Sierra Club puts pressure on Xcel, Minnesota PUC to shut Sherco

The Sierra Club on Sept. 23 launched a public pressure campaign to force Northern States Power d/b/a Xcel Energy (NYSE: XEL) to reconsider its plans to stick over the long term with the coal-fired Sherburne County (Sherco) power plant.

The club said Sept. 23 that it is backing a statewide advertising campaign to call for the retirement of what it called Minnesota’s largest polluter, Sherco, located in Becker, Minn. The power plant is one of the top emitters of mercury and SO2 in the nation the club said. The ads encourage Minnesota residents to move forward to clean energy solutions.

The Sierra Club’s paid media campaign is a crucial part of a weeklong push to encourage citizens to tell the Minnesota Public Utilities Commission to replace Sherco units 1 and 2 with clean energy alternatives. This comes after a successful comment drive at the state fair, bolstered by remarks from Gov. Mark Dayton about moving Minnesota forward to clean energy. Dayton also said Minnesota should aim to eventually eliminate coal-burning power plants in the state, the club said.

“There’s just about a week left for Minnesotans to step up and demand cleaner, safer air and cleaner energy,” said Joshua Low, Senior Organizing Representative for the Sierra Club North Star Chapter’s Beyond Coal Campaign. “Xcel Energy should keep Minnesota moving forward by retiring the Sherco 1 and 2 coal plant.”

The commission on Sept. 23 posted to the docket for a Northern States Power resource plan case dozens of basically identical comments from citizens that said: “The majority of Minnesota’s electricity still comes from burning coal, which pollutes our air and water and contributes to climate disruption. I call on the P.U.C. to require Xcel to submit a plan for replacing the Sherco coal plant with energy savings from efficiency and clean energy, including Minnesota wind and solar power.”

The Minnesota commission is taking comment until Oct. 1 on a life-cycle management plan from Xcel that said Sherco Units 1 and 2 are economic and should stay in the company’s long-term plan. Parties can also submit recommendations, within the scope of the Sherco study, to be addressed in Xcel’s 2014 Integrated Resource Plan, which is scheduled to be filed Feb. 1, 2014. They can also comment on whether the Feb. 1, 2014, deadline for Xcel’s next resource plan should be modified, given the timeline of Xcel’s competitive resource acquisition process.

Xcel said this plant has a place in its long-term resource plan

On July 1, Xcel filed this life-cycle study for Sherco Units 1 and 2. The study was ordered to examine the feasibility and cost-effectiveness of continuing to operate, retrofitting, or retiring Sherco 1 and 2. The study assesses the impact of recently finalized and likely forthcoming EPA regulations and provides cost estimates of the pollution control equipment which could be required at Sherco 1 and 2.

The Sherco facility in Becker, Minn., is the company’s largest power plant in the Midwest, with its three units capable of providing a total of 2,400 MW. Units 1 and 2 have a production capability of 750 MW each and provide about 20% of the electricity used by Northern States Power’s Minnesota customers each year. Unit 3 is bigger and newer, so it didn’t fall into this analysis.

“Sherco’s size, age, role in our generation fleet, and existing pollution control investments differentiate it from other coal-fired power plants in Minnesota that have been retired or are scheduled to be retired in the next few years,” said Xcel in the life-cycle analysis.

The company used the Strategist resource planning model to evaluate the cost of retrofitting the units with additional pollution control equipment or retiring them. The retrofit scenarios evaluate the installation of Selective Catalytic Reduction (SCR) equipment for NOx control, while the retirement scenarios evaluate replacing Sherco 1 and 2 with new natural gas generation, renewable energy, and conservation or a combination of those options.

The modeling results show that when the anticipated direct costs to operate Sherco 1 and 2 (including SCRs) are compared to the alternatives, continued operation of Sherco 1 and 2 is clearly the most cost-effective option, the utility wrote. “Only a significantly lower forecast of natural gas prices or a much higher forecast of coal prices calls that conclusion into question,” it added.

Sherco Unit 3 returning to action after a long shutdown

Xcel told the Minnesota commission on Sept. 20 that the restart of Sherco Unit 3 ran into a hitch, but that the unit should be back up by Oct. 7. The 884-MW Sherco 3 had been offline since November 2011 due to mechanical failures and a subsequent fire.

The utility said in the Sept. 20 update report that the unit was synchronized to the grid on Sept. 4 following a series of successful initial return-to-service tests. Sherco 3 operated at about a 240 MW level until it was taken off-line on Sept. 7 to address post-restoration items including change-out of the fine-mesh screens that protect the turbine from small particulate damage when the unit initially starts-up.

“At this time we anticipate this short post-restoration outage to end with Sherco 3 returning to service on or around October 7, 2013,” Xcel reported. “Following that return there will be four days of testing at load before the unit is released for full economic dispatch.”

U.S. Energy Information Administration data shows that coal suppliers to the plant earlier this year were the Absaloka mine in Montana of Westmoreland Coal and the Black Thunder mine in Wyoming of Arch Coal.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.