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)

 For context and a brief recap of the backstory, Xcel Energy had spent the previous 5 years being so insistent that a new Combine Cycle (CC) gas plant- at the site of their soon-to-be retired Sherco coal plants- was such an unquestioned necessity for reliability, that the company did not announce any alternative plans without it until June 25th and went as far as to successfully lobby for the 2017 state law authorizing that particular proposed gas plant to circumvent the skeptical MNPUC who required Xcel to study alternative plans. 

 

Then finally, this year, Xcel was successfully convinced to drop its plans to build their proposed new 835 MW Combined Cycle (CC) gas plant at Sherco. This announcement on the previous June 25th comment deadline was a result of multiple Clean Energy Groups creating alternative 15-year energy plans plus thousands of Xcel Energy customers voicing opposition to this 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".  (https://www.startribune.com/xcel-drops-plan-for-big-new-gas-power-plant-in-becker/600072020/) Thank you to Xcel Energy for revising the plan to NOT include the new fossil gas plant at Becker, and also for their commitment to supporting their employees at Becker during this huge transition.

However, in its June 25th filing, Xcel countered by proposing to build two 400 MW gas-fired Combustion Thermal (CT) Peaker plants in the years 2027-2029. (In addition to these 800 MW, Xcel also plans to refurbish 2 other CT gas plants for an additional 300 MW of gas but those are not of primary concern). These new proposed new gas plants currently do not have the legislative workaround that Xcel successfully lobbied for in 2017 with their Sherco Gas plant. So they must be approved by the MN Public Utilities Commission (MNPUC). 

Xcel’s announcement from June 25th was a step in the right direction for overall carbon reduction. The proposed CT Plants emit far less CO2 due to a much lower capacity factor. CT Plants aka “Peaker plants” will only operate for full power on a sporadic as-needed basis when electricity demand is higher than usual. These Peaker CT plants would run for only a fraction of the time in comparison to the Sherco CC plant, which would have operated almost continuously as baseload power. These less frequently used plants are a big reduction in climate pollution as compared to Xcel’s original proposal moving carbon reduction from 80% to 86% from baseline according to the company’s numbers.

In addition, construction of these CT new gas plants would be much less expensive than new CC plants overall. However, the flip side of these comparative savings is that peaker plants emit more carbon emissions per unit of electricity due to being less efficient. That means they also emit disproportionately more health-damaging air pollutants – mainly ozone forming chemicals like nitrogen oxides (NOx) and harmful particulates – that contribute to poor local air quality and harm public health. (https://www.cleanegroup.org/ceg-projects/phase-out-peakers/ )

(NOTE: Basically, in a Combustion Turbine (CT), the gas is burned and the resulting heat and pressure are used to directly drive a turbine. In a Combined Cycle (CC), in addition to combustion turbine electricity generation, the “waste heat” from the CT is used to make steam to drive a second turbine. The overall efficiency (i.e. conversion of energy in gas to electrical energy) is therefore greatly increased.)

One interesting twist to their proposal is that Xcel Energy claims that these new CT plants will be "100% Hydrogen Ready" and will eventually be converted to burning hydrogen. But this suggests an attempt at greenwashing the public or the commission as there are no details on how this transition is to occur and no apparent plans to prototype Hydrogen production. The hydrogen which the plants are to burn must be produced with no GHG emissions, and Xcel does not yet have a plant to produce what is known as “green hydrogen”. Currently, most hydrogen is made by reacting methane with steam, a process that produces more CO2 per energy delivered than just burning the methane itself. There are other potential issues associated with hydrogen burning such as safety, and pollutants such as NOx which contribute to smog and respiratory problems.  Xcel has not provided any analysis of these issues in the recent filing. As far as emerging technologies go, why hasn’t Xcel been as enthusiastic to embrace flow batteries for example as they were with hydrogen?

Furthermore, and even more central to the MNPUC’s quasi-judicial role, Minnesota law requires utilities to consider non-fossil fuel alternatives before building new fossil gas plants. That means Xcel Energy can only build renewable facilities from now on unless they can actually show or demonstrate why a new renewable facility would not be in the public interest compared to a new non-renewable facility. (Minn. Stat. § 216B.2422, subd. 4). But once again, Xcel did not fully evaluate clean energy alternatives for their proposed alternative plan. Every scenario Xcel modeled (tested) for this alternate plan included the proposed new methane gas CT Peaker plants.

