ST. PAUL, Minn. (AP) – Minnesota utility regulators heard competing bids Tuesday as they decide whether solar power or natural gas should generate additional electricity for Xcel Energy’s 1.2 million customers in the state.
The decision marks the first time the two energy sources have competed head-to-head on price before the state Public Utilities Commission, which is scheduled to decide the question on Thursday, the Star Tribune reported.
“You are setting a precedent here that is going to affect future acquisition proceedings,” Eric Swanson, an attorney for Invenergy Thermal Development, told the commission.
At issue is whether Xcel Energy’s customers would be best served by $250 million in solar power arrays proposed by Geronimo Energy, a renewable energy developer based in Edina, or by adding generating units at power plants in Burnsville, Cannon Falls or Mankato.
Regulators asked for competing bids from energy developers last year because Xcel Energy and state analysts projected a need for more power in 2017-2019, after the remaining two coal-burning units are retired at Xcel Energy’s Black Dog generating station in Burnsville.
After a trial-like review, Administrative Law Judge Eric Lipman concluded three months ago that Xcel Energy’s power needs aren’t growing so fast. He recommended Geronimo Energy’s plan to build about 20 solar arrays next to Xcel substations as the best deal.
Commissioners on Tuesday heard hours of arguments from Xcel Energy, which proposes adding a natural gas unit at its Black Dog plant, and other competitors, the newspaper reported. The two other natural gas proposals are from Invenergy Thermal Development, a Chicago-based company that would expand its existing Cannon Falls plant, and Houston-based Calpine, which proposes another unit at its Mankato Energy Center.
Only four of the five commissioners will decide the outcome. The fifth commissioner, Dan Lipschultz, who was appointed to the PUC in January, has recused himself because of prior representation.
Renewable energy advocates favor Geronimo’s solar project. One of them testified that state law requires the PUC to favor renewable energy over fossil fuel.
“All of the state policies point in one direction- they point away from fossil fuels and toward renewables,” said Kevin Reuther, legal director of the Minnesota Center for Environmental Advocacy, a St. Paul nonprofit law firm representing environmental groups such as Fresh Energy and the Sierra Club.
Geronimo Energy’s solar project would help Xcel meet its state mandate to get 1.5 percent of its power from solar by 2020. The company proposed it before the Minnesota Legislature enacted the mandate in 2013. The 100 megawatts of solar power would represent a sevenfold increase in the state’s solar generating capacity.
Natural gas developers and Xcel Energy got support from the state Commerce Department, whose Energy Resources Division analyzes utility rates and investments. Kate O’Connell, manager of utility regulation, urged the commission to push ahead with a couple of the natural gas projects, choosing the best-priced units after further commercial negotiations.
“We do think it is important to add solar resources to Xcel’s system,” she said. O’Connell endorsed a separate, all-solar bidding competition, which the Minneapolis-based utility plans to launch next month.
Information from: Star Tribune, http://www.startribune.com