Clean Energy Plan: “True spirit” of utility-clean energy collaboration, despite key plan differences
In response to Xcel Energy's preferred resource plan filed with the Minnesota Public Utilities Commission (PUC) last January, a group of clean energy organizations submitted an alternative Clean Energy Plan this July. (Note: This regional Clean Energy Plan is different from the national Clean Power Plan, which is a federal rule to cut overall carbon emissions from existing power plants with individual state targets and flexibility in how states meet their targets.) Wind on the Wires executive director Beth Soholt sat down to talk about the process and motivations behind developing the plan, what it means for future resource planning, and how the Clean Energy Plan can help Minnesota and Xcel Energy continue to lead the nation on clean energy.
The Clean Energy Plan marks the first time Minnesota’s clean energy organizations have developed an alternative to a utility resource plan. What was the motivation behind the plan?
Beth: One of the big drivers in developing the Clean Energy Plan was to create a cleaner and more diverse power supply for Xcel customers through the retirement of Sherco 1 and 2 [Sherburne County Generating Station coal-fired power plants], and to provide a credible alternative for energy regulators to consider. Xcel’s current preferred resource plan continues to run both Sherco 1 and 2, albeit at reduced levels through the 15 year planning period. Previous orders from the PUC required Xcel to look into shutting down the units, and Xcel’s preferred plan does not address that point specifically. In developing the Clean Energy Plan, we wanted to see the results of shutting down the Sherco units and deploying additional clean resources sooner — and determine whether it would be cost effective. To do this effectively required modeling resources that would provide solid, technical data on an alternative plan. For the first time, the clean energy organizations worked with a consultant using the same software Xcel used to establish their resource plan, with inputs that reflect what we want to see included. Skipping to the conclusion, the results showed that the resulting Clean Energy Plan is in fact cost effective.
What are the key differences between Xcel’s plan and the Clean Energy Plan?
Beth: The biggest difference is with Sherco 1 and 2 — the Clean Energy Plan retires those units much earlier than Xcel’s preferred plan. The use of renewable resources like wind and solar is actually similar in both plans. However, the Clean Energy Plan deploys renewables earlier, which is more cost effective and would allow Minnesota to take advantage of the additional benefits of early adoption, such as the low prices that are currently available and the “first-mover” advantage Xcel has been so great at utilizing. The Clean Energy Plan also employs a big higher energy efficiency level in the 2015-2021 timeframe.
This development of an alternative resource plan seems unique — how has this process differed from past resource planning?
Beth: There is a high bar when you offer an alternative plan — you have the burden of proof to show that the alternative really is better than what the utilities are proposing. To do that you need the right resources and expertise, and, while in the past we have come up to the edge of that with advocacy, the big difference this time was performing the technical modeling. The timing was right this year — people are looking to Minnesota as a leader, and with the Sherco question and the availability of really good clean energy alternatives, the pieces fell in to place to allow us to put a real alternative on the table.
Are there additional benefits that have resulted from developing this alternative plan?
Beth: Being able to demonstrate from a technical perspective that the Clean Energy Plan is a viable alternative that will provide cost-effective electricity to Minnesotans has put us on equal footing in discussions with Xcel. Xcel has really wanted to understand the Clean Energy Plan, and on both sides there is a true spirit of cooperation. Throughout the process Xcel has increased their communications and outreach, and really ramped up stakeholder involvement. This increased collaboration between Xcel and the clean energy organizations is a huge benefit to all parties.
Going forward, what should the ideal resource planning process look like? And how will this year’s process impact future resource planning in Minnesota?
Beth: Gaining access to modeling capability has allowed us to play in the same space as the utilities and to have a dialogue at a technical level — it has allowed us to move from a theoretical conversation to a plan that is technically credible. If the clean energy organizations are successful in convincing the PUC that now is the right time to provide certainty regarding a date for retiring Sherco 1 and 2 and pursuing aggressive clean energy, it would really create a strong model for future stakeholder involvement in resource planning. Again, the timing is right. Other Minnesota utilities will be making decisions about their own resource plans, and being able to show a technically robust alternative is a game changer.
Beth: We are continuing to message the results of the modeling for the Clean Energy Plan — most importantly that this will allow Minnesota and Xcel to continue to be national leaders in clean energy. In Minnesota, there has been an increased interest in clean energy and a desire to push our state to the next level and maintain our current leadership position. Time and again the facts have shown that clean energy is cost effective, and in the past when Minnesota has embraced the adoption of clean energy, it has always been the right thing to do. We are also working to communicate why now is the right time — strengthened by a good alternative plan, cost-effective renewables, and continuing a trend that Minnesota has been on for a number of years.
The ultimate decision will come from the PUC. The Clean Energy Plan shows that we could deploy clean energy sooner and cost-effectively. Deploying the Minnesota clean energy organization's Clean Energy Plan, or something very simlar, will keep Minnesota and Xcel in a leadership position, which is a win-win for everyone. We have a really good chance to deploy renewables quicker and generate electricity from resources that will benefit Minnesota and the region. Xcel has been so proactive on clean energy for the past decade and this will continue that trend.
The next phase of the process is for stakeholders to file comments in the docket by October 2, and then the Minnesota Public Utilities Commission will make its decision on Xcel Energy’s integrated resource plan in the following months.