Minneapolis-based Xcel Energy Inc. is seeing opportunities to buy more natural gas assets after agreeing to spend $650 million for Mankato Energy Center, according to CEO Ben Fowke.

Mankato, MN, combined-cycle gas plant would be operated as a nonregulated power provider with a long-term contract to supply Xcel’s Minnesota utility, the CEO said during a conference call Thursday.

Fowke said the multi-state utility holding company’s focus is centered on renewables, but as its retires its last two coal plants it must look to acquire strategic gas-fired assets that it now contracts with under purchased power agreements (PPA).

“We believe that Mankato has tremendous value and reliability consistency, which is why we have filed with the state public utilities commission to own and operate the plant as a nonrate based asset and assume the existing PPAs,” said Fowke. He expects a regulatory decision by January.

The returns as a nonregulated asset are expected to be lower than they would be as a utility asset in the near-term because the benefits are “back-end loaded,” he said. Because the company’s PPA strategy contains customer benefits, Xcel is going to continue to look for similar opportunities.

“The trend toward anti-gas makes existing gas assets valuable, and we are retiring our coal plants and are keenly focused on reliability,” Fowke said. Referring to the Mankato plant, he said, “I think the value in existing gas assets is only going to grow, and this is a combined-cycle plant that we modeled very conservatively.”

Separately, Xcel has submitted plans to Minnesota regulators that would lead to a more than 80% reduction in carbon emissions in the region by 2030 compared with 2005. Xcel expects to provide 100% carbon-free electricity by 2050.

For the quarter, Xcel reported net earnings of $527 million ($1.01/share), compared with $491 million (96 cents) for the same period last year.