Xcel ready to pare back on fossil fuel

Xcel Energy told Minnesota regulators Friday that it plans to markedly cut greenhouse gas emissions through conservation, efficiency and renewable energy initiatives.

In its latest two-year "resource plan," Minnesota's largest utility said it embraces the recent law mandating that it buy or produce 30 percent of its electricity from alternatives to fossil fuels.

"Our plan would reduce carbon dioxide emissions by 22 percent from 2005 levels by 2020, a 6 million-ton reduction, while pursuing the lowest-cost expansion path, meeting increased customer needs and maintaining system reliability," said Dave Sparby, CEO of Xcel's Northern States Power unit that serves Minnesota.

The plan also projects a 1 percent annual increase in electricity demand. At the same time, the company has pledged to achieve an annual reduction of up to 1.5 percent in retail electricity sales as required by a state law that takes effect in 2010.

Xcel's plan also calls for extending the operating license of the Prairie Island nuclear plant's two units for operation through 2033 and 2034, expanding capacity at Prairie Island by 160 megawatts and the Monticello nuclear plant by 71 megawatts. Xcel said re-licensing and continued operation of "our nuclear fleet will save customers approximately $1.1 billion over the 20-year license extension period" compared with other alternatives. The Monticello plant's operating license already has been extended through 2030.

Despite a futile national search for a permanent national waste site for spent fuel, nuclear power increasingly is being regarded as a clean-burning alternative to fossil-fuel-powered plants. Oil and coal-fired plants emit carbon dioxide, the leading contributor to greenhouse gases and global warming.

Ironically, it was a 1994 legislative deal to expand "temporary storage" for waste at Prairie Island that got Xcel into the wind-power business. Now the utility is the nation's biggest peddler of wind from Minnesota's blustery southwest quadrant and the Great Plains states.

Bill Grant, Midwest director of the Izaak Walton League, a conservation group, congratulated Xcel for embracing wind and other alternatives, as well as for a stepped-up emphasis on efficiency.

The company plans an upgrade at the Sherco coal-fired plant in Becker, Minn., that will expand capacity by up to 115 megawatts, enough to light 100,000 homes, at the same time environmental upgrades will cut pollution.

The plan, updated and presented every two years for review and approval by the Minnesota Public Utilities Commission, is subject to modification as new technology, consumer demand and fuel prices dictate.

Xcel earlier said it will not build another coal-fired plant until national carbon limits are in place or until the development of promising "clean-coal" technologies is commercialized.