Xcel Energy Approved to Run Two Coal Units on Seasonal Basis

The Minnesota Public Utilities Commission approved Xcel Energy’s request to offer two of its coal units into the Midcontinent Independent System Operator market on a seasonal basis. That means the company can idle the two units for six months of the year, which is expected to save customers money while also reducing air emissions.

“This is an important proposal and I appreciate Xcel Energy bringing it forward,” said Commissioner Matt Schuerger. “I think this highlights Xcel’s focus on saving their customers money, on meeting Minnesota’s environmental policies, and in being responsive to the investigation the Commission opened.”

Under the order, Xcel would be allowed to operate the Allen S. King Generating Station and Unit 2 of the Sherburne County Station (Sherco 2) from June through August and from December through February, while idling the units during the remaining six months, unless required to meet reliability needs. Xcel had previously conducted a seasonal dispatch analysis and found that operating in this manner would save customers up to $1.453 million in 2020. The savings were projected to grow to as much as $3.484 million by 2023.

According to Xcel’s 2019 annual report, the company owned and operated nine coal plants (some with multiple units) totaling approximately 6,500 MW of net summer dependable capacity. Five units—including Sherco 2—had been approved for closure by 2027, and the company had proposed retiring two more units—including the King plant—in the 2028 to 2030 timeframe.

Xcel has been proactively cutting carbon emissions for years. The company claims to have been the first major U.S. electricity provider to set a company-wide goal of reducing carbon emissions by 80% from 2005 levels by 2030, and to target 100% carbon-free electricity by 2050. Xcel reported its largest one-year decline in carbon emissions in 2019, reducing carbon emissions 44% since 2005.

Xcel had estimated that seasonal operations of the King and Sherco 2 generating units would reduce greenhouse gas emissions by up to 4.1 million tons in 2020 with emissions continuing to decrease by as much as 7.3 million tons by 2023, relative to full dispatch operations. The decrease would be about one-fifth to one-quarter of the total 23 million tons per year of greenhouse gas emissions reduction needed to bring Minnesota into compliance with state statutes, which require reductions of 30% below 2005 emission levels by 2025.

—Aaron Larson is POWER’s executive editor (@AaronL_Power, @POWERmagazine).