More Talk About Xcel’s Wind and Solar Procurement

Xcel has announced its intention to increase its combined wind and solar percentage to 35% of its energy mix.

Very positive news for wind and solar developers, especially near-term, because we have to think Xcel will procure most of this before the expiration of the extended PTC and ITC.

In the articles discussing this, one point stands out — that is Xcel’s intention to own 50% of these renewables. Meaning these renewables will not be procured under a PPA, and meaning there may be no landowner “royalty,” particularly if the subject lease does not include a mechanism for adjusting/addressing lease economics in the case of a utility project purchase.

Many leases, including those of the big developers, do not address utility purchase issues — maybe on the presumption that the landowner compensation will revert to the minimum payment in the case of utility ownership.

Regardless, this is more evidence of the importance of carefully reviewing the underlying lease/easement and the PPA (if you can get it) when analyzing a wind lease revenue stream, as utility ownership (which appears to be an expanding trend) will affect lease value.

http://renews.biz/101394/xcel-plans-renewable-capacity-rise