Replacing Minnesota coal plants includes an efficiency push

Published 7:53 am Thursday, June 27, 2019

ST. PAUL — As Xcel Energy prepares a filing to close its last coal units in Minnesota, a lesser-known provision of the settlement announced in May commits the utility to energy savings equivalent to another power plant.

The agreement with clean energy organizations and a labor union signed in early May requires Xcel to close the last two coal plants it operates in Minnesota, the Allen S. King facility in Stillwater and Sherburne County Generating Station (Sherco) Unit 3. In addition, the utility committed to building 3,000 megawatts of solar energy.

Fresh Energy, which publishes the Energy News Network, is one of the parties to the agreement.

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Clean energy organizations, in return, will support the utility’s acquisition of a natural gas plant in Mankato and at least some cost recovery on the coal facilities. The points reached in the agreement will be incorporated into the utility’s integrated resource plan that will be presented July 1 to the Public Utilities Commission.The efficiency goal — to be delivered next year as part of Xcel’s integrated resource plan — calls for reducing demand by as much as 830 megawatts, said Mike Bull, director of policy and external affairs for the Center for Energy and Environment.

“It’s really historic in what Xcel’s agreed to do with efficiency in its resource planning,” he said. “It has never been done in Minnesota, and I don’t know of any place in the country where it’s being done on this scale, either.”

Trading a natural gas plant for more solar and efficiency investments created a bargain acceptable to most clean energy organizations, which routinely question the wisdom of any further investments in fossil fuel infrastructure as the impacts of climate change are increasingly felt.

While advisory in nature, the agreement is expected to have some influence as regulators begin analyzing Xcel’s resource plan.

But a handful of critics in the clean energy field argue the Mankato Energy Center, a natural gas plant that Xcel agreed to purchase last year, is too expensive and may become a stranded asset and that the agreement was unnecessary.