Xcel Sets Closure of Minnesota Coal Plants

Xcel Energy on May 20 announced it would close its two remaining coal plants in Minnesota over the next decade, and the utility said it also wants to operate its Monticello nuclear plant in the state until at least 2040.

Xcel, which is headquartered in Minneapolis, Minnesota, and serves electricity and natural gas customers in eight states, said its latest integrated resource plan (IRP) calls for reducing carbon emissions more than 80% over the next decade compared to 2005 levels, as the company adds more generation capacity from renewable sources.

The company's proposed IRP, called the "Upper Midwest Energy Plan," which it will send to the Minnesota Public Utilities Commission for review in July, is part of Xcel's effort to "provide customers 100% carbon-free electricity by 2050." The utility in 2017 announced a similar plan for its Colorado operations.

Xcel CEO Ben Fowke said, "We're showing how we can execute on our plans to achieve an 80% carbon reduction by 2030, which is an important milestone to our ultimate goal of 100% carbon-free electricity by 2050."

Fowke in a Monday conference call with media said the change in the utility's power portfolio would not result in significantly higher customer utility bills. "We think we can do this at or below the cost of inflation. It's not going to be free, but it's going to be inexpensive and importantly, it compares very well to other alternative plans."

Reducing Carbon Emissions

Chris Clark, president of Xcel for Minnesota, North Dakota, and South Dakota, said, "This is a significant step forward as we are on track to reduce carbon emissions more than 80% by 2030 and transform the way we deliver energy to our customers. Accelerating the closure of our coal plants and leading this clean energy transition would not be possible without the dedication and support of our key stakeholders. We thank them for their work to put us on a path to deliver 100% carbon-free electricity by 2050."

Xcel said it will close its coal-fired 511-MW Allen S. King Generating Station in Oak Park Heights on the St. Croix River in 2028; it was originally slated to close in 2037. It plans to retire its 2,238-MW Sherburne County (Sherco) Generating Station in Becker, about 45 miles northwest of Minneapolis-St. Paul, in 2030.

The company said it would retrain employees impacted by the closures for other jobs within the company. City leaders in both Becker and Oak Park Heights on Monday asked state lawmakers for support in light of the coal plant closures.

"Our cities want to be partners in the clean energy transition, but we cannot go it alone," Becker city administrator Greg Pruszinske said in a statement. Becker officials have said the Sherco plant contributes 75% of the city's local tax base, and is responsible for about 300 jobs.

"We absolutely need the partnership of the state, Xcel and other stakeholders to support us through the transition," Pruszinske said.

"Our employees are the reason we are able to deliver reliable service to our customers," said Clark. "Over the next decade, we will work closely with them and our plant host communities to ensure a successful transition. We have been on our clean energy journey for more than a decade and have a track record of making the transition with a strong focus on our employees and communities."

Wind Expansion

The utility said it will complete its largest-ever wind expansion in 2022, adding 1,850 MW of wind power. Xcel said that after that expansion, its customers in the Upper Midwest will receive more than 30% of their electricity from wind power.

Xcel said more than 50% of its customers' power in the region will come from renewable resources by 2030, after the closure of the coal plants and completion of a planned expansion of solar power. The utility plans to add more than 3 GW of solar power to its portfolio in the region by 2030.

Xcel said it worked with a coalition of groups, including labor and environmental agencies, on the agreement to close the coal plants and add renewable power. Those groups included the Union of Concerned Scientists, Sierra Club, the Center for Energy and Environment, and local labor union LIUNA Minnesota and North Dakota. The utility also is working with the Minnesota Department of Commerce on the economic impact of the plant closures.

Clark in a statement said, "Clean energy and economic vitality are critically important to our communities and we appreciate the leadership and collaboration from this coalition of groups in reaching this agreement. We look forward to continued partnership as this agreement is reviewed by the Minnesota Public Utilities Commission."

Xcel also is buying the Mankato Energy Center from Southern Company subsidiary Southern Power. The sale, announced in November 2018, an existing 375-MW natural gas-fired unit, and a second, new 345-MW gas-fired unit.

Keeping the Monticello Nuclear Generating Plant operational until at least 2040 will require approval of both state and federal authorities in the licensing process. The 671-MW plant, located in Monticello along the Mississippi River, has operated with a single General Electric BWR-3 reactor since 1971.

Xcel operates another nuclear plant in Minnesota, the two-unit Prairie Island plant near Red Wing. That plant's operating licenses are set to expire in 2033 and 2034. Minnesota lawmakers have discussed legislation to support nuclear power in the state.

-Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).

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