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ke-power: Proposal follows 2001 legislative deal
<br /> continued from previous page at discussions" with transporters needs more data, information,
<br /> about delivery routes. No de- analysis and comment before it
<br /> the briefing papers. tailed analysis has been per- can make a decision.The Com-
<br /> Xcel proposes re-powering three metro The Commission received a formed. Commission staff sug- mission has asked for answers to
<br /> very large number of public corn- Bested the record should also in- a list of 26 questions as it consid-
<br /> coal-fired power plants with natural gas ments from numerous groups,in- dude an analysis of potential ers the proposal.It is taking corn-
<br /> chiding over 200 letters, 300 economic impact on all natural moils on the proposal until
<br /> postcards and 400 other fax/let- gas customers. Wednesda 28.2
<br /> The Legislature isn't the only commission staff,because the de- bilitated. Estimated project cost y.May_8,-001.
<br /> place where energy Ints addition, by the Sierra idua. Staff believes the Commission
<br /> p gy policy is de- cisions it is required to make in is $392 million. The work will In addition, over 80 individual
<br /> bated:the Minnesota Public Util- the re-powering case are the extend the life of the plant for an- comment letters,as well as com- — -ities Commission is currently types of decisions normally made other 25 years while providing ments from more than 20 neigh-
<br /> hearing a case that pits reduced in resource plans, competitive 571 MW of capacity,an increase borhood groups,were submitted.
<br /> emissions against lower-priced bidding, certificate of need and of 60 MW. Among those commenting:
<br /> power. rate case proceedings, but with- •High Bridge:replace existing The Minnesota Pollution Control
<br /> In 2001,the Legislature passed out the benefit of the formal units 5 and 6 at this coal-fired Agency concluded there were
<br /> the Emissions Reduction Rider structure,information and analy- plant with two natural gas corn- many benefits to the project, in-
<br /> into law.That law has led to an sis generally followed in those bined cycle units,for 515 MW of eluding those that are not direct-
<br /> Xcel Energy petition, presented proceedings. capacity, a jump of 244 MW. ly quantifiable." The Environ-
<br /> to the Minnesota Public Utilities Projects must be installed on Cost of$412 million. mental Quality Board said the
<br /> Commission, to switch three of existing large electric generating •Riverside:re-power unit 7 at Commission's externality values
<br /> its Twin Cities area power plants plants not subject to emissions this coal-fired plant with two nat- "greatly underestimate the health
<br /> from burning coal to natural gas. limitations under the Clean Air ural gas combustion turbines op- and environmental benefits of the
<br /> The political maneuvering that Act.The Commission is required crating in combined-cycle.Retire proposal."The Office of the At-
<br /> led up to passage of the 2001 law to consider whether the project unit 8. Eliminate coal emissions tomey General questioned the
<br /> was noted by the Sierra Club in achieves environmental benefits while increasing capacity by 53 rate of eturn on the project.
<br /> comments to the Commission, without unreasonable consumer MW to 439. The Metropolitan County En-
<br /> when it pointed out the emissions costs. The three plants alone repre- ergy Task Force said it was con-
<br /> reduction rider, sought by envi- Xcel has proposed to reduce sent almost half the SO2 released cemed with the rapid expansion
<br /> ronmental interests,was a trade- emissions at the King, High by electric utilities in the state of natural gas-fired electric gen-
<br /> off for Xcel's requested property Bridge and Riverside plants,for a and nearly a quarter of SO2 emis- eration across the country and its
<br /> tax relief. total projected capital cost of sions overall.The projects would impact on the price for natural
<br /> The legislation allows the $1.044 billion. Of this amount, reduce SO2 emissions from the gas. While there are benefits to
<br /> Commission to approve a utili- $781 million would be recovered plants by 93 percent,NOx by 91 converting coal-fired facilities to
<br /> ty's recovery of qualifying emis- from Minnesota ratepayers. The percent and mercury by 76 per- natural gas, issues associated
<br /> sions reduction projects outside cost, according to MPUC staff cent. with the volatility of energy
<br /> of a general rate case.The ques- briefing papers,amounts to$620 If completed, the projects prices,the availability and cost of
<br /> tion is somewhat muddled,noted per kW-installed. would increase the contribution future gas supplies,the need for
<br /> Xcel's authorized rate of re- of gas in Xcel's overall fuel mix additional investment in natural
<br /> turn is 11.47 percent on common from 7 percent to 20 percent. gas infrastructure and the overall
<br /> equity. The projects would result in a impact on the utility's ability to
<br /> Xcel's proposal involves re- rate increase of 12.7 percent, or maintain a reliable and affordable
<br /> building or rehabilitating about $5.48 for the average residential energy supply should be exam-
<br /> 1,100 MW of capacity, adding customer per month. "This im- fined.
<br /> 385 MW of new capacity, for a pact is claimed to be moderated In recent dockets the Commis-
<br /> total of about 1,485 MW of ca- when the effects of avoided costs sion has expressed particular in-
<br /> pacity.Work proposed includes: are considered.resulting in a net terest in information related to
<br /> • King: install state of the art increase of 7.5 percent or$3.27 natural gas prices,supply and Ca-
<br /> pollution control equipment, in- per month for the average rest- pacity. The transport, capability,
<br /> eluding selective catalytic reduc- dential customer," according to supply and price of natural gas
<br /> tion on the base load coal-fired
<br /> are critical to the viability of the
<br /> plant. Boilers will also be reha- Re-pewee:See facing page project.To the extent that the as-
<br /> sumptions regarding natural gas
<br /> are questionable, so too is the
<br /> plan,noted MPUC staff.
<br /> Due to the extensive use of
<br /> natural gas for other purposes,its
<br /> use as a fuel for the generation of
<br /> electricity can have significant
<br /> ceconomic impacts that are not
<br /> aptured in the company's analy-
<br /> sis. Xcel said it had only"getter-
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