September 6, 2019
It’s been two months since Xcel Energy submitted its Integrated Resource Plan (IRP) to the Public Utilities Commission (PUC). Over the last 60 days, CUB and several other parties have had a chance to give the plan a good once (twice, three times) over. The plan brings to light, once again, the amazing transition Minnesota’s energy sector is experiencing. A decade ago, Xcel’s generation system relied heavily on coal. A decade from now, Xcel’s system will be largely carbon free.
Integrated Resource Planning is a statutorily required process in which a utility submits a plan to the PUC laying out its major resource actions for the next five years and a pathway for its resource operations for the next fifteen years. For consumers, this plan lays out the framework of where your energy will come from in the coming years, as well as a great deal about the opportunities you will have for energy efficiency and demand response programs that reward you for using less power during peak times.
Xcel has proposed a plan to reduce its carbon emissions by 80 percent by 2030 and continue its stated path of 100 percent carbon-free energy by 2050. The Company has proposed to retire its coal generation fleet, extend a license for one of its nuclear generators, add substantial new solar resources, and embrace ambitious energy efficiency goals. This plan is the foundation for what Xcel has termed our “collective energy future.” We applaud Xcel for taking these steps. This plan also gives us a chance to think about what a collective energy future looks like.
Xcel Energy is a monopoly utility. It is granted, by the people, the right to provide sole service to customers in its territory without the threat of market competition. It’s required to provide safe and reliable service and, in doing so, allowed to earn a fair rate of return for that service. It is designated to provide electric service in the public interest. But what does the public interest mean in an IRP? As we highlighted a few months ago, with resource planning the devil is in the details. In the details is where the public interest is found.
For CUB the public interest is represented by a cost-effective and clean resource mix. In its filed resource plan, Xcel Energy has laid out a process for moving toward a clean resource mix that relies heavily on the Company building, relicensing, and owning new and existing generation sources (fossil, nuclear, and renewable). Xcel has laid out a plan that is highly centralized and top-down. This makes sense, because this is how a utility earns money: through the things it owns. But when we peel back some of the details, we find that there might be other ways to do this that is customer-centered and focused on value for us.
As we dig into the plan, the incorporation of distributed energy resources and vehicle electrification should play a bigger role. The Company should look to maximize the federal wind and solar tax incentives while they are still in place. This passes savings on to consumers while also bringing renewables online sooner. Xcel should ask the question: Do we need to build a new gas plant? Maybe battery storage and other approaches could fill this need instead.
As CUB keeps an eye on the development around the IRP, we will continue to push a consumer-centered vision for our collective energy future.
In the coming months, CUB and our partners will be mobilizing to not only present a consumer-focused approach to the PUC, but also getting out into the community to help you better understand what is happening in this plan so you can make your voice heard. We look forward to working with Xcel customers around the area and crafting a collective energy future that works best for them.
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