Xcel Energy expects that a trove of tax subsidies in recently passed federal energy legislation will save the company and its customers about $500 million over the next five years.
That update came Thursday with Xcel's announcement that its third-quarter profits rose 4.4%. Still, its earnings fell short of Wall Street estimates.
President Joe Biden's energy package — dubbed the Inflation Reduction Act — will provide billions of dollars in new tax credits for solar and wind farms and a host of other energy projects, including nuclear power plants.
Minneapolis-based Xcel expects the tax credits, which are based on power production, will lead to savings of $500 million for company-owned renewable projects over several years.
The company says $209 million of that will go to the massive Sherco solar project, which would be one of the largest solar farms in the Midwest.
Sherco Solar will be four times as large as the state's biggest existing solar array, also owned by Xcel. It will be located in Becker, where Xcel hosts three coal-fired power plants slated to close by 2030.
The PUC approved Sherco Solar in September despite concerns about its price tag.
Originally slated to cost about $575 million, Xcel this month publicly disclosed that due to inflationary pressures, the price is now expected to be $690 million. The new tax subsidies created by the Biden legislation will effectively help cover cost increases for the project.
