Xcel Energy 2004 Annual Report Download - page 6

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Xcel Energy Annual Report 2004
4
Our objective is to deliver fi nancial results that lead to annual dividend increases at a rate
consistent with our long-term earnings growth rate objective of 2 percent to 4 percent.
We also discontinued several businesses in 2004 that were not strong contributors to
our core. They included Planergy International Inc., an energy management company;
our e prime inc. natural gas trading operations; and effectively all assets of Xcel Energy
International Inc. We announced that Seren Innovations, Inc., is for sale and, in early
2005, we completed the sale of Cheyenne Light, Fuel and Power Company.
Selling assets was just one element in delivering on our strategy, which we accomplish
by relying on two value drivers:
– investing in our system; and
– earning our authorized return.
investing in our system
With energy demand growing, we are making signifi cant investments in our generation,
transmission and distribution systems that should prove to be our most robust value
driver. One of the biggest efforts is our plan to build a 750-megawatt generating
unit called Comanche 3 at our Comanche coal-fi red facility near Pueblo, Colo. We
achieved a major milestone in the Comanche 3 project at the end of 2004, when the
Colorado Public Utilities Commission approved it as part of our least-cost resource
plan. We are pursuing other approvals and permits before construction can begin.
The least-cost resource plan outlined options to meet the need for 3,600 megawatts
in the state by 2013, while strongly considering Colorado’s environmental needs.
All of Comanche’s generating units will be fi tted with advanced emission-reduction
equipment, including Comanche 3. Although we will more than double the facility’s
current 660-megawatt capacity, overall sulfur dioxide (SO2) and nitrogen oxide
(NOx) emissions from Comanche will decline. We also will signifi cantly expand our
energy conservation programs in Colorado, accelerate a study of additional renewable
resources, explore innovative technologies to reduce greenhouse gas emissions and
account for potential carbon reduction regulation when we do our resource planning
in the future.
Xcel Energy will own 500 megawatts of Comanche 3, which could begin producing
electricity by 2010. The total cost for the 750-megawatt power plant, including all
required transmission lines, is an estimated $1.35 billion.
Energy demand is growing in Minnesota, too, where we fi led a similar resource plan
to meet a projected 3,100-megawatt demand for new generation by 2019. As in
we are making signifi cant investments