Is Xcel Energy turning its back on Becker, Minnesota?
For decades, Becker, a little town in Central Minnesota, has been a powerhouse for the electric grid in the Upper Midwest because it is home to the Sherburne County (Sherco) coal plants, which produce some of the most reliable, affordable electricity in the entire state.
Now it appears that Xcel Energy may be turning its back on the town that has done so much for Xcel and its customers by pulling the plug on the proposed 800-megawatt (MW) natural gas plant that is supposed to be built in town to help soften the economic blow of losing the retiring coal facilities.
A document submitted to the Minnesota Public Utilities Commission (PUC) suggests that Xcel is considering an alternative plan to building the new gas plant in Becker. The filing reads:
The Company previously obtained advanced approval from the Minnesota Legislature allowing it to bypass the certificate of need process for a large combined-cycle unit at Sherco.
Based on the Company’s 2020 Supplement, XLI understands that a Sherco CC remains part of the Company’s Preferred Plan.
In response to this request, please confirm that the Company intends to proceed
with a Sherco CC unit consistent with its Preferred Plan.
If, in fact, the Company no longer intends to proceed with a Sherco CC unit, or has modeled a scenario without the Sherco CC unit for purposes of developing an alternative plan:
a. Please provide a list of assumptions or alternatives being considered or studied.
b. For each of the assumptions or alternatives outlined in subpart a above, provide the
old assumptions/alternatives and the new assumptions/alternatives and provide a
complete narrative description of the reasons for the modeling changes under
c. For any modeling updates, provide all modeling analyses performed by the
Company, including any EnCompass or other production cost modeling runs or
excel workbooks created, with all formulae intact.
d. For any alternative modeling performed, please provide cost estimates, including
projected rate impacts for each customer class.
My sources in Becker were able to elaborate even more. Apparently Xcel is considering building two smaller natural gas plants, about 400 MW each, instead of the 800 MW plant in Becker. One of these plants would be located in Lyon County, Minnesota, and the other would be “near the North Dakota border.”
Xcel refused to specify which side of the Minnesota border, which leads me to believe that it will probably not be built in Minnesota. This would be consistent with the emerging trend among electricity providers like Otter Tail Power and Minnesota Power, who are building new natural gas plants in neighboring states and shipping the power back in to Minnesota.
The news that Xcel may not be building a new gas plant in Becker is a devastating blow to a community that has tried to accommodate the company even though the new natural gas plant would provide fewer jobs than the existing coal plants.
This new development is adding insult to injury. Xcel shouldn’t be shutting down these coal units a decade before the end of their useful lifetimes, but they should do right by Becker and build the gas plant there if they do.