Xcel argues for need on 187 MW of new solar projects in Minnesota

Northern States Power d/b/a Xcel Energy on April 17 filed at the North Dakota Public Service Commission its rebuttal testimony related to a November 2014 application for advanced prudency approval for 187 MW of Purchase Power Agreements for: the Marshall Solar project located near Marshall, Minnesota; the MN Solar I project, located near Tracy, Minnesota; and the North Star Solar project, located near North Branch, Minnesota.

This application is up for a May 6 formal hearing at the North Dakota PSC.

Kurtis J. Haeger, Managing Director of Resource Planning for Xcel Energy Services, responded to the testimony of commission Advocacy Staff member Mike Diller. “Mr. Diller provides an important and valid perspective for the Commission to consider in planning for system additions in a multi-jurisdictional utility like the Company,” Haeger wrote. “Mr. Diller’s testimony is helpful in that it provides a reasoned policy perspective on the timing and justification for the Company’s resource additions to serve our North Dakota customers. However, that policy perspective carries with it certain implications and risks that should also be taken into account as the Commission considers the appropriate timing for adding resources under the circumstances.”

Among other things, Haeger said the company has concerns about Diller’s ideas about acceptable capacity margins and whether the Midcontinent ISO market serves as a buffer to tight capacity margins. “These concerns relate mainly to MISO’s resource adequacy requirements and the related planning reserve margin as well as the feasibility of relying on MISO’s voluntary capacity auction,” he wrote. “Fundamentally, we believe that participation in MISO does not remove our need to ensure that we have enough capacity resources for our own NSP System.”

He later added: “When we couple the changing industry with the potential of retiring a significant number of large baseload plants in the next several years, it is clear that the future need for new generation is very difficult to predict. It is my opinion that this uncertainty argues for a more conservative planning approach now.”

He also wrote: “With implementation of existing environmental regulations (e.g., Mercury and Air Toxics Standards, Cross-State Air Pollution Rule) or potentially new regulations (e.g., Clean Power Plan), there is a high likelihood that the economics of keeping existing power plants open will be adversely impacted, which could result in retirements. These retirements are likely to happen simultaneously across many utilities. The potential for significant future power plant retirements within a relatively short period of time could constrain available capacity when it is most needed. Again, this uncertainty would suggest that MISO’s voluntary capacity auction may have use as a backstop tool only, but not as a prudent resource to rely on to meet capacity needs. And relying on other utilities with excess generation to meet the Company’s capacity needs could lead to unforeseen capacity deficiencies in the future.”

The 187-MW “Solar Portfolio” consists of power purchase deals for:

  • Marshall Solar – a 62.25-MW project to be developed by NextEra Energy Resources. Marshall Solar will consist of 30º fixed tilt configuration, photovoltaic modules and will interconnect at the existing Lyon County substation at 69 kV. The bulk of construction of the Marshall Solar project is expected to begin in spring 2016, with engineering, procurement and some construction occurring in 2015. This schedule is designed such that the project will qualify for the 30% federal ITC tax credit, which will be used by NextEra Energy Resources to offset its cost of construction. This project is covered by a 25-year power purchase agreement (PPA) between the developer and Xcel. 
  • MN Solar I – a 24.75-MW project to be developed by juwi solar Inc. MN Solar I consists of a ground-mounted single-axis tracking system of multicrystalline solar cells. MN Solar I plans to interconnect at a new substation on the Tracy to Walnut Grove 69-kV line. The bulk of construction of the MN Solar I project is expected to begin in spring 2016, with engineering, procurement and some construction occurring in 2015. This schedule is designed so that it will qualify for the 30% federal ITC, which will be used by juwi solar to offset its cost of construction. This is a 25-year PPA. 
  • North Star Solar – a 100-MW project to be developed by Community Energy Renewables LLC. North Star Solar will consist of single axis tracking panels. The project plans to interconnect at 115 kV to the existing Northern States Power Chisago County Substation. The bulk of construction of this project is expected to begin in spring 2016, with engineering, procurement and some construction occurring in 2015. This schedule is designed such that the project will qualify for the 30 percent federal ITC, which will be used by Community Energy Renewables to offset its cost of construction. This is also a 25-year PPA. 

Xcel had initiated an RFP for utility-scale solar resources in April 2014. It received over 100 proposals for over 2,100 MW of solar photovoltaic generating capacity from 36 developers. These three projects were picked as winners out of that group.

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.