Xcel Energy Lays Out a $70 Billion 2027-2031 Capital Plan as the First Blue Lake Battery Units Arrive in Minnesota
- Energy Storage News Utility-Scale BESS
Marin Holt
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- 8 minutes read
- Base capital plan 2027-2031: $70 billion
- Renewables in the plan: 9.2 GW for about $21.7 billion
- Blue Lake battery: 135.5 MW, up to four hours
- Minnesota battery fleet by end of 2027: more than 735 MW
Xcel Energy set a $70 billion base capital plan for 2027 through 2031 in its third-quarter report on October 29, 2026. The Minneapolis utility said the plan is up 17% from its previous $60 billion plan. The same week, the first battery units arrived at its 135.5 MW Blue Lake storage site in Shakopee, Minnesota.
The plan calls for 9.2 GW of renewable generation, 2.3 GW of energy storage and 3.3 GW of natural gas generation. Utility Dive reported the split from the earnings call. Xcel expects the renewable share to cost about $21.7 billion. The plan also includes 2,400 miles of new transmission and $4 billion for wildfire mitigation. About $7 billion goes to data center projects already under contract.
The filing splits the spending by utility. Southwestern Public Service in Texas and New Mexico takes the largest share. NSP-Minnesota is second and Public Service Company of Colorado third. By function, renewables lead, then electric transmission and electric distribution. The plan excludes generation from the current requests for proposals. It also leaves out service to future large-load customers and any new MISO or SPP transmission.
CEO Bob Frenzel said Xcel could spend another $10 billion on projects outside the plan. That covers more than 15 GW in pending requests for proposals and high-voltage transmission. It also covers the 4 GW of new data centers the company expects to contract before the end of 2027. Xcel lists a 25 GW pipeline of new generation projects.
CFO Brian Van Abel said Xcel will fund the plan with $26 billion of new debt and $8 billion of equity. About 40% of the equity is already contracted. Third-quarter net income rose 83% to $960 million from $524 million a year earlier. Earnings came to $1.52 per share. Weather-adjusted electric sales are up 2.5% year to date.
Blue Lake sits on about 70 acres next to the Blue Lake peaking plant in Scott County. The Minnesota Public Utilities Commission issued the site permit on May 4, 2026, in docket 25-214. The project is rated at up to 135.5 MW and about 542 megawatt-hours. That is enough for up to four hours of output. Power Engineering reported that 132 battery units will go in and that the site will serve customers in 2027. Two more projects are planned at Becker. Xcel expects more than 735 MW of battery storage in Minnesota by the end of 2027. It calls that the largest battery portfolio in the Upper Midwest.
On October 9, NSP-Minnesota filed a rate stability plan that would freeze base rates for 2027 and 2028. It would offset new capital costs by recognizing federal investment tax credits from five battery storage projects over two years. The commission approved a $211 million increase over two years in July. Xcel wants a decision on the freeze by January 2027.
In Texas, the Public Utility Commission approved the SPS self-build portfolio in October. It left out the Plant X battery storage project. SPS said it will seek rehearing. Minnesota regulators are also reviewing a Google data center agreement at Pine Island. If approved, the agreement is expected to result in approximately $1.1 billion of benefits to NSP-Minnesota’s customers, Xcel said. The filing includes a Clean Energy Accelerator Charge for 1,900 MW of clean energy resources. A decision is expected in early 2027.
Why It Matters
The $70 billion plan is the base, not the ceiling. Xcel has already named another $10 billion of possible spending. It also expects to sign 4 GW of data center contracts within 14 months. Each gigawatt of new load pulls transmission, generation and storage into the next plan update.
For storage developers, the 2.3 GW target and the Minnesota buildout show where Xcel will own batteries itself. It will not buy them all from third parties. For ratepayer advocates, the $26 billion of new debt and $8 billion of equity set the cost of capital. That cost will flow into rate cases across eight states. The Minnesota freeze shows Xcel trading battery tax credits for two quiet years.
Critical Perspective
The $70 billion is a base plan that leaves out the three things driving the story: generation from the open 3,500 MW and 870 MW requests for proposals, service to the 4 GW of data centers Xcel expects to sign, and any new MISO or SPP transmission. The $10 billion Frenzel named for those items is a floor, not an estimate. Blue Lake’s 135.5 MW is permitted and under way, but the two Becker projects that make up most of the 735 MW are still plans, and Texas regulators just removed the Plant X battery from the SPS portfolio. Who pays if the next plan update adds $10 billion while the Minnesota rate freeze holds base rates flat through 2028?
Sources
- Utility Dive: Xcel Energy rolls out $70B, 5-year capital plan focused on renewables (Oct. 30, 2026)
- Xcel Energy third quarter 2026 earnings report, Form 8-K Exhibit 99.01 (Oct. 29, 2026)
- Power Engineering: Xcel Energy eyes the largest battery portfolio in the Upper Midwest (Oct. 28, 2026)
- Minnesota PUC: Blue Lake Battery Energy Storage Project, docket 25-214 (site permit May 4, 2026)
