Xcel Enters Renewable Natural Gas Agreement

Microgy and Xcel Energy have announced a long-term renewable natural gas (RNG) supply agreement, which will likely power over 15,000 homes in Colorado when the projects are fully completed.

Xcel Energy will use RNG to generate carbon-neutral electricity at the company’s Fort St. Vrain Generating Station near Platteville, Colorado, allowing the company to continue to meet its mandates under the state’s Renewable Energy Standard.
Microgy expects to begin construction on its first Colorado RNG facility during the first half of 2010, when it estimates that all permits, design and funding for the project will have been completed. Microgy’s initial project in Colorado is expected to produce 915,000 MMBtu of RNG per year, enough to generate 125,000 megawatt-hours of electricity, or the equivalent power use of 17,000 homes in Colorado on an annual basis.

“This effort further gives us the opportunity meet both our renewable energy and emissions reductions targets in Colorado,” said Tim Taylor, President and CEO of Public Service Co. of Colorado, an Xcel Energy company. “Microgy’s solution also gives us the added benefit of conserving traditional fossil fuels at one of our largest power plants.”
The ten-year agreement with Xcel Energy has an option to renew for an additional ten years. Under this agreement, Microgy’s RNG will be sold at a fixed premium compared to the current market price for traditional natural gas. Microgy’s RNG will be produced and supplied to Xcel Energy from a Microgy project to be located in Weld County, Colorado.
Microgy will use an anaerobic digestion process to break down animal waste from a local dairy farm and other organic waste products, such as food processing residuals, from along the Front Range of Colorado. The waste stream will be converted to methane gas using the anaerobic digesters. In turn, the methane will be used to help produce electricity at Fort St. Vrain, Xcel Energy’s largest natural gas generation facility in Colorado.
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