Cutting Carbon and Increasing Savings: A Win-Win for Minnesotans

Fresh Energy’s work to cut carbon pollution in Minnesota started strong in 2020, with exciting results from more than a year of effort by our energy markets team.

Allen S. King Generating Station, photo by Xcel Energy

Xcel Energy has announced that it will change how it operates two of their Minnesota coal plants throughout the year, which projects to result in a 60% reduction in carbon emissions and millions of dollars in savings for customers. Closing coal plants and replacing them with renewables, efficiency, and other clean energy is a core goal for Fresh Energy —and running coal plants less in the near-term demonstrates significant progress.

Specifically, Xcel plans to idle its Allen S. King and Sherco 2 coal plants in Bayport and Becker, respectively, for six months a year and only run them only during high electricity use times the remainder of the year. Not only that, Xcel is considering changing the way it operates its 11 other coal plants across the country. With this proposal, Xcel is positioning itself as an industry leader in the Midwest and across the country as the electricity sector transitions away from coal.

Sherco Generating Station, photo by Xcel Energy

“Xcel’s plan demonstrates how utilities can have an impact on carbon emissions immediately, even before their coal plants are scheduled to retire. Best of all, Xcel’s proposal is a win for carbon reductions and consumers’ bottom lines,” says Allen Gleckner, senior director of energy markets and regulatory affairs. “It was a rewarding culmination of hundreds of hours the Fresh Energy energy markets team spent over the past eighteen months working with utilities and other stakeholders and providing in-depth analysis and advocacy at the Public Utilities Commission.”

Let’s take a closer look at Xcel’s announcement. In projections Xcel provided with its plan to change coal plant operations, it forecasts that carbon emissions will drop between 46% – 81% annually—the equivalent of the yearly emissions from well over a million cars. The move will also save $87 to $130 million.  The savings will take the form of both immediate fuel and operations savings of $8.5 to $28 million per year and $50 million in longer-term savings from reductions in maintenance and future plant investment. Xcel customers will notice these savings when they look at their bills, both in the near-term and over the next eight years.

While this is great news, the icing on the cake is that Xcel’s change in coal plant operations is largely replicable across Minnesota, the Midwest, and the country. In fact, we’re already seeing news articles pop up questioning coal plant practices in other states, as well as inquiries by utilities, regulators, and stakeholders throughout the Midwest.  We see this as a big first step in a much larger process. In March 2020, other Minnesota utilities will file details on their coal plant operations with the Public Utilities Commission and Fresh Energy is committed to continuing to lead on data analysis and regulatory advocacy throughout the summer with the goal of  reducing coal plant operations in other Minnesota coal plants, that will result in even deeper carbon and consumer savings. We’ll keep you posted as we learn more.

In addition to all of this, Xcel is in the process working on its Integrated Resource Plan which will outline its proposed investments in electricity generation over the next 15 years, including transitioning away from coal completely. Xcel will release its updated draft plan in April at which point we’ll do a deep dive into the fine print and will encourage folks to weigh in on that plan during the public comment period that will run through October.

The clean energy market is moving fast and undergoing lots of change. Stay tuned to Fresh Energy’s Clean Power blog, Facebook, and Twitter for the latest news. And subscribe to “Decarbonize,” our new podcast! Find it online here or on major podcast providers including Apple Podcasts, Spotify, and more.

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