Missed opportunity for clean energy as gas plant bill moves forward

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Left to right: Clean energy advocates Kevin Reuther of Minnesota Center for Environmental Advocacy, J. Drake Hamilton of Fresh Energy, Jessica Tritsch of Sierra Club, and Leigh Currie of Minnesota Center for Environmental Advocacy on a tour of Sherco.

Today, Governor Dayton signed a bill into law that allows Xcel Energy to build a natural gas plant in Becker, Minnesota.

  • The plant will be built as a partial replacement for a coal unit that will be retired in 2026, nearly 10 years from now.
  • In response to concerns around ratepayers, the final bill has some modest provisions that help protect Xcel customers by not guaranteeing rate recovery.
  • Though Fresh Energy believes that the bill is a missed opportunity to pursue even greater investments in local clean energy sources like wind, solar, and energy efficiency, we are hopeful that Xcel Energy will bring plans for the proposed plant to the Minnesota Public Utilities Commission for careful review.

This law comes on the heels of an historic victory for clean energy in October 2016 when, after nearly five years of data-driven analysis, Fresh Energy and our partners were successful in winning state approval of Xcel Energy’s proposal to retire the Sherco 1 and 2 coal-burning power plants – together the largest source of global warming pollution in Minnesota. Regulators at the Public Utilities Commission also required that Xcel procure 1,400 megawatts of new solar energy and 1,800 megawatts of new wind energy, as well energy efficiency that would equal more than 444 gigawatt hours per year (the equivalent of more than 1.5 percent annual savings). Ultimately, the advocacy by Fresh Energy and our allies helped bring a clear victory: Xcel Energy is now on a path to achieve a nation-leading 60 percent reduction in greenhouse gas emissions by 2030.

There is one more planning cycle through the Public Utilities Commission before Xcel starts construction on any gas plant – their 2019 Integrated Resource Plan. It is very likely that in that proceeding, the Public Utilities Commission will either find the need for a smaller plant than what Xcel has suggested or will require additional coal plant retirements as a result of the proposed gas plant. Our analysis through the resource planning process at the Public Utilities Commission showed that the need for a 786 megawatt gas plant had not been proven. As Xcel Energy moves forward under this new law, we will continue to work to ensure that any energy resources be cost effective and prudent.

By 2019, the Public Utilities Commission has required Xcel to examine scenarios for retiring four major power plants units – Xcel’s largest coal plant unit, Sherco 3, two large nuclear plants (1400 MW + 800 MW), and the 500 megawatt A.S. King plant in Oak Park Heights. The legislation passed this session does nothing to alter that vital planning for orderly, low cost transitions from conventional electricity to a modern portfolio. The state has many opportunities for achieving least-cost, deep carbon reductions as examines each monopoly utility’s 15-year business plans.

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