Looking into Xcel's 21.2% Rate Hike to Protect Market Share

On Monday Oct 25th, the headline hit the newsstands: Xcel Energy proposes a 21.2% rate increase for electricity.

MPR News: https://www.mprnews.org/story/2021/10/26/xcel-seeks-20-electric-rate-increase-over-three-years

Star Tribune: https://www.startribune.com/xcel-would-hike-residential-power-bills-nearly-20-in-new-rate-case/600109892/

That would be a $677.4 million increase in revenue for them, over a three-year period. Just more than half that amount can be expected to go into effect just next year in 2022 although Minnesota utility regulators softened the interim rate increases sought by Xcel on a December 9th ruling. 

In addition, Xcel is also proposing to raise the guaranteed rate of return it collects from customers to pay shareholders from a current 9.06% to 10.2% per year.

Even by that measure, a rate increase in the neighborhood of 20% is still a bit of a shocker and much higher than usual.

Chris Clark, the President of NSP, Xcel's subsidiary that serves Minnesota and the Dakotas is quoted in the Star Tribune "This is a pretty straightforward rate case. It's really focused on the poles and wires part of our business and making the necessary infrastructure investments."

Xcel is claiming the need to build new high voltage transmission (HVT) line infrastructure. 

It is standard behavior for investor-owned utilities to try to leverage their power to distort transmission system planning in their favor. Building new HVT lines makes it easier for a monopoly to keep new renewables under their market share and fend off competition.

Uprooting the structural inequality behind much of the rate hikes at its source would involve the energy democracy of making the build out of our energy system more of a public decision. Specifically, Xcel or any utility needs to be held accountable to maximize its opportunities to deploy new distributed renewable generation on the low-voltage distribution system, that can be consumed within the footprint of each adjacent substation, before building out new million-dollar-per-mile high voltage transmission lines.

(Read More Below)

Read more

Comment on Xcel's Revised Plan (Oct 15th Deadline) Regarding 2 New Gas Plants

Dear MN Public Utilities Commission (MNPUC),

In regard to any upcoming decisions on Docket 19-368, I am asking the commission to please defer any approval of Xcel's two proposed new methane gas Peaker plants to ensure adequate time for public input and evaluation of clean energy alternatives

First of all, we simply can’t afford to build and invest in NEW fossil fuel burning energy infrastructure during a climate crisis in which just this summer the IPCC (Intergovernmental Panel on Climate Change) issued a “Code Red” for humanity. (https://www.bbc.com/news/science-environment-58130705) Xcel Energy, however, is planning to do just that by adding two new methane gas Peaker plants (one each in Lyon County in southwestern Minnesota and another near Fargo North Dakota). Xcel is proposing both to supply electricity to Minnesotans despite at least three clear alternative 15-year energy plans (proposed by intervenors to this docket) that involve no new gas plants. Xcel has stated commitment to carbon reduction goals (a carbon-free electricity system by 2050) that are laudable in comparison to the low bar set by so many other electric utilities. However, it is well known that fossil methane gas power does not offer much net short-term greenhouse gas impact savings from coal because of difficult-to-prevent fugitive methane releases during the whole life cycle process, and because methane is a more potent greenhouse gas than CO2.  

The typical lifetime for such a power plant is 30 years but can be as much as 50. So therefore, building this new infrastructure would lock us into decades of more dependency on fossil methane gas, which poses risks to reliability and ratepayers, not just our climate. During the February 2021 storm, gas plants actually experienced the absolute highest outage rate due to equipment failures or fuel supply disruptions. (https://www.nytimes.com/interactive/2021/02/19/climate/texas-storm-power-generation-charts.html) Also utilities pass along the costs of volatile spikes in fossil gas prices directly onto customers. (https://www.oxfordenergy.org/wpcms/wp-content/uploads/2012/02/NG_60.pdf)

Read more

Xcel Drops Plan for New Sherco Gas Plant

Our voices were heard loud and clear! In an official filing on June 25th, Xcel Energy has dropped their plans to build the new Sherco Combined Cycle gas plant in favor of an alternative system resource mix !!!! In other words, we WON on the most urgent of fights! 

This win was a result of Clean Energy Groups and thousands of Xcel Energy customers voicing opposition to their proposed gas plant that would have emitted over 4 million metric tons of carbon per year! 

Chris Clark, the CEO of Xcel's subsidiary Northern States Power, stated in a Star Tribune Article, "One consistent theme in them (comments) was pretty strong opposition to our Sherco gas plant in Becker".

