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Xcel Plans to Sell Smaller Utilities, Focuses on Major Markets

Xcel Plans to Sell Smaller Utilities, Focuses on Major Markets

While being bullish about adding major generation assets in its two principal markets in Minnesota and Colorado, Xcel Energy is looking to sell some of its assets in other states where its presence is much smaller, said Xcel COO Dick Kelly, speaking last Wednesday at the Banc of America Securities Energy & Power Conference in Las Vegas.

Xcel now ranks as the fourth largest combination utility in the nation with 3.3 million electric customers and 1.8 million natural gas retail customers, generating $510 million in operating earnings last year, Kelly said.

Xcel continues to see the "potential for additional investment and growth" in the two states where its Public Service Company of Colorado and Northern States Power Co. utilities operate. Elsewhere, it is in the process of closing the sale of Cheyenne Light, Fuel and Power, and will be looking to sell other utility operations in places like Kansas, Oklahoma and Michigan, Kelly said.

"We're in the process of getting out of the larger non-utility businesses (telecommunications), we're out of Argentina now, and we're in 11 states, but a couple of them are very small (Kansas, Oklahoma and Michigan) so we would certainly look to getting out of those states," Kelly said. "We'd like to be in states where we have some presence and size, and we can have some impact on the politics and understand it. We'll look to get out of some of those smaller states when the time is right.

"On the acquisition side, we'll look for places within our footprint where we can expand into towns that are now served by other utilities, but we're not looking to go into any more states. Having as many states as we have (11) has been difficult enough, but we'll continue to look for new opportunities."

In regard to Xcel's largest outstanding generation project -- the 750 MW coal-fired unit in southeast Colorado --Kelly said he expected the Colorado Public Utilities Commission to make its decision sometime between mid-December and mid-January. Of that $1.3 billion project, Xcel expects to provide $940 million and take about 500 MW of the plant's overall capacity.

"The hearings wrap up this week, and we're guardedly optimistic that we'll receive sufficient regulatory assurance so we'll go ahead and build the plant," Kelly said. "We feel pretty good about where we're going with that."

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