Xcel Energy anticipates having Colorado regulatory decisions later this year on its purchase of two natural gas-fired generation plants and its plans to retrofit or replace up to 900 MW of coal-fired generation in the Denver area. The Minneapolis-based utility holding company also expects to start commercial operations at its Comanche III coal-fired plant in Pueblo, CO, in May.

The company reported first quarter results that were essentially flat on a quarter-over-quarter basis. On a generally accepted accounting principles (GAAP) basis, Xcel profits were $167 million (36 cents/share), compared with $174 million (38 cents/share), for the same period in 2009. On an ongoing basis not considering two one-time charges, earnings in the first quarter this year were slightly better than last year — 42 cents/share versus 38 cents/share in 2009.

Additional earnings and cost savings are expected from Xcel’s recently announced purchase of two gas-fired generation plants in Colorado from Calpine Corp. for $739 million, Xcel President Ben Fowke told financial analysts last Thursday, referring to the purchase announced earlier in April. Xcel’s utility operations have purchased power agreements with the two plants that combined represent 931 MW.

“We believe that owning these plants is important as we strive to meet Colorado’s new 30% renewable portfolio standard by 2020, and we believe the purchase will be accretive in 2011 [adding 2-3 cents/share of earnings],” Fowke said. As it does in other states, Xcel operates both natural gas and electric utilities in Colorado.

Xcel plans to file with the Colorado Public Utilities Commission (PUC) in May, seeking approval of the plant purchases, and it expects the regulators to make their decision before the end of this year, said Fowke, who noted that the acquisition will have a “small impact” on customer bills.

The plant purchase should close in December, he said.

In a related matter, Xcel also expects to file a plan for existing coal-fired generation plants in the greater Denver area, following Colorado’s new Clean Air Clean Jobs Act, establishing a timeline to retrofit or replace 900 MW of Xcel’s oldest, least-efficient coal-fired generation. Xcel plans to file its plan with the PUC and get a ruling on its plans by the end of this year.

“The law allows for rate recovery of the investment associated with the new law, and interim rates,” said Fowke, noting that it will help to achieve forward test years for Xcel’s Colorado utility, Public Service Company of Colorado, for future rate cases.

In addition, Fowke said Xcel “continues to make progress in putting Comanche III into operation,” while acknowledging the new coal-fired unit has encountered some pre-commercial start-up problems. He said the 750 MW unit produced nearly 800 MW during its recent pre-commercial testing. The unit is currently offline before its final testing.

“While we have several start-up issues to deal with, we are very confident this plant will deliver strong value to our customers,” Fowke said.

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