St. Paul Cogeneration LLC told the Minnesota Public Utilities Commission in July 8 comments that Northern States Power d/b/a Xcel Energy needs to pay attention to extending its power purchase deal with St. Paul as part of its 2016-2030 Integrated Resource Plan (IRP) filed earlier this year with the commission.
St. Paul Cogeneration (SPC) highlighted the fact that Xcel purchases energy and capacity from the SPC Facility under a 1998 Power Purchase Agreement (PPA) which expires in 2023. SPC further noted that the purchase of the SPC Facility’s energy and capacity helped Xcel satisfy a Biomass Mandate set forth in Minnesota statute which specifies in relevant part that Xcel must either construct, operate, purchase, or contract for the construction of 110 MW of biomass-generated power. SPC asserted that the role biomass will continue to play in Xcel’s future resource mix should be part of the discussion going forward – including the possibility of re-contracting with existing biomass facilities.
In the IRP, Xcel sets forth a new iteration of its “Preferred Plan” consisting of the retirement of the coal-fired Sherco Units 1 and 2 in the 2020s and the addition of significant new generation resources. Among the new resources Xcel proposes to add include: 1,400 MW of utility scale solar; 1,800 MW of wind by 2020; a 786 MW combined cycle addition at the Sherco site in 2026; a 230 MW combustion turbine (CT) to be located in North Dakota by the end of 2025; and over 1,800 MW of additional CT capacity.
These proposed resource additions are intended to address a projected capacity deficit that grows to 2,220 MW by 2030. But SPC said a considerable portion of capacity deficit is directly related to Xcel’s plans not to seek re-contracting opportunities with existing resources. It added: “Xcel fails, however, to justify its complete disregard of opportunities to re-contract with existing resources, instead favoring new utility-owned resources. These existing resources, however, are not going away. Accordingly, whether needed capacity should come from expending significant capital on new resources, or from existing contracted-for resources like the SPC Facility, can and should be vetted in subsequent IRP and related processes – particularly in light of the statutory goals and objectives clearly set forth in the Biomass Mandate. Such resources offer cost savings and other benefits.”
As a combined heat and power (CHP) facility, SPC said its facility has the added benefit of providing the adjacent district heating system with an efficient way of heating downtown by not only generating electricity but also capturing the waste heat generated. Thermal energy from the SPC Facility is supplied to more than 31 million square feet of building space throughout downtown Saint Paul, including the Minnesota State Capitol Complex.
The company concluded: “SPC appreciates the opportunity to provide these brief Initial Comments and respectfully requests that the Commission (1) ensure that the role biomass will continue to play in Xcel’s future resource mix be part of the IRP dialogue going forward; and (2) reject any proposal that would preclude a full and fair evaluation life extension projects and/or contract extensions with SPC. Important issues related to Xcel’s obligation to satisfy the policies and intent underlying the Biomass Mandate should be fully addressed in Xcel’s future IRP processes.”