Xcel filed its most recent resource plan in May 2019, updating it last year. It’s packed with significant changes, and includes the first ever “energy equity” provisions in an Xcel resource plan.
Xcel must establish a “stakeholder group” to foster energy equity, which refers to improving the access of disadvantaged communities to clean energy and energy efficiency.
For Xcel, that would include designing programs to ensure that “distributed energy” — like community-owned solar gardens — is available “to low-income, Black and Indigenous communities of color that have disproportionately borne costs of unjust and inequitable energy decisions,” the PUC ruled.
Xcel must also form an “environmental justice accountability board,” and submit a plan — mostly likely by next year — to bring its workforce’s racial and gender diversity in line with its stated goals.
“I have been impressed with some steps the company has taken on diversity and equity,” PUC Commissioner Valerie Means said at a recent PUC meeting. “But It is clear there is a lot more to do.”
Central to Xcel’s latest resource plan are the early closures of its Allen S. King coal plant in Oak Park Heights in 2028 and its Sherco 3 generator in Becker in 2030. The PUC already has approved early shutdowns of Xcel’s Sherco 2 and Sherco 1 coal generators in Becker in 2023 and 2026, respectively.
Xcel’s latest resource plan originally called for a roughly $800 million natural gas-fired power plant in Becker to replace some electricity lost by the coal closures. But clean energy groups opposed it, saying it wasn’t cost efficient and would work against Xcel’s own goal of 100% carbon-free power by 2050.
So Xcel dropped the Becker gas plant plan in June. At the same time, the company announced plans to build two smaller gas plants — one each in southwestern Minnesota and North Dakota — at less than half the cost of the Becker plant.
Unlike the proposed Becker gas plant, these would be “peaking plants,” designed to run only when the grid is stressed by peak electricity demand — on very cold or very hot days, for instance.
But clean power groups opposed the new plan, too, saying renewable power, particularly solar — coupled with a fleet of grid batteries for storage — is cheaper and just as reliable as a new gas peaking plant.
In late January, Xcel agreed to kick the gas plant issue to its next resource plan, which is expected to be filed in 2023. The clean energy groups agreed to support Xcel’s bid to extend the federal license of Xcel’s Monticello nuclear plant, which expires in 2030.
That extension still will require a separate PUC proceeding for the addition of more nuclear waste at the Monticello site. And of course, Xcel must obtain permission from the U.S. Nuclear Energy Commission, a long process.
Monticello’s extension has been opposed by the Minnesota Department of Commerce. Its economic modeling shows that keeping Monticello open isn’t cost-effective. But that’s not the case for Xcel’s two Prairie Island nuclear generators in southeastern Minnesota, whose licenses expire in 2033 and 2034, Commerce concluded.
“By far the most cost-effective decision is to extend Prairie Island,” Stephen Rakow, the Commerce Department’s energy economist told the PUC.
Xcel would like to keep Prairie Island running, too, but it has put off that decision until its next resource plan. The company says it’s discussing the matter with the Prairie Island Indian Community, which is located next door to the plant and its toxic waste casks.
The PUC also approved Xcel’s broad plans for two new power lines that would be built in the late 2020s. The biggest would cost over $500 million and run 140 miles from Xcel’s massive coal complex in Becker to southwest Minnesota.
Both lines would allow Xcel to maintain its valuable transmission rights at its coal plants once they are closed — significantly reducing costs for grid interconnection. New renewable energy projects would be hooked into the new power lines.
Clean power groups have lauded the proposal. But some parties – including large industrial power users and the Minnesota Attorney General’s Office — have criticized Xcel for its planned ownership of renewable power plants that would be hooked into the transmission lines.
Xcel says regional power grid rules require it do so; the Attorney General’s Office says such an arrangement would inflate costs that would ultimately be borne by ratepayers. PUC commissioners, too, noted concerns about costs.
However, both power lines will have to go through extensive PUC proceedings even though they were approved as part of a master plan Tuesday.
Source: The Star Tribune
