Xcel Energy Inc. said Monday it sold a 760 MW natural gas-fired power plant in Minnesota to a merchant generator for $680 million, with plans to use the proceeds for its corporate giving efforts, including support for the ongoing Covid-19 response.
Xcel expects the sale of the Mankato Energy Center to Denver-based Southwest Generation LLC to close in 3Q2020. Proceeds would be used to reduce overall financing needs and improve credit metrics with the net gain put toward charity.
The company said details associated with its funding of coronavirus relief efforts are still being worked out.
“This is an unprecedented time, and we want to do our part to support our communities as we face the challenges brought on by the Covid-19 pandemic,” said CEO Ben Fowke. “The Mankato Energy Center and its workforce provides essential services for local and regional economies and that will not change. And now more than ever, the people we serve need safe, reliable, affordable power.”
The plant would still provide electricity to Xcel’s upper Midwest customers, but the company said the sale would better allow it to focus on operating as a fully regulated utility. The company purchased Mankato earlier this year from an affiliate of Southern Co. for $650 million, but Southwest Generation made an offer on the facility as its fleet of gas-fired facilities has grown. Xcel said current employees at the plant are expected to continue working after the deal closes.
Xcel serves customers in eight western and midwestern states, while Southwest Generation operates 1.7 GW of generation capacity across the western United States.
Monday’s announcement follows a series of others across the natural gas value chain in which companies have pledged millions of dollars to help in the global response to the Covid-19 pandemic.
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