By Mark Jaffe, EUCI energy writer
Exelon and Xcel Energy – two of the country’s top 10 investor-owned utilities – unveiled multibillion-dollar capital investment plans focused on renewable generation and storage in their third-quarter earnings presentations.
Xcel Energy announced a five-year, $70 billion capital plan – a 17% increase from the previous plan – with the goal of developing 9.2 gigawatts (GW) of renewable generation, 2.3 GW of energy storage, and 3.3 GW of natural gas generation.
The price tag on the renewable portfolio is estimated as $21.7 billion and another $18.5 billion will be spent on 2,400 miles of new transmission.
“We have a generational investment opportunity to rethink how we power and energize our communities,” Bob Frenzel, Xcel Energy’s CEO, said during the earnings call.
Exelon executives said the company is in line to spend $3 billion to $7 billion on 1.5 GW to 3.5 GW of regulated energy storage in addition to the already announced $1 billion, 500-megawatt project in New Jersey.
“With regulated storage, we have certainty that projects get built, and control over when and how they’re deployed,” Robert Kleczynski, Exelon’s CFO, said during the earnings call. “We view utility-owned storage as one option alongside competitive development, not a replacement for it.”
The company is also projecting spending $16.7 billion on transmission through 2029.
Minneapolis-based Xcel Energy serves parts of eight states – Minnesota, North Dakota, South Dakota, Wisconsin, Michigan, Colorado, New Mexico, and Texas – through its four subsidiaries.
The company’s two largest markets are Minnesota and Colorado. Its fastest growing markets are in Texas and New Mexico where it is serving a growing oil and gas industry.
The North States Power Co. in Minnesota, is in line for $24.8 billion in investment. The Public Service Company of Colorado is set to receive $16.1 billion in financing and Texas and New Mexico’s Southwestern Public Service Co. $25.8 billion.
About $7 billion in the plan will go to serving data centers. The company has 2 GW of data centers under construction and 4 GW contracted for by the end of 2027. This includes small-scale urban data centers of 10 MW to 20 MW and hyperscale projects of 1,000 MW.
“We are seeing projects in the backlog, in the portfolio in both camps,” Frenzel said. “We are spending a lot of time with hyperscalers.” He said the company could spend as much as $10 billion more on data center projects not in the plan.
One other major expenditure will be $4 billion for wildfire mitigation. In 2021, the Marshall Fire swept through a portion of the Colorado Front Range burning 6,000 acres and destroying 1,000 homes.
Boulder County officials determined that Xcel Energy powerlines were a cause of the fire. The company challenged the finding, but settle a massive lawsuit for $640 million.
Chicago-based Exelon serves 11 million customers across Delaware, the District of Columbia, Illinois, Maryland, New Jersey, and Pennsylvania. The grid serving the states is the PJM Interconnection.
PJM has struggled to bring sufficient new generation on to the system, according to Calvin Butler, Exelon president and CEO.
PJM is calling for a “backstop” auction to fill a 6.8-gigawatt gap in generation. The grid operator has also proposed an Interim Resource Adequacy Service requirement for data centers and other large loads to provide their own generation. Both are stalled at the Federal Energy Regulatory Commission (FERC).
“Neither proposal would have solved the reliability and affordability challenges facing our customers, but both represented important steps forward,” Butler said, adding the combination of storage and transmission could help manage challenges on the grid.
Exelon has filed a complaint with FERC urging the PJM auctions to be fast tracked.
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