Xcel Energy Meets Emissions Reduction Goals.

Energy Editors/Business Editors

DENVER--(BUSINESS WIRE)--Feb. 11, 2004

After its first year of operation, Xcel Energy's (NYSE:XEL) Metropolitan Emissions Reduction Program (MERP) has achieved the emissions reduction goals established by the company and state leaders.

The team sought to reduce sulfur dioxide (SO2) emissions by up to 70 percent and further cut nitrogen oxide (NOx) emissions from Denver area power plants.

"We are very pleased to deliver on our promise for cleaner air," said Olon Plunk, vice president of environmental services for Xcel Energy. "Thanks to the flexibility and certainty offered through a strong collaborative effort, we have reduced emissions while saving our customers money. We could not have achieved these goals under traditional regulation."

Xcel Energy, state legislators, health officials, regulators, business leaders, and environmental groups, developed the nationally unique voluntary program. It called for the construction of massive emission control equipment at Boulder's Valmont and Denver's Cherokee and Arapahoe stations, and the early retirement of two generating units at the Arapahoe Station. The Colorado General Assembly passed legislation allowing the program in 1998, regulators approved the program in 1999, construction commenced in 2000 and the facilities became fully operational at the beginning of 2003.

In its first 12 months, the MERP prevented 22,500 tons of sulfur dioxide from reaching the skies over Denver. Xcel Energy cut SO2 emissions by 70.6 percent by channeling plant emissions through the large, new equipment that traps sulfur dioxide and captures it in the stations' baghouses, which already collect more than 99 percent of particulate matter.

By retiring Arapahoe's two units, Xcel Energy also cut nitrogen oxide emissions by 2,500 tons. Prior to the MERP, the company had reduced NOx emissions by installing low-NOx burners in Denver area generating stations.

"The MERP began with our customers, who expressed a desire to improve air quality. The Colorado General Assembly and other state leaders agreed and worked with us to craft a program that achieved this goal while keeping costs down," said Plunk. "While the plants each were performing better than their permit levels required, the MERP has led to even greater emissions reductions."

The Colorado General Assembly's 1998 legislation enabled the company to spend up to $211 million for necessary technology and construction costs. The bill allowed the company to recover these costs over a 15-year period through a monthly assessment on customer bills, beginning when the equipment became fully operational. Typical residential customers now pay approximately 74 cents per month and small business customers pay approximately $1.51 per month for the air quality improvement. The cost of the program to the customers is even less than originally anticipated in 1998. The Air Quality Improvement Rider will appear on customer bills through 2017.

Xcel Energy is the fourth-largest combination natural gas and electricity company in the nation with regulated operations in 11 Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.3 million electricity customers and 1.7 million natural gas customers through its regulated operating companies. Company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com.