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ALJ: Xcel Should Seek Minnesota Solar, Rather Than NatGas, Generation

Xcel Energy's plans to increase electricity generation in Minnesota should rely on solar power rather than natural gas, according to an administrative law judge (ALJ) tasked with reviewing the issue.

The Minnesota Public Utilities Commission (PUC) concluded in March 2013 that Xcel had demonstrated a need for an additional 150 MW of electricity generation by 2017 and 500 MW by 2019. Xcel's proposal involved replacing some existing coal-fired electric generation units and adding up to three gas-fired peakers (see Daily GPI, April 17, 2013).

The PUC accepted three proposals for gas-fired generation, including one from Xcel, a proposal from Geronimo Wind Energy for a 100 MW distributed solar capacity intermittent resource, and a proposal from Great River Energy (GRE) to sell capacity credits. Xcel proposed first to place a 215 MW combustion turbine in service in 2017 at its Black Dog plant in Burnsville, MN, replacing the plant's coal-fired capacity, which is scheduled to be retired in 2015. Two other new 215 MW gas-fired turbines were slated for Hankinson, ND, to be placed in service separately in 2018 and 2019.

Combining the Geronimo and GRE proposals "represents the most reasonable and prudent alternative to meet Xcel's near-term needs," ALJ Eric Lipman said in findings released Tuesday. He recommended that the PUC select "scalable projects that meet Xcel's near-term shortfalls and...conduct a second procurement for needs which may occur after 2019."

An Xcel spokesman said the company plans to file comments on the report this month.

"We appreciate the work of the ALJ in development of the record in the resource acquisition proceeding," the spokesman told NGI. "We disagree, however, with some of the findings and recommendation adopted by the judge. We will file a complete response to the report at the time exceptions are filed with the commission."

Lipman said he took into account a change to Minnesota state code adopted last year "that obliges Xcel (and other utilities) to acquire 1.5% of its retail sales from solar energy by 2020." That requirement is in addition to existing law that requires Xcel to provide 30% of its retail energy needs through renewables.

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