Xcel considers splitting off North Dakota operations
Xcel Energy has begun the process to separate its utility operations in North Dakota and Minnesota, E&E News reports, a reflection of the gap between the state’s energy policies and Xcel’s move toward wider use of renewable energy.
The advocacy staff of the North Dakota Public Service Commission is expected to submit testimony early next month on Xcel’s filing and rule on the issue by mid-2018.
If the separation does move forward, it could cost Xcel several million dollars and require multiple regulatory approvals that could take until 2020 to be finalized.
Differences between Minnesota and North Dakota’s energy policies have been around for about two decades but in recent years the gap has become more pronounced as Xcel implements its “Steel for fuel” strategy that calls for using more wind and solar power.
North Dakota regulators in 2016 denied cost recovery for an Xcel subsidiary's $250 million, 100 MW million Aurora solar project, putting a greater burden on ratepayers in other states or on the company itself.
In a filing with the North Dakota Public Service Commission, Northern States Power (NSP) said the difference between the two states’ policies had risen to become “material” from a financial standpoint and “unbridgeable” from a policy perspective.
In the filing, Xcel says it would prefer a solution in which the utility operations in the two states remain integrated, but says that North Dakota ratepayers would have to pay their “fair share” of costs as NSP and Xcel continues to evolve toward a cleaner generation portfolio.
NSP, one of the company’s four regulated utilities, is the largest utility in North Dakota but is a small part of Xcel’s overall system. North Dakota accounts for only 5% of Northern State’s load. Minnesota accounts for about 75% of NSP’s load. And North Dakota accounts for only about 1% of parent company Xcel’s balance sheet.
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