Xcel Energy and Pueblo steel mill strike fixed rate agreement including 240-MW solar plant
Energize Weekly, August 29, 2018
Xcel Energy and one of its largest Colorado customers, EVRAZ Rocky Mountain Steel, have struck a unique agreement that gives the steelmaker a fixed electricity rate for 23 years and a 240-megawatt solar installation at the plant.
The Colorado Public Utilities Commission (PUC) has to approve construction of the photovoltaic solar facility at the EVRAZ mill in Pueblo. The details of the purchase power agreement are confidential and have not been released.
The Xcel deal helps keep the plant operating in Pueblo. The steelmaker had said it might leave Colorado.
“We saw a great opportunity to retain a valued customer, assist in its expansion in one of southern Colorado’s premier communities, and increase use of cleaner energy,” Alice Jackson, president, Xcel Energy-Colorado, said in a statement. “Working together, we found an innovative approach to expanding renewable energy that benefits not only EVRAZ, but all our customers.”
EVARZ makes advanced steel for rail, seamless pipe and wire rod, and employs about 1,000 workers. “Achieving long-term price certainty on energy is a key first ingredient for considering further investments,” said Conrad Winkler, president and CEO of EVRAZ North America.
“This agreement forms a foundation for EVRAZ to evaluate investment projects directed at upgrading and modernizing major components of its hot-rolling operations at its mill in Pueblo, Colorado, and is contingent on EVRAZ executing these investment projects by 2024,” the utility and company said in a statement.
The solar installation will be placed on the customer side of the meter on EVRAZ’s 1,600-acre mill site and net metered so that it can serve both the plant and the grid.
“EVRAZ’s move to renewable energy through this new solar project in combination with their ability to interrupt quickly will lower cost for other customers,” Jackson said.
The solar project has been folded into Xcel Energy’s $2.5 billion Colorado Energy Plan, which was approved by the PUC Aug. 27. The plan aims at shuttering 660 megawatts of coal-fired generation at Xcel’s Comanche Generating Station, also in Pueblo.
The plan also calls for the adding 1,100 megawatts of new wind generation, 700 megawatts of new solar generation statewide, 275 megawatts of new battery storage and acquisition of 385 megawatts of existing natural gas generation.