MPUC Decision Spells End for Two Coal Units at Xcel’s Largest Plant

The Minnesota Public Utilities Commission (MPUC) voted unanimously to support Xcel Energy's latest long-range plan, which will transform the company's energy fleet.

Xcel expects to more than double its renewable energy portfolio as a result, delivering greater than 60% carbon-free energy to its Upper Midwest (Michigan, Minnesota, North Dakota, South Dakota, and Wisconsin) customers by 2030.

Coal-Fired Capacity Takes a Hit

The MPUC approval finalizes Xcel's decision to retire Units 1 and 2 at the Sherburne County Generating Plant (Sherco, Figure 1) in Becker, Minn. Sherco is a 2,222-MW three-unit facility-Xcel's largest. The company announced last year that it wanted to close the 1976- and 1977-commissioned units, but it still plans to continue operating the 860-MW Unit 3 (added in 1987). Xcel co-owns that unit with Southern Minnesota Municipal Power Agency, which holds a 41% stake.

1. Sherburne County Generating Plant. Units 1 and 2 will be retired in 2023 and 2026, respectively. Courtesy: Xcel Energy

Laura McCarten, regional vice president of Xcel Energy, told POWER that Unit 1 would be retired in 2023 and Unit 2 would be shuttered in 2026.

"This long time frame gives us the time to do this right," said McCarten, "to plan for our system needs and to meet those, to work with our employees-to transition them-to work with the local community, as we move from three-unit operation to single-unit operation."

Xcel expects to draw from past experience when it comes to managing its workforce through the transition. About 10 years ago, the company replaced a couple of older coal-fired units in the Minneapolis-St. Paul area.

"We went through that process without any of our employees losing their jobs," McCarten said. "It just goes to show that it's very important to us. We've done it before. That's how we're going to approach this situation as well."

Gas and Wind Fill the Void

Xcel has proposed building a 786-MW natural gas-fired combined cycle unit on the Sherco site before Unit 2 closes to ensure system reliability is maintained and its customer needs are met. Although the MPUC did not rule on that proposal, it did set in motion a process to examine the best replacement option for the coal-fired units. A final decision is not expected until at least 2019.

Xcel issued a request for proposal on September 22, seeking up to 1,500 MW of new wind generation in the Upper Midwest. The company expects to own about half of the total, McCarten said. Xcel has been the nation's leading wind energy provider for more than a decade. But wind is not the only carbon-free energy source that Xcel plans to utilize.

"A big part of our plan is continued operation of our nuclear plants," McCarten said. Xcel operates the single-unit Monticello and the dual-unit Prairie Island facilities in Minnesota.

"By 2030, we expect that our [Upper Midwest] energy mix will be 28% from nuclear, 22% from gas, 15% from coal, 8% from solar, 25% from wind, and 2% from hydro. Overall, that's a 63% carbon-free mix," added McCarten.

McCarten did note, however, that Xcel files a new resource plan every three years, so things can change when looking out as far as 15 years.

-Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)

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