North Dakota PSC again rejects advanced prudency for Xcel solar capacity

For the second time this year, the North Dakota Public Service Commission has rejected an application by Northern States Power for an advanced prudency approval for new solar capacity, saying in both cases that these Minnesota projects are not the least-cost options for North Dakota ratepayers and that the projects are needed to meet the state of Minnesota’s unusually high renewable energy standards.

The commission on Sept. 16 rejected a Feb. 13 application from Northern States Power seeking an advance determination of prudence (ADP) for up to 100 MW of solar generation to be added to the NSP system through a 20-year power purchase agreement (PPA) with Aurora Distributed Solar LLC, an affiliate of Geronimo Energy LLC. The capacity and energy acquired under the Geronimo Solar PPA will be provided by distributed solar generation facilities to be located at up to 24 sites in Minnesota that interconnect to various Northern States Power distribution substations. Northern States Power is a unit of Xcel Energy (NYSE: XEL).

NSP testified that the capacity benefits of the project, as well as the ability to meet Minnesota’s solar energy goals and NSP’s goal to significantly reduce carbon dioxide and other fossil fuel emissions, makes the Geronimo Solar PPA an appropriate acquisition at this time. NSP also testified that Minnesota’s renewable and solar requirements are higher than the other states it serves.

Said the North Dakota PSC Advocacy Staff in a July 21 recommendation that the application not be approved: “Based on review of NSP’s application and assumptions, inputs, and analysis. Advocacy Staff testified that the Geronimo Solar PPA is inconsistent with least-cost planning. Advocacy Staff testified that the Geronimo Solar PPA was undertaken by NSP in response to the Minnesota SES and environmental regulations and is not a cost-effective resource addition. Advocacy Staff testified that if NSP needs additional energy resources then lower cost energy resource additions are available to NSP, including alternatives that provide a hedge against future environmental regulations and natural gas prices. Advocacy Staff compared NSP’s most recent load and generating capacity forecasts, and testified that NSP expects to have sufficient generating capability to meet its reserve margin obligations through 2023 without the proposed Geronimo Solar PPA addition.”

The commission’s Sept. 16 decision said: “The Commission finds NSP has not shown the Geronimo Solar PPA to be a prudent resource addition. Therefore, the Commission declines to grant an advanced determination that NSP’s Geronimo Solar PPA is prudent.”

Back on June 17, the North Dakota commission also rejected a November 2014 application from Northern States Power for an ADP for a 187 MW solar portfolio. That portfolio consists of power purchase agreements for the output of:

  • the 62.25 MW Marshall Solar project, located near Marshall, Minnesota;
  • the 24.75 MW MN Solar I project, located near Tracy, Minnesota; and
  • the 100 MW North Star Solar project, located near North Branch, Minnesota.

Said that June 17 order: “Advocacy Staff testified that the Solar Portfolio resource additions were undertaken by NSP in response to the Minnesota SES and are not cost-effective resource additions. Advocacy Staff testified that if NSP needed additional energy resources then lower cost energy resource additions are available to NSP, including alternatives that provide a hedge against future environmental regulations and natural gas prices. The Commission finds that NSP has not shown its proposed Solar Portfolio to be prudent. Therefore the Commission declines to grant an advanced determination that NSP’s Solar Portfolio is prudent.”

Laura McCarten, Xcel Energy’s regional vice president, said about the Sept. 16 decision: “Our goal is to maintain a diverse energy mix that delivers clean, reliable service at a reasonable price for our customers. We respect the North Dakota Commission’s decision and will work with the Minnesota Public Utilities Commission as this project moves forward.”

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.