Xcel Sherco Gas Plant Bill becomes State Law: Betrayal at the Capitol

When have we ever seen a rare coalition of environmental groups, low income consumer advocates, big industrial energy users, free market research groups, and faith communities join together? All came out earlier this year against a bill which gives the “regulated” monopoly Xcel energy the ‘sole discretion’ on whether it builds its Natural Gas plant in Becker, thus removing the usual authority of State Regulators to make the final approval for Xcel. This is a significant regulatory workaround in terms of expense. Xcel’s costs estimate for the project are $800 million to remodel the Sherco Coal unit into a Natural Gas Generator and $200 million to build a gas line, all of these costs which will all to be passed onto Xcel customers like you and me.

      This move is no surprise to Community Power who has organized community education sessions on the energy utility system. The way which utilities expand their profit base is by getting big power plant and power line infrastructure projects approved by regulators. The reason is because their “captive customers” who have no other options in where to buy energy from, are considered legally on the hook to pay off the energy monopoly’s big infrastructure investments over a multitude of years, even if the infrastructure is not needed.

Xcel Energy can argue convincingly that it needs a natural gas generator to provide a flexible baseload power supply to the transmission corridor if they also decide to retire their nuclear plants in the 2030’s but that is beside the point.  

The point is that Xcel has upended a decades-long social contract that State Regulators are to determine whether a utility’s investments are in the public interest, the most cost-effective option or necessary in the first place.

Instead of simply giving their usual rubber stamp to Xcel’s proposal last fall, the MN PUC ordered Xcel to first study demand response, microgrids, and to coming up with more honest projections on future consumer energy use before approving their natural gas facility in Becker.

The “regulated” monopoly Xcel Energy decided to change the rules of the game when the PUC asked for more transparency and more honest studies as opposed to their typical rubber stamp in approving what utilities ask for.  

Now that the bill has become law, the practical consequences are that Xcel no longer has to evaluate whether non-natural gas renewables could be used to fill coal’s void or to demonstrate that natural gas is more cost effective than alternatives.

Legislative backers as well as Governor Dayton approved the bill on the pretext that it brings “immediate certainty” to the current coal plant workers in Becker

The same State legislators who pushed this bill thorough by granting so many emotional and sentimental appeals on certainty for 150 traditional power plant jobs, (even though the deal cost $40 Million per job!) have been brazenly callous and disrespectful to the job certainty of workers in Minnesota’s growing and promising solar industry by supporting bills like Senate File 141 and Senate File 214. 

Growing solar companies like All Energy Solar have already expended hundreds of thousands in advertising on behalf of the Made in Minnesota Solar Incentives. Those same state legislators pushing for  SF214 to pull the rug out from under the incentives are showing no respect for the certainty of their business deals. 

In addition, SF141 fits in with the theme being anti-truth, anti-study, anti-oversight, anti-accountability as Xcel’s Sherco Gas bill.

Their most significant solar rollback from the 2015 legislative session was allowing Muni and Co-Op utilities to issue punitive monthly fees on solar customers who pose competition with the utilities. But when these utilities could not justify or defend the punitive fees under the scrutiny of the PUC, they retaliated with their own regulatory workaround at the state legislature. And now they are pushing for SF141 to strip the Public Utilities Commission of its authority to protect Co-op and Muni solar customers.

Read more about such rollback efforts in an excellent article here:


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