The Minnesota House committee on energy overwhelmingly passed a bill late Tuesday that would allow Xcel Energy to build a large natural-gas fired power plant in Sherburne County without the approval of state utility regulators, the normal route.
Minneapolis-based Xcel wants to build a 786-megawatt gas-fired plant to replace two 680-megawatt coal-fired generators — Sherco 1 and Sherco 2 — that are planned to close in 2023 and 2026. The $800 million gas plant would be on the same site in Becker as the coal generators, and would open around 2025.
Xcel has a proposal for the plant pending before the Minnesota Public Utilities Commission (PUC), but the PUC — while not necessarily averse to the gas generator — put it on hold in October, asking Xcel to further study renewable energy alternatives.
Xcel “needs some certainty at this point in time,” Rick Evans, the company’s director of regional government affairs, told the Committee on Job Growth and Energy Affordability and Finance. Though seeking legislative approval, the PUC would still review “every dime” of expenses for the plant, he said.
J. Drake Hamilton, science policy director for the renewable energy group Fresh Energy, told the committee that Xcel — by going to the Legislature — is trying to “short circuit” the PUC. “The means to determine the best ways to replace Sherco 1 and 2 are already in place,” she said, referring to the PUC’s decision in October.
Andrew Moratzka, an attorney representing large industrial power users in Minnesota, also spoke against the bill. Bypassing the PUC, he told the committee, “is a detriment to all utility rate payers large and small.”
The PUC determined there is indeed a need for 750 megawatts of new power generation coinciding with the closures of Sherco 1 and 2. But the PUC found that it was “premature” to determine the fuel type and location of any new power-generating capacity.
The PUC concluded that Xcel had “adequate time” to evaluate all options without jeopardizing the feasibility of its gas-fired plant. The commission also told Xcel to come up with a more precise long-term energy demand forecast.
Jim Newberger, R-Becker, told the house committee he believes the PUC didn’t fully consider the economic impact of the Sherco closure. The coal-fired power complex in Becker is Sherburne County’s largest taxpayer, and Xcel employs about 300. The new gas plant would employ only 150, though Xcel has committed to finding the remaining workers other jobs, Newberger said.
The House committee voted 16-3 in favor of the bill, with the “no” votes coming from three of nine DFL members. The bill will go to the house floor.