Coal Retirements, Historic Clean Energy Commitments & A New Fracked Gas Plant
Last week Xcel Energy and Sierra Club made big headlines with an agreement that included an announcement that Xcel was going coal-free by 2030. On the same day Xcel shared a preview of its IRP (Integrated Resource Plan, a 15-year, long-term energy plan) with stakeholders that included a new fracked gas plant in Becker and a life extension request for its Monticello nuclear plant.
That’s a lot of big news for one week. So let’s dig into the details.
What is an IRP and why does it matter?
Every 2-3 years, all utilities are required to put together a plan that outlines how they will meet their customers’ energy needs for the next 15 years. This integrated resource plan, or IRP, must then be approved by the Minnesota Public Utilities Commission (PUC), the government agency that oversees utilities. Xcel’s 15-year resource plan is due to the PUC on July 1st. The PUC will review the plan to determine if Xcel’s plan meets its customers’ needs while ensuring reliable, low cost electricity.
Xcel Energy is Minnesota’s largest electric utility, and the resource planning process gives customers the opportunity to call on Xcel to reduce carbon pollution, protect our air and water, and advance an equitable clean energy economy while providing affordable, reliable energy to customers.
What has Sierra Club been asking Xcel out of its IRP?
Minnesotans want to see a path to 100% clean, renewable energy in Minnesota and have been calling on Xcel Energy to help us get there.
Minnesota Smarter Grid Study showed that Minnesota could meet its carbon reduction goals by retiring coal plants and nuclear plants and not building any new fracked gas plants - and still provide reliable power and save customers money. Xcel itself has made a commitment to 100% carbon-free energy by 2050.
So for the last year, we’ve been asking Xcel to include in its plan:
- Articulate a Path to 100% Renewable Energy: Xcel Energy must retire its remaining dirty coal burning power plants (Allen S. King & Sherco 3) by 2030 and replace them with renewable energy and energy conservation and not new fracked gas.
- Ensure Community & Worker Transition: Xcel Energy must develop transition plans with communities and workers to ensure they are kept whole and support economic diversification in plant retirement communities that doesn’t include new polluting industry.
- Ensure Equitable Access to All of Clean Energy’s Benefits: Clean energy growth must be designed to create fair access to jobs and economic development opportunities, support individual, community-based, and customer-sited clean energy models in addition to utility-scale clean energy, and ensure the low cost benefits of clean energy are first allocated to low-income customers to keep bills low.
- Strong Plan for Transit Electrification: Xcel must develop a plan for a future with high electrification of cars, public transit, buses and trucks
What was part of Monday’s agreement?
On Monday, May 20th, Sierra Club, Fresh Energy, Union of Concerned Scientists, Center for Energy and Environment, Minnesota Center for Environmental Advocacy, Clean Grid Alliance, LIUNA (Laborers’ International Union of North America) Minnesota and North Dakota, and Xcel Energy filed an agreement with the Minnesota Public Utilities Commission (MNPUC).
The agreement proposes a set of things that Xcel commits to including in its IRP
(full agreement text here):
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The retirement of the King coal plant no later than 2028,
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The retirement of the Sherco 3 coal plant no later than 2030,
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A commitment to historic levels of energy efficiency,
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The addition of at least 3,000 MW of solar capacity to Xcel’s system by 2030, enough to power over 750,000 homes,
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The support of acquiring new solar through a competitive bidding process approved or established by the MN PUC that gives preference to proposals that maximize the creation of high-quality construction employment opportunities for local workers and creation of local, high quality jobs in these solar projects and allows for 50% ownership of solar by Xcel if it will result in customer benefits, and
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The reduction of coal use at the Sherco 2 coal unit through seasonal operations of the plant until it retires in 2023
The agreement was entered into as part of Xcel’s application to purchase the Mankato Energy Center (MEC) fracked gas-fired power plant, and is subject to MNPUC approval. Sierra Club agreed to withdraw its official comments filed in opposition to Xcel’s purchase of the plant and other parties in the agreement agreed to support the purchase. Xcel is already locked into the purchase of 100% of the electricity from the Mankato plant through long-term contracts. The agreement also includes a commitment from Xcel to continue to periodically reevaluate the economics of the Mankato gas plant.
The proposed Mankato gas plant purchase is part of an open docket in front of the MN PUC, who will approve or reject the proposal once the public comment period has concluded in June.
What’s in Xcel’s draft preferred plan?
All of the elements of the Mankato settlement, summarized above, are included in Xcel’s draft preferred plan. But Xcel’s proposed plan also included lots of other elements that the parties to the settlement haven’t agreed to. The parties to the agreement, including Sierra Club, can still hold different positions on all other elements of Xcel’s proposed plan.
So, what else is in there?
We’ve only seen a slideshow presentation of a draft preferred plan, so the details aren’t all there, and we haven’t had a chance yet to “look under the hood” of Xcel’s analysis. But here’s the good, the bad, and the incomplete of a few of the big picture items Sierra Club cares about:
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Articulate a Path to 100% Renewable Energy
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The good: Coal retirements before 2030, historic levels of energy efficiency, over 4000 MW of new solar resources!
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The bad: Xcel plans to build a huge new fracked gas plant in Becker in 2026 and extend the life of the Monticello nuclear plant from 2030 to 2040 instead of articulating a path to 100% renewable energy. And Xcel CEO Ben Fowke told the MN PUC this week that they expect to add more gas in the future.
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Ensure Community & Worker Transition
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The incomplete: While Xcel has been engaging with stakeholders and is part of a socioeconomic impact study of plant communities expected later this year, there was no mention of community & worker and transition the preview.
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Ensure Equitable Access to All of Clean Energy’s Benefits:
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The bad: Xcel assumes a very small amount of customer-sited clean energy and community solar in its plan, despite the popularity and widespread support for Xcel’s community solar program and industry in MN.
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The incomplete: Xcel’s preview does not include any commitments to including underserved communities in the economic benefits of clean energy.
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Strong Plan for Transit Electrification: Xcel must develop a plan for a future with high electrification of cars, public transit, buses and trucks
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The incomplete: While we know Xcel has been supporting transit electrification in Minnesota with new pilots, it is not clear yet whether they are planning for a future with high electrification of transit.
Overall, Xcel’s commitment to retire its remaining coal plants is a critical first step on a path to 100% clean, renewable energy, but it’s plan to build a new fracked gas plant in Becker takes us backwards. And we still need to see Xcel’s plan on community transition, equitable access to clean energy and transit electrification.
What happens next?
Between now and July 1st, we’ll be calling on Xcel Energy to update its draft with a plan that does not include building a new fracked gas plant and supports all Minnesotans in a transition away from fossil fuels to 100% clean, renewable energy.
Once the full IRP is filed on July 1st, the MN PUC will begin a process for public and stakeholder engagement. Stay tuned!