North Dakota PSC reviews latest resource plan from Xcel Energy

The North Dakota Public Service Commission at a Feb. 11 informal hearing will be reviewing a 2016-2030 integrated resource plan (IRP) filed Jan. 5 by Northern States Power d/b/a Xcel Energy.

The plan covers Xcel’s Upper Midwest operations and has been filed in other states, as well. Northern States Power is the largest electric utility in North Dakota, serving over 112,000 customers located in the Fargo, West Fargo, Grand Forks, and Minot areas.

Xcel in the plan said it developed a flexible and proactive Preferred Plan, which presents an affirmative approach for significantly reducing CO2 emissions by 2030, while moderating costs and retaining the ability to respond to future environmental requirements and market trends. The framework the utility is advancing allows for these accomplishments while providing customers with the full benefits of the significant investments they have made in the NSP System.

With the Preferred Plan, Xcel specifically propose to do the following:

  • Add approximately 1,800 MW of wind resources.
  • Add approximately 1,700 MW of utility-scale solar resources.
  • Add approximately 1,750 MW of natural gas peaking resources.
  • Operate its carbon-free, baseload nuclear plants through at least 2030.
  • Operate the coal-fired Sherco Units 1 and 2 at reduced levels through 2030.
  • Extend the life of Blue Lake Units 1-4 (153 MW total of oil-fired peakers) an additional four years through 2023.

“We believe our Preferred Plan works together to provide several interrelated, tangible and intangible benefits to our customers and stakeholders,” said the IRP. “First, by adding significant renewable generation, we are able to reduce CO2 emissions by approximately 30 percent by 2020 and approximately 40 percent by 2030, and, at the same time, continue using our existing, cost-effective thermal generation. This is an innovative solution that can provide benefits to our customers and the environment while positioning us to be responsive to the state’s greenhouse gas reduction goals and federal greenhouse gas rules, should they solidify during the planning period.

“Second, by continuing the operation of Sherco Units 1 and 2 through the planning period, our customers will continue to get the benefit of their investment in these baseload generating units while accomplishing a 40 percent emission reduction and maintaining a diverse fuel portfolio.

“Third, our Preferred Plan adds resources in a thoughtful and proactive manner. In the first five years, we have no capacity needs and are therefore proposing to only make resource additions to meet the Solar Energy Standard and accomplish a 30 percent carbon reduction by 2020. The most significant resource additions occur in the out years of the planning period. 

“Fourth, our Preferred Plan provides flexibility to allow us to address the changes to our resource mix in the out-years of the planning period and beyond. In addition to our Sherco Units 1 and 2, which we discuss in this Resource Plan, during the out years, there are both significant reductions in energy resources due to power contracts expiring without extension or renewal, and base load plant retirements. For example, from 2025 through 2034, the first phase of the Mankato Energy Center and the Cottage Grove combined cycle power purchase agreements will expire, the Manitoba Hydro power purchase agreement will expire, and our nuclear plant licenses will reach their end dates. As a result, during this planning horizon, as well as the next, we must address nearly 75 percent of the energy producing resource on the NSP System.”

Two Sherburne County (Sherco) units a strong maybe out to 2030

Said the IRP about the smaller, older Sherco coal units (Unit 3 is newer, bigger and subject to separate decisionmaking): “We recognize that the future of Sherco Units 1 and 2 is of fundamental interest to all of our regulators and other stakeholders. Through our Preferred Plan we present one potential vision for the future of Sherco. Specifically, our Preferred Plan assumes the continued operation of Sherco Units 1 and 2 through 2030, recognizing that operation beyond 2030 without SCRs is unlikely. This Preferred Plan therefore has the potential for Sherco Units 1 and 2 to cease operations in 2031. Our Preferred Plan allows our customers to continue to benefit from our investments in these low cost units while still achieving a 40 percent reduction in CO2 emissions from 2005 levels.

“That said, pending environmental regulations provide uncertainty with respect to the need to make significant investments in environmental controls at Sherco Units 1 and 2, namely the installation of Selective Catalytic Reduction (SCR) technology to control nitrogen oxide (NOX) emissions. Building off of the analysis we undertook in the Sherco LCM Study and based on information we know to-date, we believe that we can continue to operate Sherco Units 1 and 2 through the planning period (2030) without making significant investment in SCRs. However, the outcome of pending environmental regulations may change this analysis.”

Said the plan about NSP’s coal fleet in general: “We have made significant investments in our coal fleet to allow us to use these low-cost, baseload facilities through the planning period. Investments include the addition of emission reduction technologies at our King and Sherco plants to sustain long-term compliance with existing environmental regulations. Additionally, we have continued to invest in maintaining these plants to sustain efficient and reliable operations.”

In 2026 and 2027, the 262-MW contract for output from the gas-fired Cottage Grove Combined Cycle Energy Center and the 357-MW contract for output from the gas-fired Mankato Combined Cycle Energy Center expire. During this time, the Preferred Plan would add 657 MW of combustion turbines to meet capacity needs and 400 MW of wind, 500 MW of large solar and 88 MW of small solar energy resources. 

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.