Xcel said the legislation passed Monday would give it more certainty in recovering at least $1.4 billion in maintenance costs expected over the next 17 years at its nuclear reactors in Monticello and Red Wing. Opponents of the Senate bill fear it would shift risk from Xcel’s shareholders to ratepayers.
Similar legislation is pending in the House.
By a vote of 37-29, the Senate passed a newly amended version of the bill. The amendments appear to strengthen the hand of the Minnesota Public Utilities Commission (PUC). The legislation has been criticized for weakening the PUC’s authority over Xcel’s nuclear investment decisions, and Gov. Mark Dayton has threatened to veto it for that reason.
Xcel said in a statement Monday that continued investment in its nuclear plants is critical to its goal of delivering 85 percent “clean energy” by 2030. Nuclear power, which isn’t a significant source of carbon emissions, would make up about one-third of that 85 percent, with wind and other renewables comprising the rest.
“We support the amended bill as it gives the commission a useful tool when reviewing our proposed investments,” Xcel said in a statement.
The Minnesota Chamber of Commerce also continues to oppose the legislation. “There are still some fundamental concerns about the need for the bill in the first place,” said Cam Winton, the chamber’s director of energy and labor/management policy.
Under the legislation, Xcel would submit its nuclear improvement tab in a special proceeding before the PUC, outside of the current procedure for not only nuclear plants, but for coal and natural-gas fired generators, too.
Essentially, the bill would allow Xcel to get upfront approval from the PUC for future nuclear expenses, instead of approval after those investments are made. Critics say that would give Xcel an incentive to aim high on its estimates, in case of any future cost overruns.
The bill that passed the Senate would give the PUC the power to reject or modify any Xcel nuclear proposal. And the PUC would have sole discretion to approve any Xcel costs in excess of the company’s original expected costs.
Xcel needs to invest at least $1 billion to keep Prairie Island’s two nuclear reactors going into the 2020s and through the expiration of their federal licenses in 2033 and 2034. Monticello’s sole reactor needs an estimated $420 million in investments from 2021 through its license expiration in 2030.