What:

The Minnesota Public Utilities Commission quietly helped along Xcel Energy’s request to use ratepayer renewable energy fund dollars to retrofit a garbage processing facility to provide more trash to burn in Xcel’s Red Wing, MN, incinerator. The $2 million grant would provide just under one-third of the cost to retrofit the city’s waste processing facility, enabling it to send up to 20,000 tons of trash per year to the Xcel-owned 20-megawatt incinerator. In selecting this grant award, Xcel bumped aside several other projects that scored higher on the Renewable Development Fund objective scoring system.  

To place it in a larger perspective, this incident looks to be part of a broader network of shady deals between public officials and the garbage incineration industry such when Washington and Ramsey counties recently purchased a privately-owned garbage grinding facility in Newport, Minnesota. 

Background:

In 2014, Red Wing closed a city-owned incinerator due to age and poor economics. Their current waste processing facility lacks capacity to supply garbage to Xcel’s nearby incinerator.

What the Public Utilities Commission did was to approved Xcel’s request to remove 4 defunct items from the ratepayer-bankrolled “Renewable Development Fund,” substituting instead 3 projects from a “reserve list.” The retrofit that would supply Xcel’s Red Wing garbage burner was one of the three moved up. The proposed “renewable” grant would upgrade the city’s current trash processing facility, sending up to 20,000 tons per year of trash to Xcel’s own 20-megawatt garbage burner in Red Wing.

The city of Red Wing’s letter to the PUC illustrates how funding this project from a ratepayer renewable energy fund will be of financial benefit to Xcel for garbage burning:

“Lower Operational Costs for Xcel Energy.

Xcel historically receives approximately 180,000 tons of RDF [Refuse Derived Fuel] from the Newport facility [another garbage grinder], but has capacity to burn approximately 200,000 tons. The goal of the Red Wing facility is to provide the 20,000 ton capacity gap Xcel is experiencing. This would improve the economies of scale for Xcel and reduce downtime due to lack of fuel which occasionally occurs. This efficiency improvement will increase cost effectiveness for Xcel Energy, lowering operational costs for the company.”

 The Renewable Development Fund originated in 1994 as a fund requiring Xcel to direct money to renewable projects as an "offset" for being able to store nuclear waste at Prairie Island. 

The stated purpose of the ratepayer Renewable Development Fund is to:

• Increase the market penetration of renewable electric energy resources at reasonable costs in the state;

• Promote the start-up, expansion and attraction of renewable electric energy projects and companies in the state;

• Stimulate renewable electric energy research and development in the state;

• Develop demonstration scale renewable electric energy projects of near-commercial renewable electric generation or near-commercial electric infrastructure delivery technology that enhance the delivery of renewable electric energy within the state; and

• Provide benefits to Minnesota citizens, businesses and Xcel Energy’s electric ratepayers

The original prioritization of the garbage burner on the reserve list was controversial among the funds’ advisory group. Despite the advisory group’s concern, Xcel pushed to create a Tier I & Tier II, and place the Red Wing burner in Tier I:

“The RDF grant proposal by the City of Red Wing will support the operation of our Red Wing power plant and, consequently, provide direct benefits to our ratepayers.  In order to achieve these benefits sooner rather than later, we believe elevating the City’s proposal to the Tier I reserve list is warranted”

Requests for consideration were due in 2014 so the PUC has said will not take a motion to reconsider.