Xcel Energy asked Minnesota regulators to reaffirm that increasing generating capacity at Prairie Island Nuclear Generating Plant is in customers’ best interest before the company continues with the project.
The filing with the Minnesota Public Utilities Commission, as previewed in Xcel Energy’s Upper Midwest Resource Plan update filing in December, was prompted by changes that occurred since the commission in late 2009 issued a Certificate of Need after deciding that the project provided value to customers.
“Work completed so far has given us a better understanding of the project’s costs and benefits, as well as the uncertainty that remains” said Judy Poferl, president and CEO of Northern States Power Co.-Minnesota, an Xcel Energy company. “The project still is expected to benefit customers; however, the magnitude of the benefit is substantially lower than originally anticipated.
“We’re making this filing to prompt a good dialogue and facilitate a thorough understanding of the issues that could affect customer benefits so the commission and other stakeholders can weigh them before significant additional costs are incurred. This is an example of how we constantly review and adjust our resource plans as necessary to ensure we implement projects that provide value to our customers.
“When circumstances change significantly after the initial regulatory approval, as with this project, our approach is to take a step back and take another look before continuing. It’s prudent to have this review now rather than after completing the project.”
As the filing notes, the project’s benefit to customers is less because only 135 megawatts of added capacity can be achieved cost effectively, not 164 megawatts as originally proposed, and because implementation has been delayed due to changing federal review requirements. Meanwhile, long-term growth in customer needs now is projected to be about 40 percent less than forecast when the project was first proposed, and falling natural gas prices make the alternative to adding capacity at Prairie Island – natural gas-fueled generation – less expensive than it was previously.
Additionally, there are possible combinations of new conditions that could lead to the conclusion that the Prairie Island project no longer is cost effective, the filing states.
“We look forward to working with all interested stakeholders on this issue, and in reaching a decision that is in the best interests of our customers,” Poferl said.