So, in effect, the company still does not admit or demonstrate how adding the 2 new Peakers is a more affordable energy pathway than solar plus storage- the latter which has already proven itself to provide great reliability with providing peak power in many parts of the country. What Xcel did reveal is that its new proposal (without the Sherco CC gas plant) would save its Minnesota customers over $600 million in comparison to their previous proposal with the Sherco CC plant. In doing so, Xcel has effectively (though implicitly), finally admitted that large new gas plants are at least to some degree an unnecessarily expense choice in energy planning that can't compete with wind and solar. 

At least four intervening organizations, Northstar Sierra Club (https://www.sierraclub.org/minnesota/blog/2021/02/sierra-club-proposes-clean-energy-for-all-alternative-xcel-irp) Fresh Energy and Partners, (https://fresh-energy.org/xcelenergy-irp) and the Institute for Local Self Reliance, and Citizens Utility Board MN (https://cubminnesota.org/the-consumers-plan-1-billion-savings-with-cleaner-energy-for-xcel-customers/) did this required analysis and created alternative 15-year energy plans using the same modeling software as Xcel. Guess what they all found? All concluded that there is no need to build the proposed Sherco CC gas plant (which Xcel has claimed for 5 years was necessary for reliability). The alternative plans found that Minnesota can meet energy needs with a lot more local, distributed renewable power, efficiency, "demand-response" and storage AND no new gas plants, all while maintaining reliability and slashing energy costs by over $1 billion annually. (See video of the alternative plans being presented here: https://www.facebook.com/watch/live/?ref=watch_permalink&v=150812970431485 )  

In contrast, Xcel has been very selective with their modeling and what inputs they use both in the previous plan and the current plan – by refusing to test any renewables, aggressive efficiency and storage-focused energy future without the new gas plants. Xcel can't legitimately make a blanket claim that “more renewables plus storage won’t work so therefore new gas plants are necessary” when they refused to even test any other scenario.

The apparent justification Xcel provided to not even consider alternatives was maintaining the position that storage could not replace Combustion Turbine Peaker plants, allegedly because the batteries couldn't operate during a polar vortex. Xcel also has a misleading statement on page 43-44 where they say that during the vortex, wind speeds were 70%-85% below normal, whereas their chart shows they were 70%-85% of normal (eg, 15%-30% below normal). 

The big question is whether some combination of aggressive energy efficiency goals and additional load shifting by improved demand-side management (which could reduce storage requirements) and, together with wind and solar power, could eliminate the need for the Peaker plants. Is Xcel hesitant to look into this question because they are afraid of what the outcome of such a study would be? Xcel must have a huge ulterior motive if they would go as far as violating a previous PUC order and State Statute in order to avoid studying any options that would undermine their claim that a new gas plant is necessary. Xcel is understandably incentivized to want new gas plants because it is infrastructure that they get guaranteed profits from and (apparently though “gen-tie” lines) stabilize their monopoly over energy generation that is under fire from a rapidly transforming and modernizing grid.  

On that topic of monopoly control, Xcel has also shown a pattern of forecasting an unrealistically low amount of new community and rooftop solar despite its popularity, which leaves Xcel to capture more profits from new renewables added to the system. 

At their May 20th, 2019 stakeholder meeting, Xcel not-so-subtlety cited "market conditions" for a huge decrease in community-scale projects though the "market" is a monopoly in which they pull the strings. (The exchange is captured on a tweet at https://twitter.com/MplsEnergyOpts/status/1130946604540809218/photo/1 )

To spotlight the same problem from a real world standpoint with real consequences, Minnesota solar developers have also filed 120 complaints against Xcel for “slow walking” local, community-based competition (e.g. solar projects not owned by the utility). (https://energynews.us/2021/09/20/long-waits-to-connect-to-xcels-grid-are-stalling-minnesota-solar-projects/)  In addition, there were no apparent improvements in distributed solar since Xcel's previous plan other than that if we get more distributed solar than Xcel's low estimates, it gets taken out of the utility scale solar column.  

While Xcel’s more recent report did give a nod to the fact that they have never effectively included distributed and community-based clean energy in their plans, it still suggests that the vast majority of new clean energy will be centralized, and utility owned. In effect, the company does not take a fair account for the mounting evidence that roof-top and community scale solar plays a vital role in keeping our grid resilient and affordable (as shown in the David Roberts article  " https://www.volts.wtf/p/rooftop-solar-and-home-batteries) Distributed solar offers resilience, efficiency, and wealth-building ownership opportunities (for example, cooperative ownership) that utility scale solar does not.

