Xcel revives Minneapolis 'resilience hubs' idea with federal funding

Xcel Energy could build three "resilience hubs" in Minneapolis after all, reviving a potential environmental justice initiative after the utility was criticized by state regulators for scuttling the plan earlier this year.

The project — which included rooftop solar and battery storage systems at three sites in the city that could provide backup power during outages, and other benefits — was halted in June because of price overruns, but is now re-emerging with an infusion of federal money.

The Minnesota Public Utilities Commission (PUC) in 2022 had initially agreed to let Minneapolis-based Xcel use $9 million in ratepayer money for the project, but the price tag ballooned to $17.7 million because of inflation and other costs. The decision to scrub the project came shortly after the PUC allowed Xcel to increase rates by only 9%, significantly less than what the utility wanted.

Xcel was blasted in August by some on the commission for backtracking on this community investment as well as its decision to withdraw a $330 million electric vehicle charging program.

On Oct. 18, however, Xcel said it was awarded $100 million from the U.S. Department of Energy (DOE), including $9 million for "microgrids in BIPOC communities in Minnesota." That could pair with $9 million approved by state regulators for the resilience project.

Xcel said in a letter it must work out details of the federal grants so the project may not precisely match the original proposal. The utility planned for resilience hubs at three locations: Sabathani Community Center, the Minneapolis American Indian Center and at three buildings that are close to each other in north Minneapolis, including the Minneapolis Public Schools Nutrition Center.

The infrastructure would operate separate from the larger power grid to provide backup power for critical services during an outage. Xcel said the project would carry other benefits, like job training and job creation.

In a report filed with the PUC last year, the utility said the project gives Xcel an opportunity to test new technologies to "support resilience for vulnerability communities in times of crisis."

Xcel added the project would enable it "to work hand-in-hand with our BIPOC community partners, deepening our relationship and understanding of their energy priorities and needs in ways that support much broader goals to advance equity in the clean energy transition."