Looking ahead, Xcel Energy should investigate diversification


Much has been made about the decrease in demand for coal in the U.S. over the last couple years (I wrote a recent post about it here), and data released by the Energy Information Administration (EIA) shows that coal’s percentage of total U.S. electricity generation dropped to 34% in March of this year. That’s the lowest percentage since at least January of 1973, when the agency started collecting monthly energy generation statistics.

Two years ago, three major Minnesota utilities filed their mandatory Integrated Resource Plans to the Minnesota Public Utilities Commission (MPUC). These plans laid out the potential resources that the utilities intend to use through 2025 to meet customer energy demands.

As part of its approval for the plans, the MPUC required two of these utilities, Minnesota Power and Ottertail Power, to submit “baseload diversification studies” to examine a multitude of future alternatives for energy generation (see a summary of Minnesota Power’s report here). The MPUC, however, did not require Xcel Energy to conduct and submit a similar study, even though it is Minnesota’s largest utility and operates by far the largest coal-fired power plant in the state at the Sherburne County Generating Station (Sherco).

In response to this, four Minnesota environmental groups have filed detailed comments to the MPUC requesting that Xcel be required to submit a baseload diversification study. The groups say that the utility’s long term resource plan relies too much on its coal plants, and has not properly investigated the possibility of replacing old plants with renewable energy sources and energy efficiency gains.

In particular, Xcel’s current Integrated Resource Plan draws on the Sherco 1 and Sherco 2 coal-fired units beyond when they will be forced to comply with stricter regulations from the EPA. The plan does not examine alternatives to costly environmental upgrades to these units using renewable energy sources and conservation measures, as required by state law.

Xcel Energy has converted some of its coal-fired turbines to natural gas or heat recovery generators in the past, renewable energy sources are becoming more economically viable to implement here in Minnesota, and conservation efforts across the state have helped keep electricity demand in check. A baseload diversification study would not mandate any action by Xcel and would not force any plant shutdowns, but knowing how we can better adapt our energy generation sources in a time when the previous generation paradigm (ie, coal) is being shaken up can only benefit our state’s energy outlook moving forward.

The MPUC should take advantage of this opportunity to investigate how we can improve our energy generation infrastructure.