The terms of the agreement, which must be approved by the Minnesota Public Utilities Commission, were not disclosed.
The plant, on a site north of Downtown, will cost about $300 million and use surplus equipment from Calpine's inventory. Construction will start in early 2005 after the company obtains environmental, local and state regulatory approvals.
Minneapolis-based Xcel put out a request for proposals for the plant in late 2001. An Xcel spokeswoman says since the company isn't involved in the building of the plant, permits and construction are being handled by Calpine. Xcel already works with Calpine in Colorado, where Calpine will soon expand to provide a total of 900 megawatts of electricity to Xcel from two power plants.
The new Minnesota contract calls for the supply of 280 megawatts of intermediate power plus an additional 85 megawatts of peaking capacity. Service is scheduled to begin in 2006. Xcel will use the electricity generated by the plant to serve its customers in five Upper Midwest states: Minnesota, North and South Dakota, Wisconsin and parts of Michigan.
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