Xcel Energy reaches innovative energy deal with EVRAZ: Joint collaboration enables steel mill to remain competitive
August 17, 2018
Xcel Energy Colorado and EVRAZ Rocky Mountain Steel in Pueblo, Colorado have agreed to a long-term electricity contract that will provide electric price certainty through 2041. The unique arrangement, filed today (8/16) and subject to approval by the Colorado Public Utilities Commission, was guided by statutory language and allows the steel mill to remain competitive and expand operations in Colorado. Building a customer-sited 240-megawatt solar facility on EVRAZ property is key to the deal.
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, said Alice Jackson, president, Xcel Energy Colorado. Working together, we found an innovative approach to expanding renewable energy that benefits not only EVRAZ, but all our customers.
The EVRAZ North America team is very excited at the opportunity to be a forerunner in the use of renewable energy to make the most advanced steel for rail, seamless pipe, and wire rod said Conrad Winkler, President and CEO of EVRAZ North America. Achieving long term price certainty on energy is a key first ingredient for considering further investments.
Xcel Energy also noted that a long-term agreement between the company and EVRAZ would solidify the steel mill's continuing operations in Colorado, with positive economic impacts. 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.
Jackson indicates that the agreement benefits all Xcel Energy customers in Colorado. As one of our largest customers, 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. Even more important, EVRAZ's commitment to stay and expand operations helps us keep bills low over time while creating tremendous economic benefit for the region.
This agreement is part of Xcel Energy's Colorado Energy Plan, which is currently before the Commission. The company has proposed the early retirement of 660 megawatts of coal-fired generation at its Comanche Generating Station, which is also located in Pueblo. The plan also calls for the addition statewide of 1,100 megawatts of new wind generation, 700 megawatts of new solar generation, 275 megawatts of new battery storage, and acquisition of 385 megawatts of existing natural gas generation.
Renewable energy is one contributor that has already helped Xcel Energy reduce average residential consumer bills by about nine percent in the past five years and the Colorado Energy Plan is expected to contribute further to this trend. The proposed plan would invest $2.5 billion in new Colorado energy sources that put the company on a path to reducing carbon emissions 60 percent by 2026. Once executed, if approved, renewable energy would account for 55 percent of Xcel Energy's supply mix, with a substantial amount of solar and storage being developed in the Pueblo region.
Our vision is ambitious and we appreciate EVRAZ's commitment to working with us to find a creative solution to their needs but at the same time deploys clean energy sources that are reliable, low cost, and valued by our customers and communities, Jackson said.
About Xcel Energy
Xcel Energy (NYSE: XEL) provides the energy that powers millions of homes and businesses across eight Western and Midwestern states. Headquartered in Minneapolis, the company is an industry leader in responsibly reducing carbon emissions and producing and delivering clean energy solutions from a variety of renewable sources at competitive prices. For more information, visit xcelenergy.com or follow us on Twitter and Facebook.
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