Xcel Energy (NYSE:XEL) has submitted a proposal for adding up to three natural gas-fired “peaking” units – one in Burnsville, Minn., and two near Hankinson, N.D. – as the best way to meet customers’ needs during times of high electricity demand.
The proposal was submitted in response to proceedings before the Minnesota Public Utilities Commission on Xcel Energy’s Upper Midwest Resource Plan. Those proceedings concluded the company will need to add 150 megawatts of new power resources in 2017 and up to another 350 megawatts by 2019.
“Our proposal responds to our customers’ need for power that can be brought on line quickly and efficiently to meet demand when it’s highest,” said Judy Poferl, president and CEO of Northern States Power Co.-Minnesota, an Xcel Energy company. “Further, our proposal provides flexibility to allow us to add resources only if they’re needed.”
Regulators in Minnesota and North Dakota will review the company’s proposal and proposals from other parties also being submitted to determine which offering presents the best deal for customers.
“Through the resource planning process, we work with stakeholders and regulators to ensure we choose the most appropriate and cost-effective resources to meet our customers’ needs for reliable, clean electricity,” Poferl said. “While we continue to expect overall growth in customer electricity usage to remain flat, the recent resource planning process identified a need for some new resources to be available at peak usage times.”
Specifically, Xcel Energy proposes placing a 215-megawatt combustion turbine in service in 2017 at its Black Dog power plant in Burnsville, substantially replacing the plant’s coal-fired generating capacity, which is scheduled to be retired in 2015.
“This would allow us to use existing buildings and transmission lines, and also would reinforce generation within the Twin Cities, which enhances reliability,” Poferl said.
The second and third 215-megawatt combustion turbines, if needed, would be located at a yet-to-be selected site near Hankinson, N.D., which is about 70 miles south of Fargo, and placed in service in 2018 and 2019. The units would take advantage of nearby transmission and natural gas lines.
“Xcel Energy serves approximately 90,000 electricity customers in North Dakota, the majority of them in the greater Red River Valley, including the communities of Fargo and Grand Forks,” Poferl said. “Our proposal would enhance the geographic diversity of our fleet.”
Xcel’s filing in Minnesota includes a request for a Certificate of Need for the Burnsville unit. A filing also is being made with the North Dakota Public Service Commission seeking approval for the two units proposed in that state.
The resource acquisition process now under way is the first in many years for resources other than wind power. A separate request for proposals for new wind generation is pending and is not affected by the proposals submitted in response to the Resource Plan proceeding.