 

Xcel new plan includes 575 MW of distributed solar, but it drops to a 15 MW/year addition after 2024. So, they're still treating it as a passive addition, based on a policy-driven forecast (only through Solar*Rewards and Community Solar Gardens), rather than treating distributed solar as a resource (like any other resource in their model). Xcel needs to incorporate distributed solar more robustly into their resource modelling, treating it as a selectable resource rather than relying on questionable forecasts. 

Xcel's focus on combustion turbines for back-up power is still missing the boat on the potential for distributed energy + storage. So, regarding distributed generation potential, each substation in the state/region/nation/continent could be connected to community-based generation capacity no greater than its minimum load, other things being equal.  That means that the existing Minnesota grid can accommodate over 10,000 MW of new community-based distributed renewable generation. 

Xcel's faulty projections imply a preference for company-owned renewables (that tend to be more centrally located) over community-owned renewables (that tend to be more dispersed), and in so doing force their gas plants through as necessary for reliability (since renewables provide less fluctuation in supply when placed in more locations).

One brief word about coal to illustrate the point: Xcel’s current plan is to wait until 2030, 2026, and 2023 to shut down the last of three of its MN coal plants, despite losing money every day they are open. The “Consumer's Plan” proposed by CUB saves $1 billion annually by shutting all coal plants down by 2025 and replacing that energy supply by incorporating small scale distributed solar with energy storage. (https://cubminnesota.org/the-consumers-plan-1-billion-savings-with-cleaner-energy-for-xcel-customers/)

Back to the central ask for the commission, these Peaker plants that Xcel added to the plan at the last moment (following years of delays) are not proposed to be built until 2027-2029. Because at least one more new 15-year energy plan (IRP) will be submitted by Xcel before then, there is no need for the MN Public Utilities Commission to rush to include these hastily proposed plants in this Integrated Resource Plan (IRP) docket. This is comparable to the situation with Xcel’s Prairie Island Nuclear plant where the company is kicking the decision about relicensing the plant and extending its operating life to the next IRP docket to provide more time to engage the tribe on Prairie Island and other stakeholders. While the IRP is allegedly a 15-year energy plan, the actionable part seems more effectively like a 5-year plan because that is approximately how often it gets revised.

Xcel’s new alternate plan includes adding firm dispatchable resources as needed in the near-term, while maintaining flexibility in the latter years to incorporate new technologies that help meet grid needs. These vaguely defined "firm dispatchable" resource additions start in 2026, so it is beyond what the current the five-year action plan would cover. Delaying any decision until the next IRP Process would give ample time for Xcel, stakeholders, and the public to evaluate alternatives while moving other pieces of the IRP forward without more delay, while being able to take advantage of the continued downward slope in renewable and storage battery technology's prices. We need to look ahead to new technologies, not backward to old ones with increasing prices.

By the year 2034, the cost of energy from fossil gas is predicted to be twice that of solar and 60% higher than that of wind. Xcel Energy itself says in their 2017 Colorado Energy Plan Fact Sheet that “We are not building any new natural gas generation, reducing the risk of stranded costs”. (https://mn350.org/bad-for-st-paul/)  Why wouldn’t this also apply in Minnesota? We don't want to be paying years for power plants that can no longer compete with renewables. In regard to the above quote, stranded assets would mean a scenario when Xcel Energy owns a facility that has become obsolete or too costly to operate. If it is not completely paid for, the remaining stranded costs would be passed on to their customers (that’s us!) on our monthly bills.

There is an open question on the extent to which Xcel’s Nuclear Power Plants can become stranded assets. Unlike Xcel’s proposed Sherco CC gas plant, this same docket did in fact receive some commentary from the public in favor of nuclear power from a carbon reduction standpoint. Xcel is at least considering extending the operating life of Prairie Island Nuclear Plant (Their Monticello Nuclear Plant License extension is already requested). While the facility itself is considered by Xcel to be "Carbon Free", it is arguably not carbon free from a life cycle analysis in requiring energy to refine uranium into fuel. Going broader than climate, it has created a risky situation of storing dangerous nuclear waste in the Mississippi River floodplain.

We will have to address the extent to which nuclear power is needed for achieving the dual goal of both reliability and ensuring carbon reduction. However, Xcel can’t frame or talk about these extensions as if they somehow involve almost no extra cost. As Xcel’s most recent nuclear plant extensions showrepairing and maintaining nuclear power plants beyond their original operating life typical costs Minnesotans hundreds of millions of dollars. (https://ilsr.org/minnesota-nuclear-plant-cost-overruns-highlight-risk-centralized-climate-solutions/) Furthermore, it is an industry norm for nuclear plant extensions to cost far more than the numbers Xcel initially estimates. There is a huge opportunity cost involved where these are essentially public funds that could otherwise be spent on cheaper, clean, and safe energy solutions.

