Xcel Energy has come under heavy fire from state regulators at the Department of Commerce as well as the State Attorney General's office for inaccurate, misleading modelling to justify a proposal that would increase greenhouse gas emissions while increasing costs to Minnesota ratepayers.
Xcel Energy had been crafting its 15-year "Integrated Resource Plan" around an assumption that it would acquire the already existing natural gas plant from Southern Company, known as the Mankato Energy Center (MEC). It got to the point where Xcel was working to get its proposal approved by regulators outside of the designated IRP process. Back in May, several large environmental groups made a partial settlement with Xcel to not oppose the MEC acquisition in exchange for closure dates on coal power plants in the IRP (which probably would have been coming anyway). That gave the Xcel's proposal so much momentum that it made it seem inevitable that Xcel would get Minnesota ratepayers to pay $650 million for this purchase of an existing natural gas plant. But then, Xcel Energy's recent proposal came to a hearing on Friday, September 27th at the MN Public Utilities Commission, which has the official role as the guardians of the public interest. The PUC ultimately decided not to give Xcel Energy permission to charge Minnesotans for an expensive natural gas plant through 2059. The proposal was denied on in a 5-0 vote.
The plant was slated to operate through 2059 - which is long past the deadlines when we need to have moved beyond natural gas - and where an early shutdown would have posed an extra cost to Minnesota energy users.
At the hearing, a spokesperson from argued why they should be able to use Minnesotans' money to bankroll the highly priced gas plant and risks decades of volatile fuel costs and locking in emissions from fracking plus the debt involved for the next 40 years.
There was even a competing natural gas power plant operator who identified ways in which Xcel was proposing to pay extra (at Minnesota ratepayers expense) while rejecting a cheaper natural gas resource.
And we had some fun with it during as seen in our video here: https://www.facebook.com/MinneapolisEnergyOptions/videos/715118825632535/ and with the Live Tweets: https://twitter.com/MplsEnergyOpts
The Commissioners rejected Xcel's preferred proposal as not in the interest of Xcel customers over its cost, a view shared by Citizens Utility Board (CUB), the Office of the Attorney General and some of Xcel's large industrial customers.
From 2009 to 2016, Volkswagen cheated on emissions tests. In 2016, they were forced to pay $2.9 billion into a trust for states, tribes, and Puerto Rico to mitigate the environmental damage they caused. Minnesota’s share of that settlement is $47 million, which will be spent over three phases and administered by the Minnesota Pollution Control Agency. The settlement allows money to be spent in two ways: reducing emissions from diesel vehicles and expanding electric charging infrastructure.Read more
At the Minneapolis Clean Energy Partnership board meeting on June 17th, all parties of the Partnership (Xcel, Centerpoint and the City of Minneapolis) unanimously agreed to a motion that laid out a path forward for an Inclusive Financing Pilot project in or around Minneapolis.
The Inclusive Financing board motion “reaffirms the partnership’s commitment to explore in good faith and Inclusive Financing pilot program that provides a reasonably beneficial service to customers”. It also outlined a list of key features for the pilot program as well as a list of next action steps for the partners (Xcel, Centerpoint and Minneapolis Partnership) to take this year.
This is treading new ground.
Currently existing inclusive financing programs around the nation have originated under rural electric cooperatives who serve much smaller constituencies than Xcel and Centerpoint. The East Central Co-Op in Minnesota had already implemented a program that is similar to PAYS.
There is no precedent for Investor Owned Utilities making Inclusive Financing available voluntarily or for an Inclusive Financing program that serves urban areas.
Settlement to close coal plants says more about the poor state of monopoly utility oversight than climate change
On May 20, 2019, after closed-door negotiations with a few environmental groups and the labor union LIUNA, Xcel Energy announced an agreement on early retirement of its coal plants, new solar commitments, and buying a fracked gas plant.
While Xcel retiring its coal plants, committing to ramped up energy efficiency, and adding 3,000 megawatts of new solar by 2030 are significant wins for Minnesota’s health, environment, climate goals, and energy customers, it comes at a high cost.
Xcel shareholders make out handsomely from the deal. The monopoly utility wins a cease fire over its proposal to purchase an existing gas plant in Mankato. Taken together with the proposed Becker gas plant that it won through legislative hijinks two years ago, the projects will add well over one billion dollars to the company’s rate base - i.e. the amount energy users pay a guaranteed rate of return to Xcel upon.
By JOHN FARRELL |May 23, 2019 at 12:33 am
Earlier this week, Xcel Energy announced an agreement with several environmental organizations over its upcoming 15-year resource plan. Highlights include early retirement of its coal plants, new solar commitments, and buying a fracked-gas plant. While there are several significant wins for Minnesota’s health, environment, climate goals, and energy customers, it comes at a high cost for measures that the state’s utility regulators should require of the utility without concession.
Xcel shareholders make out handsomely. The monopoly utility wins a cease fire over its proposal to purchase an existing gas plant in Mankato. Taken together with the proposed Becker gas plant that it won through legislative hijinks two years ago, the projects will add well over $1 billion to the company’s rate base — the capital expenses that the utility’s shareholders earn profits on.Read more