Clean Energy Organizations join settlement on Xcel Energy’s Firm Dispatchable Resource Acquisition and Integrated Resource Plan which have long-term implications for the future of clean energy in Minnesota.
On October 2, 2024, Clean Grid Alliance, Fresh Energy, and Minnesota Center for Environmental Advocacy (collectively the Clean Energy Organizations or CEOs) joined a settlement with the Minnesota Department of Commerce, Xcel Energy, labor unions, and energy developers. The settlement agreement filed with the Minnesota Public Utilities Commission seeks to resolve both Xcel’s Firm Dispatchable Resource Acquisition docket (#23-212) and major issues in Xcel’s Integrated Resource Plan (IRP) docket (#24-67). Both dockets have long-term implications for the future of clean energy in Minnesota and Xcel Energy as it works toward a cleaner, more flexible energy system.
The settlement comes after the CEOs commented in both dockets, first successfully advocating that the Firm Dispatchable Resource Acquisition docket should be open not just to gas, but also to renewables and storage, and most recently by filing comments with extensive modeling and evaluation on Xcel’s IRP that found elements of Xcel’s plan could be changed to add more renewables and storage, as well as leveraging existing gas plants to greatly minimize the need for additional “peaking” natural gas plants. The settlement covers both dockets with agreement on many items.
From the Firm Dispatchable Resource Acquisition proceeding (#23-212), the settlement seeks approval of:
- More than 300 megawatts of new storage coming from two stand alone storage projects.
- 230 megawatts Wind + storage project. 170 megawatts Solar + storage project.
- Extension of two Power Purchase Agreements (PPAs) between Xcel and existing gas plants.
- A new “peaking” natural gas plant in Lyon County.
Notably, the settlement does not include selection of Xcel’s proposed second “peaking” natural gas plant in Fargo, N.D.
The settlement also resolves major issues from Xcel’s Integrated Resource Plan proceeding (#24-67) with parties agreeing to the following resource acquisitions in the 5-Year Action Plan, in addition to those above from the Firm Dispatchable docket:
- Adding 3,200 megawatts of wind through 2030, the majority of which will utilize the Minnesota Energy Connection transmission line.
- Adding 400 megawatts of solar through 2030.
- Adding 600 megawatts of standalone storage through 2030.
- Extending the Monticello Nuclear Generating Plant to 2050, and Prairie Island Generating Plant Units 1 and 2 to 2053 and 2054, respectively, for planning purposes.
In a significant shift from the original IRP submitted by Xcel, the settlement for the Resource Plan does not include approvals or acquisitions for any new natural gas plants beyond what was included in the settlement related to the firm dispatchable docket. The IRP Xcel submitted earlier this year was based on modeling that assumed the construction of 2,244 megawatts of new gas peaker capacity by 2030, which would require six or more new plants. Under this settlement agreement, Xcel would be authorized to move forward on only one new 374 MW natural gas peaking plant (Lyon County) and Xcel’s 5-Year Action Plan in its IRP would have no other new gas plants.
Additionally, through the settlement, Xcel committed to address the current very low participation in energy efficiency programs for the utilities’ lowest-income customers. The utility will also work with community, organized labor, and other stakeholders to expand career opportunities for groups underrepresented in energy employment through better data tracking and will report on the results in its next Integrated Resource Plan.
The utility also committed to filing a proposal for a new model of planned and scaled distributed solar and storage capacity procurement by October 3, 2025. Xcel will also explore options for a thermal battery with Rondo Energy, filing a pilot proposal by December 31, 2025.
The CEOs are pleased with the proposed settlement and are excited about green-lighting four new clean energy projects that stem from the Firm Dispatchable docket and are ready to be built, as well as the Resource Plan outcomes that align with the recommendations we put forth for thousands of megawatts of renewables storage, as well as leveraging existing resources.
The CEOs appreciate the work of the other parties involved in the settlement that helped achieve an outcome that resolves these major proceedings, balancing Minnesota’s current needs with an eye toward the future.
“This joint effort marks major progress in Xcel’s and Minnesota’s energy transition,“ said Allen Gleckner, Fresh Energy’s Executive Lead, Policy and Programs. “All the parties involved are working towards the same goal – reliably decarbonizing our state’s electricity. The outcome is a step in that journey that balances near-term needs while keeping on the path towards the future. Part of that future is making sure everyone shares in the benefits of the energy transition and the settlement includes a focus on energy efficiency investments for Xcel’s lowest-income customers which will reduce carbon while improving public health and energy burden, as well as developing data tracking aimed at achieving a much more diverse and local energy workforce.”
“This settlement agreement shows how partnerships truly build power,” said Peder Mewis, CGA Regional Policy Director. “The energy transition gets more complex by the day, but when a coalition of state agencies, labor unions, environmental groups, independent power producers and others come together in collaboration with a utility, great things can happen. In addition to the 3.6 gigawatts of new clean energy projects in the short term, we are very excited to see significant battery storage projects be selected. Storage is a real game-changer. Among other things, it will help during extreme weather conditions and is critical for maintaining reliability and meeting Minnesota’s clean energy standard. CGA looks forward to Minnesota utilities incorporating energy storage and getting to know its capabilities in the resource mix.”
“This is a great outcome for the climate,” said MCEA Climate Program Director Amelia Vohs. “It avoids the construction of multiple new fossil fuel gas plants and instead invests heavily in clean energy solutions. This will help both Xcel, and Minnesota, reach our emissions reductions goals.”
