After election, MN regulators must revisit closure of coal plants in Becker community

Less than a month before the presidential election, the Minnesota Public Utilities Commission (MNPUC) approved Xcel’s plan to retire two coal-fired electricity generating plants in Becker, Minnesota.  The retirements are part of the Xcel’s integrated resource plan, the company’s long-term plan for meeting the electricity demands of its customers.

The MNPUC’s approval of these retirements was entirely premature knowing the outcome of the presidential election could possibly reverse the implementation of the federal carbon reduction rule driving Xcel’s decision to close the coal plants.

Xcel’s plan sets forth an ambitious plan to reduce carbon emissions by 60 percent below 2005 levels by 2030.  Unlike prior plans that made incremental changes to Xcel’s system, the plan the MNPUC approved, as described by the company, “dramatically changes the [Xcel] System energy mix at the end of the planning period.”

This dramatic shift in generation mix is in large measure driven by a clear objective to meet the requirements of the federal Clean Power Plan rule—President Obama’s rule to aggressively reduce carbon emissions.  In their main regulatory filings to justify such an extreme plan, Xcel explained their plan “is the only scenario that is nearly certain to be compliant with the Clean Power Plan” and it “puts the Company on a path to transform its fleet in a planful, coordinated way that ensures we will meet our obligations under the Clean Power Plan and the most stringent of our state renewable energy and carbon reduction requirements.”

The election of Donald Trump last week largely destroyed Xcel’s justification to make such a dramatic and expensive shift from coal.  As a Washington Post headline declares, “Trump victory reverses U.S. energy and environmental priorities.”  According to Trumps statements prior to being elected, this reversal would include eliminating the Clean Power Plan rule.

Eliminating the rule may not be as simple as it sounds, but it is now more likely than not that the Clean Power Plan rule will never be enforced.  Not only must the rule survive Trump, it must survive lawsuits that prompted the U.S. Supreme Court to issue an injunction barring the Environmental Protection Agency from enforcing the rule until litigation is resolved.

Retiring these plants is a serious issue for Xcel’s ratepayers and for the Becker community.  Sherco 1 and 2, the coal plants planned for retirement in 2023 and 2026, represent 30 percent of Xcel’s based load generating capacity.  As Xcel readily admits in their regulatory filings, “Many of our customers and regulators value the low-cost baseload energy provided by Sherco Units 1 and 2 and would likely raise concerns with the cost impacts of a retirement of these Units earlier than may be necessary.”  The company further admits, “The retirement of one or both Sherco Units would impact not only the over 430 full-time employees at the plant, but also the property tax revenues for the surrounding community.”

With the primary rationale for the retirements now ripped out from under the Xcel’s long-term plans, the MNPUC must revisit those plans.  As state regulators, it is their duty to do so on behalf of Xcel’s ratepayers and the Becker community.