As coal-fired power in Texas struggles to compete against gas-fired and renewable power, the planned addition of nearly 4,000 MW of wind capacity means it could exceed coal in Texas as soon as this year.
Xcel's Hale project in Texas and Sagamore facility in New Mexico will combine to provide 1 GW and are expected online in 2019 and 2020, respectively. Energy for the Bonita PPA with NextEra will be generated at facilities in Cochran and Crosby counties in Texas.
David Hudson, president of Xcel's New Mexico and Texas operations, said in a statement that the "new wind farms will help power a growing regional economy with clean energy while providing the lowest-cost generating resource on our system. Not only will these wind farms save customers money, but they’ll also preserve precious water resources and spur regional economic activity."
Xcel said the project will save hundreds of millions of dollars in fuel costs over 30 years by offsetting generation from the region's conventional power plants. The two facilities Xcel Energy will build also qualify for 100% of the federal production tax credit; those benefits will be passed on to customers, the company said.
The 478 MW Hale Wind Project will be constructed first, near Planview, Texas. Xcel expects to begin construction in June. Construction on the 522 MW Sagamore Wind Project near Portales, N.M., will begin next year.
In addition to powering about 360,000 homes, Xcel said the two projects would create approximately 600 construction jobs and 40 to 50 full-time positions. The wind farms will also generate $154 million in additional revenue for state and local governments and school districts.
New Mexico regulators gave their approval in March. Following that decision, Sen. Martin Heinrich (D-N.M.) said the Sagamore project would be a boon to the local economy, producing an estimated $43 million in gross receipts tax revenue for the state.
The project "will lower the cost of energy production and boost our economy here in New Mexico," Heinrich said in a statement.