From a lifecycle analysis, only ~8% of uranium mined to use in making nuclear energy comes from inside the US. Both in the US and globally. Indigenous communities bear the disproportionate burden of that mining - from the Cree nation in current-day Canada; to the Havasupai and Dine nations in current-day southwestern US and the Oceti Sakowin nations near the Black Hills of the US; to the multiple Aboriginal tribes in current-day Australia. Once it is brought to Minnesota and used up in the making of electricity at the two nuclear plants - in Monticello and Red Wing, Minnesota - the radioactive waste is brought to be stored 600 yards from one of the smallest Dakota reservations in Minnesota, Prairie Island Indian Community. This has been un-consensual since the arrangement was proposed in the 1970s. (http://prairieisland.org/policy-positions/nuclear-positions/#squelch-taas-accordion-shortcode-content-0) There is a possibility on how we can save money, dramatically decrease emissions and avoid any more nuclear with the "Clean Energy For All Plan" from Sierra Club Saves $2.2 Billion and Reduces Carbon Emissions 90% by 2030 without nuclear. (https://www.sierraclub.org/press-releases/2021/02/sierra-club-proposes-alternative-xcel-resource-plan )

What components does the Clean Energy for All plan involve and to what extent is it reflected in what Xcel is offering?

To revisit an earlier point, Xcel being very selective with their modeling could lead the company directly to stranded assets. In Xcel's previous plan from last year, their modeling treated renewables and energy storage (like batteries) as an "either/or" not a "both/and," which ignores the basic resiliency and reliability when the two in fact amplify and strengthen each other! But to Xcel’s credit, there are now 250 MW of Energy Storage in their new revised plan. Xcel’s previous Supplement had 150 MW of storage, in the later years (2032-2034), so this is a 100 MW increase, and they'll add it sooner (2030-2031). This is the first time that Xcel has revealed any plans for significant energy storage facilities in Minnesota. Energy Storage, most prominently in the form of batteries, is key to capturing electricity produced by wind and solar at times when generation is abundant and making it a dispatchable source of power like a gas or coal plant. Xcel was less clear on the details of their plans for energy storage other than saying battery deployment wouldn't begin until about 2030.

There is some substantial demand-side management in Xcel’s plan, including average annual energy efficiency savings of over 780 gigawatt hours. 

 In addition, there is more wind power with 2650 MW compared to 2250 MW in Xcel's previous submitted plan. Xcel also plans to build a $575 million solar plant in Becker, to take advantage of the existing transmission infrastructure built for the coal plants. For comparison, this would be four times larger than the state's current largest solar array.

One word of caution when it comes to overall numbers on renewable energy: Xcel currently buys energy from at least 2 trash burners - one in North Minneapolis and one in Red Wing - that provide smaller amounts of energy and are strongly opposed my many in the community. Xcel and other industry partners euphemistically lump trash burning in with renewables calling it "waste to energy" or "biomass." If you visit the Minneapolis-St. Paul airport, look for ad-campaign on the trash cans in the C-wing of the airport which makes trash look like solution!

Energy Efficiency is essential for reaching municipal and state goals for clean renewable energy (to avoid overbuilding). It is still the same as Xcel’s previous plan at 2-2.5% energy savings per year. It is important that investments in Xcel’s energy efficiency and customer-facing programs equitably reach historically marginalized communities and rental properties, along with implementing a planning process that is more transparent and inclusive for under-resourced individuals and groups who haven't traditionally been engaged in the past. For that purpose, inclusive financing (aka tariff-based on-bill-repayment for energy efficiency) is a proven way to help residents afford efficiency upgrades because it eliminates the significant and widespread financial barriers of credit score and upfront cost to participate in energy efficiency improvements and clean energy. Xcel should agree to begin a full program, or at least start a pilot program, as part of its commitment to equity improvements.

Overall, given the above-mentioned promising possibilities, it does not make sense to invest hundreds of millions of customer dollars into fueling, constructing, and maintaining last century’s energy technology, particularly when we don’t have an energy democracy where ratepayers get to cast votes on utility bills. The commission’s resource planning process is the closest thing we have to it, so thank you for providing the opportunity and pace to comment.    

 

  • Lee Samelson
    published this page in Blog 2021-10-12 13:27:00 -0500

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