcel Energy – Texas.

Xcel Energy filed the refund proposal today at the Public Utility Commission of Texas. If approved, residential customers using 1,000 kilowatt-hours a month would receive a one-time credit of $14.53. The refund will be based on the amount of electricity a customer uses in September, and could be spread over two months depending upon a customer’s billing cycle. Texas customers also received a fuel-cost refund in January that amounted to $11.76 on a typical residential bill.

In addition to the one-time refund, Xcel Energy has also reduced the fuel cost factor on customer bills to better reflect current and anticipated costs for natural gas, which is the fuel source for about 50 percent of the region’s electricity supply. The lower factors will reduce residential bills by close to 5 percent starting July 1. These savings, combined with expected savings from the new Hale Wind Project, will mostly offset future base rate increases that will be necessary to recover the costs of the wind farm and a significant investment in the region’s power grid over the past several years.

“Our investments in the regional grid require a large amount of capital spending, but they are the types of investments that make electricity more economical to produce and deliver to our customers,” Hudson said. “The efficiencies gained from adding wind resources and improving the grid, combined with low natural gas prices, have driven residential bills down by more than 4 percent in four years, even before the latest savings are figured in.”

Construction on the Hale Wind Project started in the summer of 2018. It is one of two large wind farms approved by state regulators that same year to help lower fuel prices by offsetting power production at area fossil fuel generating stations. The other plant, the Sagamore Wind Project, will be located near Portales, N.M., in Roosevelt County. Construction at Sagamore is expected to start by early fall.

The Hale Wind Project came on line today, on time and under budget. More than 300 workers were

involved in its construction, building 239 turbines that will generate enough electricity to power 184,000 typical homes in the region. There are no fuel costs associated with wind generation, and Xcel Energy is passing along 100 percent of the federal production tax credit to customers through the monthly fuel cost factor. These benefits make Hale the least expensive generating resource in Xcel Energy’s Texas-New Mexico generating fleet.

Additionally, Hale and Sagamore will play large roles in helping Xcel Energy reduce carbon emissions by 80 percent by 2030. By 2050, Xcel Energy aspires to a 100 percent carbon emissions reduction target.

Additional Detail

  • Xcel Energy’s business and industrial customers also will receive refunds in October related to the low natural gas prices. New Mexico customers and customers of electric cooperatives and municipal utilities that purchase electricity on the wholesale market from Xcel Energy won’t receive refunds because the additional savings have already been accounted for in their pricing, which is adjusted month to month.
  • Fuel costs for residential customers make up 20 to 30 percent of a monthly bill. They are passed through dollar-for-dollar to customers with no profit to Xcel Energy.
  • The fuel cost factor in Texas can be adjusted up to three times per year to reflect changing market conditions. It recovers the cost of purchasing coal and natural gas to fuel area power plants, and also the cost of power purchases.
  • Xcel Energy’s Texas-New Mexico generating mix in 2018 was 49 percent natural gas, 30 percent coal, 19 percent wind and 2 percent solar.

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About Xcel Energy

Xcel Energy (NASDAQ: XEL) provides the energy that powers millions of homes and businesses across eight Western and Midwestern states. Headquartered in Minneapolis, the company is an industry leader in responsibly reducing carbon emissions and producing and delivering clean energy solutions from a variety of renewable sources at competitive prices. For more information, visit xcelenergy.com or follow us on Twitter and Facebook.