Prospects improve for Minnesota gas plant bill after groups drop opposition

Dive Brief:

  • Opposition to construction of a legislatively-mandated power plant is easing, with some customer advocates indicating they are not happy about the situation but believe the generation is needed.
  • Lawmakers in Minnesota's House and Senate proposed authorizing Xcel Energy to construct a gas-fired power plant in Sherburne County without going through review by the Public Utilities Commission. Some fear this would allow the utility to charge higher rates.
  • The Citizens Utility Board of Minnesota (CUB) opposed the bills initially, but now says it has won concessions from lawmakers. Midwest Energy News also reports the Minnesota Large Industrial Group no longer intends to testify against the bill. 

Dive Insight:

Changes to legislation allowing Xcel to construct a power plant have eased the concerns of not just customer advocates but also the state's Governor, who has indicated he will sign the bill if it arrives on his desk.

Gov. Mark Dayton issued a statement last week throwing support behind both energy regulators and the project. "I have very serious concerns about other proposals in the Legislature to weaken the Public Utilities Commission," he said. "However, in this instance, I believe that the critical importance of this project for Becker, the surrounding area, and our entire state, requires certainty that the protracted PUC review process cannot provide."

Among changes to the legislation, CUB said there will now be a rate case associated with the project, "where Xcel will make the case that it should pass along construction costs (and its rate of return) to its customers."

While CUB says it believes the PUC should review the costs, "decisions about specific utility investments like this are complicated," the Minnesota chapter wrote on its web site. "While CUB does not support legislating the construction of a new power plant, we were able to win important provisions that should help protect consumers in this instance."

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.

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Filed Under: Generation Regulation & Policy
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