Xcel plans to tap wind, water for power needs

Xcel plans to tap wind, water for power needs

The utility is making a bid to turn to “green” alternatives to coal to meet growing electricity needs.

Xcel Energy Inc. is planning to turn to wind and water to head off a forecast shortfall of electricity.

The utility plans to get enough additional energy to power 375,000 homes from the projects, which would begin operating in 2015.

Once they are operating, Xcel projects that it will supply sufficient power to meet the needs of its Minnesota customers through 2033. However, the company refigures its long-term forecast every two years so the outlook is subject to change.

The company said it expects to save customers at least $38 million on their electricity bills over the decades to come, compared with the other alternatives for generating all that power. Xcel anticipates a rate increase of less than 2 percent in 2015 to cover the cost of its proposal.

The utility believes that in going green for additional energy, it will eventually save customers big regulatory charges. Xcel is assuming that the government someday will impose a tax or other cost on carbon dioxide emissions, to the tune of $9 a ton. Saving 41 million tons of carbon dioxide emissions, therefore, could spare customers hundreds of millions of dollars by 2033 if the government hammers polluters as much as Xcel anticipates.

Xcel this week asked Minnesota regulators for approval to buy 375 megawatts of electricity from Manitoba Hydro, starting in 2015, and to buy or build 380 megawatts of wind power, starting that same year, if not earlier. Ninety-five percent of Manitoba Hydro’s electricity is generated by water.

The Public Utilities Commission must give its approval before Xcel can proceed.

The plan is a belt-and-suspenders approach — Xcel would use wind as the primary energy source, with Manitoba Hydro as the backup for when the wind doesn’t blow. The additional power will add about 7 percent to Xcel’s current baseload capacity of 5,356 megawatts. (Baseload power is the electricity needed to meet customer demand day and night, 365 days a year, not counting peak demand, such as when air conditioners are cranked up on hot days.)

“We determined the proposed Manitoba Hydro/wind-power package was the best way — from an environmental, economic and reliability standpoint — to meet the remaining future needs of our electricity customers in the Upper Midwest,” Cyndi Lesher, president and CEO of Xcel’s Minnesota utility, said in a prepared statement.

Environmentalists applauded the proposal because it would spare the environment from further greenhouse gases, mercury emissions and other pollutants associated with conventional power plants fueled by coal.

“It represents to us a very creative solution to meeting base-load needs,” said Bill Grant, associate executive director of the Izaak Walton League of America, an environmental group with offices in St. Paul.

“What’s most appealing about this to us is that it really demonstrates that these sorts of alternatives do exist,” Grant said.

Michael Noble, executive director of Fresh Energy, an environmental group also based in St. Paul, said Xcel’s decision should serve as a model for utilities with coal-fired plants on the drawing boards.

“Xcel is right to be looking at a future when global warming pollutants cannot be dumped into the air at no costs,” Noble said.

Fresh Energy is one of a number of organizations raising questions about the wisdom of a proposal by a consortium of power companies — Xcel is not among them — to build a coal-fired power plant in South Dakota, near the Minnesota border. The proposed Big Stone II plant would be next to a coal-fired plant near Milbank, S.D. Seven utilities have allied to build the plant, including Otter Tail Power and Great River Energy in Minnesota.

“The rest of Minnesota’s utilities should get the picture and stop proposing to build the Big Stone coal plant,” Noble said.

Dan Sharp, communications manager for the Big Stone II project, said coal is the cheapest fuel source for that area, given the limitations of geography and technology.

Water power isn’t an option for future customers of Big Stone II, he said.

“There’s not much hydro potential left in Manitoba. Even if there were, the transmission is not available,” Sharp said.

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