This is the most engagement the PUC has ever had around an Integrated Resource Plan and it has paid off!

On June 15th, community members and elected officials held "The People's Hearing" as an opportunity to speak out against Xcel's Plans to Build a billion dollar new gas plant with the recording submitted to the PUC as a comment.  Click here to see the video !  

This followed the June 8th presentation of the Alternative Plans to Xcel's that we are asking the MN Public Utilities Commission to approve and Click here to see a video.

Sierra Club, Fresh Energy, the Citizens Utility Board, and the Institute for Local Self Reliance have all developed 15-year energy plans that are cleaner, more affordable and more localized than Xcel's. Each organization used the same software that Xcel used to create their plan. But all concluded that there is no need to build this new gas plant (which Xcel has claimed for 5 years is necessary for reliability). But Xcel had refused to study any alternative scenario to building a new billion dollar fossil gas plant + pipeline. These alternative plans show that we could meet our energy needs by building much more distributed renewables, community solar and energy storage instead. 


Xcel Energy had spent the previous 5 years being so insistent that this new gas plant- at the site of their soon-to-be retired Sherco coal plants- was a necessity for the reliability of its electric grid, that the company did not include any alternative plans (until just now) and successfully pushed to get a state law authorizing this proposed gas plant in 2017 to circumvent regulators who required Xcel to study alternative plans. 

The fight for our energy future is NOT over though. Xcel has proposed to instead build 2 smaller Combustion Turbine gas plants — (one each in Lyon County in southwestern Minnesota and another near Fargo North Dakota) on claims that they are needed for reliability. These plant would be 400 MW each (adding up to the same 800 MW of new gas total that the Becker Plant would have). But these new gas plants would be peaker plans, operating only sporadically on an as-needed basis when electricity demand is high. Xcel's previously plan was to operate the planned Becker Gas plant almost continually as baseload power. So the greenhouse gas emissions difference is huge, being far lass than Xcel's previous plan. It's still new fossil gas. But on the good side, Xcel doesn't have legislative pre-approval for these proposed plants like they did for Sherco.

Because Xcel had legislative pre-approval to build a new gas plant in Becker, MN, Xcel has deciding on their own not to build it was the only way it could be stopped.

The stiff resistance that land & water protectors are giving to new oil and gas pipelines can also be credited for this win. Xcel’s previous plan for the Becker Gas plant would have required a roughly $200 million gas pipeline to supply it, which did not have legislative pre-approval and would still have to go in front of State Regulators.

Before going further, I hope we can take a minute to celebrate - this is a big very big deal.

Click the fold below to find out the other updates from Xcel's new Energy plan released in their June 25th Reply Comments.  


Read more

My Comment on Xcel's 15-Year Plan Part 2: More Fair Consideration of Distributed and Community Solar



The oddest and most bewildering problem with Xcel’s revised 2020-2034 Integrated Resource Plan is that it presents a dubiously low estimate for future new Community, Distributed and Rooftop Solar.

In 2019, I noticed a forecast for new non-utility owned community and distributed solar that declined by 90% from current levels despite recent growth trends and an abundance of projects still in the queue.

This points toward a pattern. Xcel also lowballed estimates for Community Solar back in 2013 shortly after the State Law requiring them of Xcel was passed. The company anticipated it to be a much smaller boutique program for a niche customer base who was willing to pay a bit extra.

On May 20th of 2019, about the same time as their coal plant retirement announcement, I attended one of Xcel’s Stakeholder sessions. I took a photo where they had estimated 154 MW of distributed and Community Solar and then it suddenly dropped to 22 MW for 2021.

Read more

My Comment on Xcel's 15-year Plan Part 1: Need Alternatives to New Sherco Gas Plant

I preface my comments on Xcel’s Integrated Resource Plan by echoing that this process is the one which Xcel Energy recently identified as “where we will be responsible for our progress”. On Thursday, January 21st, Xcel’s chief lobbyist Rick Evans spoke to State Lawmakers on the proposed 100% Clean Energy Standard on the basis that "legal mandates" were not as efficient and effective of a way toward meeting carbon free goals as “the resource planning process conducted by the MN Public Utilities Commission (PUC)”. Here is the exact quote which goes from 1:05:20 to 1:08:05 in this video listed online at: https://www.youtube.com/watch?v=tMt3gsGyK6A 


Read more