Minnesota lawmakers seek to back Xcel's proposed gas plant in legislation

Dive Brief:

Lawmakers in Minnesota's House and Senate have proposed measures authorizing Xcel Energy to construct a gas-fired power plant in Sherburne County, possibly giving the company the ability to circumvent further deliberation by state regulators, the Minneapolis Star-Tribune reports.
In October, the state's Public Service Commission approved Xcel’s 15-year integrated resource plan, authorizing it to shutter two coal units totaling 1,362 MW at the Sherburne County plant.
Xcel wants to use a new gas unit to replace a portion of the lost capacity, but the Minneapolis Star-Tribune reports the PSC ordered a review of the cost of adding more renewable energy instead.

Dive Insight:

A bill proposed in both chambers has alarmed ratepayer advocates, who say it looks like an attempt to skirt regulatory approval of the proposed gas plant. Annie Levenson-Falk, who heads the Minnesota chapter of the Citizens Utility Board, told the news outlet it was "unusual, if not unprecedented."

The bill, Senate File 85, would authorize "a public utility may, at its sole discretion," to construct the proposed plant in Sherburne County, provided the utility already owns the land. The bill also states the plant will be constructed after Aug. 1, 2017, and it says the PSC "must approve recovery of costs associated with the construction and operation of a plant under this section."

Xcel's plan to shutter the Sherco coal plant, closing its units in 2023 and 2026, was unanimously approved and hailed by environmental groups. But how it plans to replace the power has come under scrutiny, with some saying the proposed gas capacity is unnecessary.

Xcel intends to replace the lost coal capacity with at least 1,000 MW of wind by 2019 and 650 MW of solar by 2021. Gas capacity would be added at the Sherco site, as well as another plant in Fargo in 2025.

Two years ago, Xcel generated 34% of its electricity in the Upper Midwest from coal, 15% from natural gas, 27% from nuclear and 24% from wind and other renewables. Gas has a continued place in the mix as a balancing fuel mix, but Xcel officials said last year that they do not it making up a significantly larger portion of their power mix.