Xcel Energy Inc. said April 6 that it will sell its 760-MW combined-cycle Mankato power plant to Southwest Generation Operating Co. LLC for $680 million and plans to use a portion of the proceeds to support its COVID-19 response.
The gas-fired facility in Blue Earth County, Minn., will continue to sell its output to Xcel Energy utility Northern States Power Co. - Minnesota under two long-term power purchase agreements, according to a news release. Xcel Energy unregulated subsidiary MEC Holdings LLC purchased the power plant in January from Southern Co. subsidiary Southern Power Co.
Xcel Energy acquired Mankato through MEC after Minnesota regulators in September 2019 rejected a proposal for Northern States Power to acquire the plant outright.
Xcel Energy plans to use proceeds from the sale to reduce its overall financing needs and improve credit metrics, and use the net gain to fund its corporate giving and COVID-19 relief efforts, according to the news release. Xcel Energy said selling Mankato continues its focus on being a fully regulated utility company. The transaction is expected to complete in the third quarter and will not affect short-term or long-term earnings.
Southwest Generation is a Denver-based independent power producer that owns and operates approximately 1.7 GW of generation capacity across the western U.S.