Electric services firm Xcel Energy has unveiled its plans to sell the Mankato Energy Center, a natural gas-fired power plant, to Southwest Generation, a Denver-based independent power producer, for $680m.
The company has bought the power plant in early 2020 through a non-regulated affiliate company, and Southwest Generation has offered to purchase the facility earlier this year.
Southwest Generation is an independent power producer that owns and operates approximately 1.7GW of generation capacity across the western US. The firm is owned by institutional investors advised by JP Morgan Asset Management.
Xcel Energy chairman and CEO Ben Fowke said: “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.
“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.”
Xcel Energy will use net gain from sale to support the fight against COVID-19
Xcel Energy intends to use the proceeds from the sale of its 760MW power generation facility to reduce its overall financing needs and improve the company’s credit metrics. The net gain from the sale will be used to fund the activities supporting the recovery from COVID-19.
The transaction is expected to be closed in the third quarter of 2020 and once the transaction is completed, existing employees will continue to work at the plant and Xcel Energy will continue buying power from the facility.
Xcel Energy is engaged in producing and delivering clean energy solutions from a variety of renewable sources, to power millions of homes and businesses across eight Western and Midwestern states.
Southwest Generation CEO John Foster “Southwest Generation is excited to add the Mankato Energy Center to our growing portfolio. The plant is a key part of the transition to a lower carbon grid and we’re pleased to expand our relationship with Xcel Energy, which is leading that transition in the United States.”
