Xcel Energy is seeking proposals for a major expansion of its Texas-New Mexico power generating system as older power plants are retired in the coming years and electricity demand is forecast to increase to meet the needs of a growing regional economy.
Power forecasts show that the region has a future need over 3 gigawatts (3,000 megawatts) of accredited capacity, which would translate to more than 5 gigawatts (5,000 megawatts) of additional nameplate capacity on the regional system by the end of the decade.
In comparison, the current peak demand in Xcel Energy’s Texas-New Mexico service area is a little more than 6,000 megawatts.
“We have served this region for more than 100 years, and we have a strong history of investing in power generating resources to sustain the growth of our communities and key industries at key points in their development,” said Adrian J. Rodriguez, president, Xcel Energy Texas–New Mexico. “We are excited to have another historic opportunity to realize an energy future that is cost-efficient, diverse and balanced with an aim of serving our customers economically for years to come.”
After months of studies and consultation with regional stakeholders, the company today launched a competitive bidding process known as an all-source request for proposals, or RFP, meaning bidders may submit any type of technology in this key step toward acquiring the needed power generating capacity.
“We are investing in real solutions for energy resources that support a robust economy well into the future without compromising grid reliability or customer affordability,” Rodriguez said.
Xcel Energy owns and operates a fleet of conventional power generating stations in its Texas-New Mexico service area along with two large wind energy facilities.
The region’s energy mix also includes electricity generated by outside suppliers and sold to Xcel Energy through long-term contracts called power purchase agreements, or PPAs.
The request for proposals issued today is seeking options for new PPAs, extensions or changes to existing long-term PPAs, self-build projects and build projects that transfer to Xcel Energy.
The 2023 Integrated Resource Plan filed with the New Mexico Public Regulation Commission was the first step in the process that led to today’s solicitation for new generation proposals – and initiated a process of evaluating resources that best meet cost, reliability and diversity standards for customers in both New Mexico and Texas over the next two decades.
Xcel Energy is working with an independent monitor appointed by state regulators to ensure the design and execution of the RFP is fair, competitive and transparent. In addition to the need to replace retiring power plants and provide for growth on the system.
Xcel Energy seeks to meet increased Southwest Power Pool resource adequacy requirements designed to ensure providers have power generating capacity in reserve in the event of a loss of scheduled power generation.
Xcel Energy is a member of the Southwest Power Pool, which oversees the reliability of a transmission network covering all or portions of 14 states and operates a wholesale power market.
Xcel Energy’s Texas-New Mexico request for proposals identifies the specific power needs in the years 2027, 2028, 2029 and 2030.
Bids from developers are due by Jan. 3, 2025. All documents and guidance for submission may be found on the xcelenergy.com webpage SPS 2024 All-Source RFP.
Xcel Energy will evaluate submissions with proposed commercial operation dates within or before May 1, 2027, to May 1, 2030.
The company expects to file its bid evaluation report and recommended portfolio to the New Mexico Public Regulation Commission for review in the second quarter of 2025.
Individual projects selected will be submitted for approval to the NMPRC and the Public Utility Commission of Texas, with decisions expected in summer 2026.