Staff-Reported

Xcel Energy and Environmental Power Corporation’s  wholly owned subsidiary, Microgy, Inc., today announced that they have entered into a long-term renewable natural gas (RNG®) supply agreement, subject to approval by the Colorado Public Utilities Commission.

Xcel Energy will use RNG® to generate carbon-neutral electricity at the company’s Fort St. Vrain Generating Station near Platteville. The agreement will help Colorado’s largest utility continue to meet its mandates
under the state’s Renewable Energy Standard (RES) and support its efforts to reduce carbon dioxide emissions.

Microgy expects to begin construction on its first Colorado RNG® facility during the first half of 2010, when it currently estimates that all permits, design and funding for the project will have been completed. The technology company’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.

“Our relationship with Xcel Energy is very exciting for Environmental Power, as it demonstrates continued confidence in our ability to develop and operate renewable energy projects that produce a sustainable, high-volume renewable energy product,” said Rich Kessel, President and CEO of Environmental Power.

“Furthermore, it continues to demonstrate the long-term premium value of our RNG®, as it helps our customers achieve their renewable portfolio standards requirements.”

“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.”

Microgy’s RNG® will be produced and supplied to Xcel Energy
from a Microgy project to be located in Weld County.

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.

The renewable natural gas from this process is considered
“carbon neutral,” and will count toward Xcel Energy’s RES
mandate to produce 20 percent of its annual electricity from
renewable resources, by 2020. In addition, the company also is
working toward reducing carbon dioxide and other power plant
emissions.