Minnesota lawmakers introduce bill to build natural gas plant without regulatory approval
The Minnesota House committee on energy overwhelmingly approved legislation last week to allow Xcel Energy to build a large natural gas-fired power plant in Sherburne County without the approval of state utility regulators, prompting backlash from business and consumer groups.
The 786-megawatt (MW) gas plant, which is estimated to cost more than $1 billion, would replace two 680-MW coal-fired units at the Sherburne County Generating Station (Sherco) near the town of Becker that are scheduled to close by 2026. The natural gas-fired plant would be located on the same site as the coal-fired generators, and would open around 2025.
Xcel currently has a proposal to build the plant pending before the Minnesota Public Utilities Commission (PUC), but the agency, which has identified a need for the Becker plant but has nonetheless put a decision on the proposal on hold, requesting earlier this month for Xcel to draft a certificate of need that describes how the energy would be generated and to note socioeconomic impacts on the local community and regional reliability.
Rick Evans, Xcel’s director of regional government affairs, told the House Committee on Job Growth and Energy Affordability that Xcel “needs some certainty at this point in time” regarding plant construction, while clarifying the PUC would still review “every dime” of expenses for the plant.
The legislation experienced immediate pushback by business and consumer groups, including the Minnesota Large Industrial Group (MLIG) and the Citizens Utility Board, as well as by several clean energy groups.
“The ink had barely dried” on the PUC order when Xcel asked legislators to craft a bill negating the regulatory authority of the commission, according to Attorney Drew Moratzka of Stoel Rives LLP, which is representing MLIG, whose members collectively pay more than $350 million annually for electric energy.
“This is an end run around the commission’s Jan. 11th resource plan order,” he said, according to MidWest Energy News. “First, you have an end run around of the process. Second, the bill mandates cost recovery.”
The PUC says the gas plant would not be delayed if Xcel goes through with the process of drafting a certificate of need, and previously concluded that Xcel had “adequate time” to evaluate all options without jeopardizing the plant’s feasibility.
The bill, sponsored by Rep. Jim Newberger (R-15B), was approved 16-3 by the committee last week, with the “no votes” coming from three Democratic-Farmer-Labor Party members. Rep. Newberger says the PUC did not fully consider the economic impact of the decision to close the coal-fired units. The power plant is Sherburne County’s largest taxpayer, employing about 300 people.
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