They say Geronimo Energy’s judge-approved proposal won’t meet growing demand.
State energy officials and power companies tried Tuesday to derail a proposed $250 million solar energy project designed to meet future electricity needs of Xcel Energy Inc. customers in Minnesota.
In regulatory filings, the Minnesota Commerce Department, Xcel and two other companies that want to build natural gas power plants urged state regulators to reject Edina-based Geronimo Energy’s plans to build approximately 20 large solar power arrays across Minnesota.
In an unprecedented ruling three weeks ago, state Administrative Law Judge Eric Lipman examined the arguments for solar power vs. natural gas generation and concluded that solar would be a better deal. He recommended that the state Public Utilities Commission approve the Geronimo solar project.
The commission is not required to follow Lipman’s recommendations, and in regulatory filings on Tuesday, the other companies said it shouldn’t.
The critics of Lipman’s solar recommendation, including the state agency, contend he assumed electrical demand would grow slower than once projected. Xcel and the state Commerce Department said that when the prospect of higher growth is factored in, solar doesn’t measure up.
“We really think that [he] relied on an untested and unusually low forecast for future sales growth and he really didn’t consider what would happen if the economy recovers as we expect it to,” said Bill Grant, deputy commissioner for energy programs at the Commerce Department.
Betsy Engelking, a vice president for Geronimo, said that’s not a new argument. “They are arguments that were thoroughly considered … and rejected,” she said. “Now they are taking another shot.”
The competition between solar and natural gas has put state energy officials and regulators in an unusual spot.
Utility commissioners often take the advice of the Commerce Department, whose energy expertise is widely admired. Yet it would be unusual for the five-member PUC to completely ignore the recommendations of a judge who spent months reviewing the competing bids.
The Commerce Department also has been a supporter of solar energy. It backed the 2013 state law requiring investor-owned utilities like Xcel to generate 1.5 percent of their power from the sun by 2020.
“We are not saying no to solar,” Grant said in an interview. Instead, his department wants the PUC to order a separate competition in which Geronimo’s massive project would compete against other solar projects to meet Xcel’s 1.5 percent mandate.
Solar supporters have been disappointed by state energy officials’ position.
“They have a mandate to promote renewables,” said Kevin Reuther, legal director for the nonprofit Minnesota Center for Environmental Advocacy in St. Paul. “They should be a champion for wind and solar.”
Minneapolis-based Xcel, the state’s largest power company with 1.2 million Minnesota customers, wants to build a natural gas-burning generator at its Black Dog power plant in Burnsville, where it is retiring its last coal-fired units. Xcel also supports negotiating a deal to purchase additional power from a second natural gas unit that would be built by another company.
Two companies are competing for that business opportunity. Invenergy Thermal Development of Chicago has proposed a new natural gas generating unit in Cannon Falls and Calpine of Houston has proposed adding a unit at its Mankato power plant. Invenergy and Calpine both took exception to the judge’s solar recommendation.
The solar vs. natural gas question hasn’t yet been scheduled for a vote by the commission, and that probably won’t happen for several weeks.
David Shaffer • 612-673-7090 Twitter: @ShafferStrib