The Dakota Range I and II sites have been developed by Apex Clean Energy. According to Xcel, the complex is the first "publically announced wind project to advance under the phase down of federal tax credits".
The site is expected to be fully completed by 2021 and will feature Vestas turbines, the firm said.
Under the five-year phase-out of the support scheme, only projects that met the criteria by the end of 2016 would be eligible for the full $0.023/kWh credit.
Projects that begin construction this year, or have a certain amount of capital committed, will qualify for 80% of the full credit.
This will decrease by a further 20 percentage points each year until 2020.
"This is a milestone for our industry and our customers," said Xcel Energy CEO Ben Fowke.
"This project proves we can keep driving the clean energy transition of our supply mix while keeping customer bills low, even as incentives phase out," he added.
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