North Dakota Refuses Endorsement of Xcel Energy's Solar Projects

North Dakota Refuses Endorsement of Xcel Energy's Solar Projects

BISMARCK, N.D. (AP) - North Dakota utility regulators on Wednesday renewed their opposition to having the state's ratepayers subsidize solar-generated electricity projects in Minnesota to satisfy that state's mandate to get some power from the sun.

Minneapolis-based Xcel Energy Inc., which has about 90,000 customers in North Dakota, is backing a $250 million solar project in southern Minnesota that would create 100 megawatts of power, or enough to power about 15,000 homes. The project is part of Minnesota's mandate that investor-owned utilities get 1.5 percent of their power from the sun by 2020, and 10 percent by 2030.

North Dakota law allows utilities to seek an advance review, called a "determination of prudence," of whether regulators believe a project is a good idea and companies can charge ratepayers to help fund it.

The three-member, all-Republican North Dakota Public Service Commission voted against endorsing the project, saying North Dakota customers shouldn't get stuck with paying for expensive and unneeded solar-generated electricity from neighboring Minnesota.

"This just doesn't cut the mustard by any means," Commissioner Brian Kalk said. "This isn't an anti-solar message, it's just not prudent."

The Public Service Commission's action Wednesday was the second time this year that the panel shot down Xcel Energy's plans for solar projects. In June, the commission failed to endorse a 187-megawatt solar project that would power about 41,000 homes. The cost of that project has not been disclosed by the company.

Xcel estimated that North Dakota customers would use about 5 percent of the power from the project under review Wednesday, and it wanted the state to share in 5 percent of Xcel's cost of purchasing the power. Edina, Minnesota-based Geronimo Energy would build the Aurora Solar Project, and Xcel has agreed to purchase power over a 20-year period. Xcel and state regulators estimated that the project would add $62 million more in electricity costs over that time for ratepayers in the states served by the company.

"In this case the causer of the cost is the Minnesota mandate," said Julie Fedorchak, who heads the Public Service Commission. "North Dakota customers should not have to be paying for this solar project."

David Sederquist, an Xcel senior regulatory consultant, said the two projects that did not get the nod from North Dakota regulators will move forward, with completion slated for late next year.

Sederquist said Minnesota regulators already have approved cost-recovery charges from ratepayers on the projects. The company also will seek cost-recovery charges from ratepayers in South Dakota, Michigan and Wisconsin, once the projects are built.

"We won't seek cost recovery in those states until the projects go into service," Sederquist said. "North Dakota appears to be the only state that has taken issue with it so far."

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