Xcel proposes three new natural gas power plants in Minn., N.D.

Xcel Energy on Monday proposed building three new electrical generators in Minnesota and North Dakota that would burn natural gas.

One unit in Burnsville and two near Hankinson, N.D., 70 miles south of Fargo, would supply power when customer demand is at its peak, and would not operate most of the time, the utility said in a statement.

The Minneapolis-based utility, which serves 1.2 million customers in Minnesota and 90,000 in North Dakota, has projected a need for additional electrical generation later in the decade.

Two older coal-burning units are to be retired in 2015 at Xcel's Black Dog power plant in Burnsville. The first of the proposed natural gas combustion turbines, with an output of 215 megawatts, would be built there by 2017, Xcel said. Two more similarly sized units would go online in 2018 or 2019 in North Dakota.

The utility didn't disclose estimated prices for the units.

"Our proposal responds to our customers' need for power that can be brought online quickly and efficiently to meet demand when it's highest," Judy Poferl, CEO of Xcel's Minnesota region, said in a statement.

"Further, our proposal provides flexibility to allow us to add resources only if they're needed."

Calpine, an independent power company based in Houston, is expected to propose building a new generating unit and selling the output to Xcel under a long-term contract.

The Minnesota Public Utilities Commission has authorized such a competitive process in which regulators would choose from projects submitted by Xcel, Calpine or others.

Calpine officials did not return calls and an e-mail Monday, but the company had earlier expressed an interest in building a natural gas-fired generator and selling the output to Xcel. Calpine owns a power plant in Mankato.

Xcel said the proposed natural gas plants would be its first new generation, other than wind power, in many years.