Xcel Energy Inc. says it is negotiating with three energy developers to build large solar projects to comply with Minnesota’s mandate that investor-owned utilities get 1.5 percent of their power from the sun by 2020.
The Minneapolis-based power company didn’t disclose details, including the names of developers, but said in a regulatory filing that they are among 36 energy companies that proposed 111 large solar farms in response to Xcel’s request for bids. Xcel cited trade secrecy for not releasing details.
Xcel said the bid prices were “very competitive” and that 15 projects promised electricity at 8.5 cents per kilowatt hour or less. Xcel says that such projects, known as “utility-scale solar,” are the most cost-effective way to get electricity from the sun.
The utility also told state regulators in a letter this week that the new solar bids are “significantly less expensive” than a large solar project planned by Edina-based Geronimo Energy at locations across Xcel’s Minnesota service area. The state Public Utilities Commission in March directed Xcel to negotiate an agreement with Geronimo to build the $250 million Aurora project to serve the utility’s 1.2 million customers in the state.
But Xcel now is raising the prospect that it doesn’t need both the 100-megawatt Geronimo project and 100 megawatts of newly bid utility-scale solar farms to meet its 2020 solar goals. In a revision of its projections, Xcel said it needs 100 megawatts of utility-scale solar to comply with the mandate set by the 2013 state solar law. A megawatt is 1 million watts, enough to supply about 200 homes.
Besides building the big solar farms, Xcel also expects that consumer-developed solar projects, including rooftop systems and shared arrays known as community solar gardens, will add another 100 megawatts of sun-generated power to its Minnesota system by 2020, Jim Alders, Xcel’s strategy consultant on regulatory affairs, said in an interview.
Geronimo’s Aurora solar project was proposed before the state’s solar mandate passed. The project was designed to help Xcel meet peak power demand on hot summer days, and successfully competed in a separate bidding contest against natural gas generation, including an Xcel plan to expand its Black Dog power plant in Burnsville. The Geronimo solar project is designed with mechanically tilting panels to capture sun late in the afternoon when power demand spikes. To avoid building transmission lines, Geronimo chose locations for solar arrays near existing substations.
Xcel and some state officials had previously questioned the Geronimo project’s cost. Yet details about the costs, other than the overall price tag, have never been made public because they are treated as trade secrets. On Friday, Geronimo filed a motion with the PUC stating that Xcel violated trade secrecy protection by saying in the letter that the new solar bids were less than Geronimo’s price.
Betsy Engelking, a vice president for Geronimo, also said it’s unfair to compare the projected cost of the newly bid solar farms with the Geronimo project, whose other special features include a financial assurance to Xcel about delivering electricity when customer demand spikes.
“Xcel is trying to make comparisons between two different solar resources,” Engelking said in an interview. “They are trying to make comparisons that don’t exist.”
Xcel’s Alders said the utilities commission still must take a final vote on whether the Geronimo project is in the public interest, a decision that’s expected soon after the two companies complete deal negotiations. Xcel also is preparing updated projections about its peak-demand needs, he said.
“We wanted to alert the commission that we got this very competitive pricing information through the [bidding] process and make them aware of that as they approach the public interest determination,” Alders said.