Sale of 760 MW natural gas-fired power plant in USA

Xcel Energy announced today it will sell the Mankato Energy Center, a natural gas-fired power plant, to Denver-based Southwest Generation for USD680 million, and plans to use the net gain on the sale to fund its corporate giving efforts, including support related to COVID-19 recovery. The 760-megawatt plant will continue to provide electricity to the company’s Upper Midwest customers.

Xcel Energy purchased the plant in early 2020 through a non-regulated affiliate company. Earlier this year, Southwest Generation offered to purchase the facility to add to its growing fleet of natural gas plants. While the plant will still provide value for customers, selling the facility will continue Xcel Energy’s focus as a fully regulated utility company.

The proceeds from the sale will primarily be used to reduce Xcel Energy’s overall financing needs and improve the company’s credit metrics, with the net gain from the sale to fund its corporate giving and COVID-19 relief efforts. The sale is expected to close in the third quarter of 2020 and is not expected to have a material impact on short or long-term earnings. Current employees are expected to continue working at the plant and Xcel Energy will continue buying power from the facility.

Details associated with the relief efforts are still being worked out, but Xcel Energy will use the proceeds from the gain on the sale to support corporate giving and additional support for recovery efforts associated with COVID-19.