Clean Energy Plan Retires Sherco 1&2 and is Clear Winner for Xcel Customers

New analysis shows that Minneapolis-based Xcel Energy can reduce costs and harmful air pollution by retiring two units at the Sherburne County Generating Station (Sherco) coal-fired power plant. Sherco is the largest soot and carbon polluter in Minnesota. The Clean Energy Plan continues investment in energy savings, wind and solar power – cost competitive resources that grow jobs and investment in local Minnesota communities.

Sherco Coal Plant in Becker, MN - Minnesota’s largest carbon polluter

Sherco Coal Plant in Becker, MN – Minnesota’s largest carbon polluter

For the first time, clean energy organizations were able to use industry-standard modeling and Xcel Energy’s data to develop the Clean Energy Plan alternative in response to Xcel’s resource plan.

Using the same data and model as Xcel, the Clean Energy Plan retires Sherco 1&2 in 2021 and 2024 respectively, increases energy savings to the state goal of 1.5% each year, continues to build out solar and wind energy, and saves Xcel customers money. Compared to Xcel’s preferred plan, the Clean Energy Plan achieves significantly more pollution reductions, reduces regulatory risk, maintains system reliability, and provides certainty in planning for Sherco 1&2 retirement and replacement – all while being less expensive. The Clean Energy Plan protects our health and Minnesota’s lakes, rivers and air from harmful pollution and climate change.

“This new plan shows that Xcel is out of excuses for not retiring the state’s largest polluting coal plant,” said Fresh Energy’s science policy director, J. Drake Hamilton. “The years of avoided pollution will mean years of improved health for Minnesota communities and millions of tons of carbon pollution that will never enter our atmosphere.”

The Clean Energy Plan – supported by the Minnesota Center for Environmental Advocacy, Fresh Energy, Sierra Club, Wind on the Wires and the Izaak Walton League of America’s Midwest Office – was developed using the same modeling data that Xcel Energy itself used in crafting its resource plan for state regulators in January 2015.

In December of 2013 the Minnesota Public Utilities Commission voted unanimously to require Xcel Energy to analyze retirement of Sherco 1 and 2 by 2020. Xcel filed a preferred plan, however, that continued to rely on operation of Sherco 1 and 2 over the next two decades. Over 10,000 Minnesotans called on the Public Utilities Commission and Xcel Energy to phase out coal at Sherco 1 and 2 during Xcel’s last energy resource plan.

By ceasing operations at Sherco 1 and 2, Minnesota would avoid emissions of 11-12 million tons of carbon pollution from 2016-2030, as compared to Xcel’s proposal. This avoided carbon pollution will help reduce health and environmental costs by approximately $1.2 billion, based on federal measures of the damage carbon pollution causes. Reducing coal burning also lowers levels of other pollution that will help improve air quality, reduce mercury contamination in lakes, rivers and streams, and protect people from lung and heart diseases.

While mirroring the Xcel resource plan in terms of wind, and solar, the Clean Energy Plan includes significantly more investment in energy efficiency than Xcel’ proposed plan.

“The cheapest form of energy is the energy you don’t use,” said Michelle Rosier, senior campaign and organizing manager at the Sierra Club. “It’s time for Xcel to focus more heavily on cutting waste out of their system and reducing the burden of utility costs and the harm caused by importing and burning millions of tons of coal each year.”

Specifically, the Clean Energy Plan would retire Sherco 1 and 2 in 2021 and 2024, respectively. The Plan relies on capacity additions recently approved by the Public Utilities Commission along with additional energy efficiency, solar and wind to supply the power in the absence of the retiring plants. The Plan also includes, in the later years, the addition of smaller natural gas plants used to meet peak demand. Plan supporters expect, however, that newer technologies such as energy storage and solar will be cost-competitive with the gas units for base load power in a decade and will likely significantly reduce the use of gas in the Plan.

sherco02

“Wind and solar costs are dropping dramatically while fossil fuel prices increase,” said Beth Soholt, executive director of Wind on the Wires, “The Clean Energy Plan is in the best interest of Xcel and its customers by transitioning beyond coal at Sherco 1 and 2 and growing wind, solar and energy efficiency in Minnesota.”

While the Clean Energy Plan includes natural gas and coal in the near term, the utility sector is moving toward 100 percent clean energy and this plan does not preclude Xcel from continuing its transition beyond fossil fuels in the next resource plan. Xcel and other stakeholders can reply to this new plan by September 2, before the Public Utilities Commission makes a decision on Xcel’s 15 year energy resource plan later in the year.

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