Xcel Energy is exploring renewable natural gas, making it the state's second big utility to pursue extracting energy from livestock manure, landfills and water treatment refuse.
Minneapolis-based Xcel Tuesday said it is looking at sources of renewable gas with the idea of eventually offering it to customers.
"This is a big information and data gathering exercise at this point," said Jeff Lyng, Xcel's director of energy and environmental policy. "We have to better understand the opportunities."
Xcel expects to bring a renewable gas plan before Minnesota utility regulators late this year or in 2021.
Xcel will gauge customer demand for renewable gas in the coming months. Customer participation would be voluntary and not subsidized by other ratepayers.
But there's likely to be a premium for renewable gas (RNG). Its costs more to produce and deliver than fossil-fuel gas, which is near historically low prices.
CenterPoint Energy, Minnesota's largest natural gas utility, has already proposed a renewable natural gas pilot program, but it was unanimously rejected last year by the Minnesota Public Utilities Commission (PUC).
The high cost of RNG, even if purchased voluntarily, was one of the PUC's concerns. Regulators also had questions about the transparency of renewable natural gas procurement and out-of-state gas sourcing.
