Xcel proposes almost $3B energy investment plan to fight COVID job losses and reach clean energy goals
In response to the COVID-19 devastating impact on jobs, Minnesota-based utility Xcel Energy has proposed a nearly $3 billion energy investment package which would add solar, wind and efficiency projects while creating thousands of jobs if approved by regulators.
Xcel has proposed the projects to the Minnesota Public Utilities Commission, calling it one of the largest package of energy investment projects in state history. It also would help the utility reach its goal of wider clean energy adoption.
“COVID-19 put the brakes on our economy, leading to widespread unemployment and we are eager to help Minnesota with our proposal that can help provide the economic jump start our state needs.” said Ben Fowke, chairman and CEO, Xcel Energy. “We thank Governor Tim Walz, our regulators and commissioners for the leadership on this issue and remain committed to working with them along with our, communities, policymakers, stakeholders and employees to move these projects forward quickly to help all Minnesotans.”
On the renewable generation side of the package, Xcel proposes to speed up the addition of about 460 MW in solar power capacity next to its Sherco coal-fired plant in Becker, Minnesota. Xcel estimated that the work could create from 230 to 350 union jobs and provide carbon-free power for more than 240,000 homes.
The Sherco (Sherbourne County) Unit 3 will be closed by 2030, according to previous reports. Units 1 and 2 are marked for closure by 2023 and 2026, respectively.
Xcel also wants to rebuild aging wind farms with new technologies and add new turbine projects in the state. The utility says this effort would create hundreds of new jobs as the wind capacity is upgraded and expanded.
Energy conservation and efficiency programs would be expanded, too, including direct rebate payments to customers struggling to pay for new equipment. Xcel proposes to spend twice the state requirement on assistance programs for low-income customers.
Additional investments would focus on transmission, distribution, natural gas and electric vehicle infrastructure projects, including building electric vehicle charging stations for fleets and the public.
“As we join the Minnesota Public Utilities Commission in its effort to aid in Minnesota’s economic recovery, we’ve proposed projects that will bring significant system benefits, accelerate the economy and advance our plans to reduce carbon emissions,” said Chris Clark, president, Xcel Energy-Minnesota. “Xcel Energy is proud to be part of the Minnesota community, and we are in a strong position to create a pipeline of jobs by moving forward with projects across the state that will accelerate economic growth while advancing our goals as we continue to lead the clean energy transition.”
With the COVID-19 pandemic pinching both Minnesota and the nation economically, many utilities have cut disconnection programs for non-payment. Xcel noted that it also has lowered electric bills statewide by about $25 million this summer, a reduction helped by lower natural gas prices.
In addition to these proposals, Xcel Energy is also using the $20 million net gain from selling the Mankato Energy Center to support short-term and long-term corporate giving, including COVID-19 relief in all the states it serves. Colorado-based Southwest Generation acquired the 760-MW combined cycle gas turbine plant for $680 million in April.
Xcel Energy bought the Mankato Energy Center in a deal closed only earlier this year, but wanted to use sell proceeds to help fund coronavirus response efforts.