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Xcel Energy plans natural gas-fired plants near Fargo

FARGO -- Xcel Energy is proposing two new natural gas-fired power plants 70 miles south of here to meet electricity needs at times of peak demand.

If approved by regulators, the two units, each capable of generating up to 215 megawatts of electricity, would be built near Hankinson and go into service in 2018 and 2019.

Xcel also has proposed a 215-megawatt peaking plant powered by natural gas to be built at its Blackdog power station 15 miles south of Minneapolis that would go into operation in 2017.

The three plants are planned to meet a gradual increase in power demand requiring an additional 150 megawatts in 2017 and up to another 350 megawatts in 2019 for its five-state service area, including North Dakota, Minnesota and South Dakota.

If the two Hankinson units are built, they would mark the first power generation plants in North Dakota to be owned and operated by Xcel, which has 90,000 electricity customers in the state, mostly in Fargo and Grand Forks.

The site near Hankinson was selected because of its proximity to the Alliance natural gas pipeline and an electrical transmission line.

Two factors stood out in choosing North Dakota for two of the new gas peaking plants.

"It's a state that prides itself on being business friendly," said Mark Nisbet, Xcel's principal manager in North Dakota.

"I think probably the biggest factor is North Dakota's continued expansion of natural gas products," which can reach the Alliance pipeline via "feeder" lines, he said.

Xcel also is evaluating proposals for 200 megawatts of wind power, including several in North Dakota. Xcel now leases power from an 18 megawatt wind farm near Velva.

The gas peaking plants would be a good complement to wind power, which is intermittent, and therefore not suitable as a source of what is called "base load," or the power level that a utility must provide for ongoing electricity demand.

Before choosing its wind power site, Xcel must be satisfied that the area is adequately served by electrical transmission lines, and that the wind developer has agreements in place with landowners, Nisbet said.

Several new wind projects have been proposed this year totaling 460 megawatts of capacity, joining a long list of possible projects dating back to 2008. Interest in wind development has picked up since January, when a federal tax incentive was extended for one year.

"There's more people wanting to do projects than there are buyers" for wind projects in North Dakota, said Jerry Lein, who tracks wind power for the Public Service Commission.

Usually, developers don't build projects until they have power agreements with utility customers, he said. North Dakota now has 991 wind turbines, with a total capacity of 1,672 megawatts, in service.

Meanwhile, work is underway for a new 210-mile transmission line linking Fargo to the Twin Cities.

The CapX2020 project, involving a partnership of utilities including Xcel and Otter Tail Power Co., will tie into the planned Bison power substation near Mapleton, with a line extending south and then east, crossing into Minnesota near Oxbow.

Concrete footings for some of the transmission line towers have been poured, and tower erection could begin this fall, Nisbet said.

The project, estimated to cost $500 million to $750 million, is slated to go into service in 2015 and will improve reliability and capacity of power transmission in the region, according to utilities and regulators.