Xcel Energy ranks third among mid-America utilities that have sold expensive coal-fired power into the electric grid when cheaper renewable and natural gas power was available, costing ratepayers millions of dollars, according to a new study.
Xcel, Minnesota's largest electric utility with 1.1 million customers, disputed the study's findings.
The study by the Union of Concerned Scientists (UCS), which used 2018 data, notes steps taken by Xcel earlier this year to run two of its four Minnesota coal plants on a part-time basis, saving money for ratepayers and reducing carbon emissions.
The study released this week looks at the issue of "must-run" status for coal-fired power plants. Such plants get dispatched to provide electricity in wholesale electricity markets, sometimes when wind and gas-fired power are cheaper.
"The value of the study is that we quantify the costs to consumers," said Joe Daniel, senior energy analyst at UCS and co-author of the report.
In wholesale power markets, electricity is generally dispatched based on variable costs. Wind is free fuel, and the number of wind farms has mushroomed over the past decade, boosted by federal tax credits and falling equipment costs.
At the same time, natural-gas-fired plants have increasingly displaced coal power, too. They are cheaper to operate, and natural gas emits half the carbon dioxide that coal does.
Regional grid operators often allow coal plants to "self-commit" to wholesale markets and run continuously. This must-run practice leads to the unneeded dispatch of costlier power that is passed down to consumers through fuel clause charges on their bills, the UCS study said.
