|Xcel's investment in wind energy|
|Increasing environmental awareness by the government|
|Increasing environmental awareness by consumers|
Xcel Energy (NYSE: XEL) is a holding company with subsidiaries in the electric utility and natural gas businesses. The company provides electricity to 3.3 million electricity customers and natural gas to 1.8 million customers in eight Midwestern states. Xcel's revenue exceeds $9 billion annually, and the company owns more than 34,500 miles of natural gas pipelines. Xcel also manufactures wind turbines and invests heavily in wind energy. Of the 25,300 megawatts of wind energy capacity in the U.S., Xcel Energy produced 3000 megawatts by the end of 2009. The American Wind Energy Association named Xcel Energy the nation’s top wind power provider for 2004-2009. Wind energy comprises 8 percent of Xcel's portfolio and by 2020 it projects that wind will comprise 20 percent.
Global climate change, the limited reserves of fossil fuels in the world, and government support for alternative, renewable sources of energy make wind power an especially promising investment for Xcel; it plans to double wind capacity by 2020. Currently, about 8 percent of the power generated by Xcel in the Upper Midwest comes from wind farms. Xcel's investment in wind energy has the potential to be profitable, but the large investment costs--85% of the cost of wind power production is installation--will need to be mitigated by a hike in utility prices. While regulators might be willing to raise prices in order to switch to a renewable source of energy, it remains to be seen whether or not consumers will tolerate higher prices.(Read more at Wikinvest )