January 17, 2017
St. Cloud Times

A bill under consideration at the state Capitol would allow Xcel Energy to build a new natural gas power plant in Sherburne County to replace energy from the Sherco coal plant in Becker.

But opponents say it would bypass the Minnesota Public Utilities Commission, which declined last year to commit to the new large-scale natural gas plant in Becker when it approved Xcel’s resource plan.

That plan calls for retiring Sherco units 1 and 2 by 2026 and replacing them with natural gas, an increase in wind and solar production and energy savings.

Retiring the Sherco units will mean the loss of jobs and property tax revenue for Becker and Sherburne County. City and county officials want the certainty of knowing the gas plant will be built to help offset that loss.

Rep. Jim Newberger, a Becker Republican, is author of the House bill, which was scheduled for a hearing Tuesday in St. Paul. The Senate version is being sponsored by Sen. Andrew Mathews, R-Milaca.

Mathews said the bill aims to “complete the process that should have been finished last year.”

“We are here basically to ensure that our district, our community gets the power and the energy source that it needs, that this whole community and region of the state needs,” Mathews said.

The bill has the support of Xcel Energy. The resource plan already underwent two years of detailed analysis before the Public Utilities Commission, said Laura McCarten, Xcel’s senior vice president.

McCarten said the plan would assure that Xcel could continue to maintain reliable service to its customers at reasonable prices and move its energy mix to 60 percent carbon free. It also would benefit the community of Becker and Central Minnesota, she said.

“Investing this natural gas cycle power plant there would not only help the community retain economic vitality, but it’s also important for the grid,” she said.

If the bill passes, it would allow Xcel to move forward with certainty on the new plant, McCarten said. The Public Utilities Commission would still need to give its approval, she said.

“We just think that if we can get this answered now, there’s a lot of benefit to our customers, to the community overall,” McCarten said.

The city of Becker and Sherburne County have both voiced support for the bill. Becker Mayor Tracy Bertram called it “a good thing for Central Minnesota.”

“I think this just brings a decision closer,” Bertram said.

But groups advocating for electric consumers said the bill would give Xcel “carte blanche authority” to determine the size, type, timing and location of a natural gas plant instead of allowing the Public Utilities Commission to decide.

“Our concern from the consumer perspective is the bill mandates the construction of a specific plant without going through the process that is supposed to ensure that this is the lowest cost energy resource for Xcel’s ratepayers, who are the ones who are going to be on the hook for all the costs,” said Annie Levenson-Falk, executive director of the Citizens Utility Board, which advocates for residential electric consumers.

Before building a new power plant, investor-owned utilities like Xcel usually go through the PUC’s review process known as a certificate of need, where commissioners can assess whether the proposal is the lowest-cost and best way to meet the utility’s energy needs, Levenson-Falk said.

“The certificate of need process is the place to hash out all those kind of questions,” Levenson-Falk said. “The reason for this bill is specifically to bypass that process.”

She noted that the Sherco units aren’t scheduled to be retired until 2023 and 2026.

“We have a number of years to sort this out,” Levenson-Falk said. “I don’t see the need for a rush to short-circuit the process that protects the captive ratepayers of Xcel.”

Andrew Moratzka represents the Minnesota Large Industrial Group, a coalition of large industrial energy users. He said the Public Utilities Commission determined it was too soon and there wasn’t enough information to decide the type and location of a new plant. The certificate of need process would determine how to meet the energy need in the most cost effective way, Moratzka said.

“Really, what this bill boils down to is an end run around that process,” he said.