Latest Posts





Xcel Should Save Sherco 1 and 2, Skip the Wind

On October 2nd, Xcel Energy told a crowd of people about how they intend to grow their “carbon free” electricity generation portfolio by replacing coal-fired generation with more wind. This would happen as the monopoly utility closes three coal plants at Sherburne County (Sherco) Unit 1 and 2, in Becker, and the Allen S. King plant in Stillwater.  

Xcel should save the coal and skip the wind, because Minnesota can’t afford more failed energy policies.  

The graph below shows electricity bills have skyrocketed by nearly 60 percent since 2004, when the state had almost no wind in its generation portfolio. The graph clearly shows a strong correlation, which we would argue is causation, between increasing wind generation and increasing electric bills for Minnesota families and businesses. 

The price of electricity  has risen so high in Minnesota that the state no longer has bragging rights over having lower prices than the national average. As of 2006, Minnesota electricity prices were 20% lower than the national average. Now, our prices are 2% higher.   

Instead of wasting more money on wind energy, Xcel Energy should keep  coal-fired power plants like Sherco  1 and 2 and Allen S. King open as long as possible  because these plants generate affordable, reliable  electricity regardless of weather conditions.  

American Experiment has obtained FERC Form 1 data from Federal Energy Regulations Commission (FERC), which keeps detailed records of the amount of electricity generated and the cost to generate that electricity for every major power plant in the country.  

The graph below shows two things: 1) that generating electricity from Sherco   is incredibly inexpensive, and 2) the cost of generating electricity from Sherco  is lower when the plant runs at a higher capacity factor, i.e. when the plant is producing more electricity.  

Notice that when Sherco w as operating at capacity factors above 65% before 2010, the cost per MWh of electricity never exceeded $25. Since 2011, however, Sherco has been hovering around 50% and below, resulting in a cost per MWh  risin g near $35.  

 Our calculations show that if Sherco operat ed at 65% in 2016, even while calculating for higher fuel expenses, the price per MWh comes down to $29.56.   

 Power plants are able to generate electricity more affordably the more they generate because these plants have high fixed costs, such as mortgage payments on the cost of building the plants, plus interest, employee salaries, and taxes and fees.  Variable costs, which consist of the fuel used at these plants, are not the only factors contributing to the overall cost of operating these plants  in a given  month.  

 As these plants generate more electricity, the cost of generating each unit of electricity falls. In order to have lower electricity prices, we should be using more coal, not less. 










Upcoming Events

  • Morning in Minnesota Breakfast Series: Winona

    Location: Signatures Restaurant, 22852 County Road 17, Winona, MN 55987

    Please join Center of the American Experiment Friday, March 6 at Signatures for a FREE breakfast with economist John Phelan.

    Register Now
  • Lunch Forum with Amity Shlaes

    Location: Hyatt Regency Minneapolis 1300 Nicollet Mall Minneapolis, MN 55403

    Buy tickets for March 2nd HERE. About This Event: Enjoy our Early Bird Ticket Special through February 23rd! After this date, ticket price will increase to $30. Doors open at 11:30 AM, program and lunch begin at Noon. In Great Society, the New York Times bestselling author of The Forgotten Man and Coolidgeoffers a stunning revision of our last great period of idealism, the 1960s, with burning relevance for our contemporary challenges. Today, a battle rages in our country. Many Americans are attracted to socialism and economic redistribution while opponents of those ideas argue for purer capitalism. In the 1960s, Americans…

    Register Now
  • 2020 Annual Dinner Featuring Sarah Huckabee Sanders

    Location: Minneapolis Convention Center Ballroom 1301 2nd Ave S Minneapolis, MN 55403

    American President: The Unorthodox Approach to Politics that Changed the World. Sarah Huckabee Sanders served as White House Press Secretary for President Donald J. Trump from 2017 to 2019. A trusted confidant of the President, Sanders advised him on everything from press and communications strategy to personnel and policy. For two and a half years, Sanders was at the President’s side, battling with the media, working with lawmakers and CEOs, and staffing the President on every foreign trip, including dozens of meetings with foreign leaders. Sanders is only the third woman and the first mother to hold the job of…

    Register Now