Xcel Energy's SPS Selects 3,121 MW Capacity Portfolio for Enhanced Operational Capacity and Compliance with Renewable Standards.

Xcel Energy's SPS subsidiary has selected a 3,121 MW capacity portfolio, including wind, solar, storage, and natural gas resources, to address projected load growth and reliability needs. The move is expected to enhance SPS's operational capacity and compliance with renewable standards. The stock's overall score is Neutral, supported by stable financial performance and strategic corporate events.

Xcel Energy's subsidiary, Southwestern Public Service Company (SPS), has unveiled a strategic blueprint for future power generation, selecting a significant portfolio of resources to add 3,121 megawatts (MW) of accredited capacity to its system by 2030 [1]. This move is a critical step in addressing projected load growth and enhancing grid reliability across its service territory.

The portfolio, detailed in a public filing with the New Mexico Public Regulation Commission (NMPRC), includes a mix of natural gas, wind, solar, and battery storage resources. Specifically, the selected portfolio encompasses 2,088 MW of natural gas, 1,273 MW of wind, 695 MW of solar, and 1,112 MW of battery storage capacity [1]. This blend reflects a pragmatic approach to energy transition, ensuring grid stability while advancing cleaner energy sources.

The majority of these new resources—4,528 MW of nameplate capacity—are slated to be company-owned, implying substantial capital expenditures in the coming years [1]. The remaining 640 MW of storage capacity will be secured through power purchase agreements. The next steps for these projects involve filing Certificate of Convenience and Necessity (CCN) applications with both the NMPRC and the Public Utility Commission of Texas (PUCT) in the second half of 2025, with approvals anticipated in 2026 [1].

SPS's Integrated Resource Plan (IRP), accepted by the NMPRC in February 2024, projected resource needs ranging from 5,300 MW to 10,200 MW of nameplate capacity by 2030 [1]. To meet these growing demands and replace retiring resources, SPS issued a Request for Proposal (RFP) in July 2024, seeking approximately 3,200 MW of accredited generation [1]. The chosen portfolio represents a substantial commitment, encompassing 5,168 MW in total nameplate capacity [1].

Looking further ahead, SPS also plans to issue a second RFP to solicit at least 500 MW of additional accredited capacity through 2032, signaling ongoing investment in its energy infrastructure [1]. This expansion aligns with the company’s strong financial position, generating $13.7 billion in revenue over the last twelve months [2].

The announcement is part of Xcel Energy’s five-year investment plan for Texas and New Mexico, announced in October 2024, and is expected to enhance SPS's operational capacity and compliance with renewable standards [2]. The company's long-term financial stability is supported by a stable beta of 0.37 and a current dividend yield of 3.27% [2].

References:
[1] https://www.panabee.com/news/xcel-energy-charts-future-with-3-121-mw-power-portfolio-balancing-gas-and-renewables
[2] https://www.investing.com/news/company-news/xcel-energy-unveils-5168-mw-capacity-expansion-to-meet-growing-demand-93CH-4142380