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Bill would offer ‘regulatory certainty’ to Xcel Energy’s nuclear power plants

Rick Evans, regional government affairs director at Xcel Energy, testifies before the House Job Growth and Energy Affordability Policy and Finance Committee April 16 in support of a bill sponsored by Rep. Marion O’Neill, right, that would establish a carbon reduction facility designation for large electric generating facilities. Photo by Andrew VonBank

A proposal to give Xcel Energy more certainty when it comes to how it spends money on projects to keep its three nuclear power plants running led to a nearly three-hour discussion Monday night.

As amended, HF3708 would offer “regulatory certainty to Xcel Energy,” said Rep. Marion O'Neill (R-Maple Lake), the bill’s sponsor.

The bill would allow Xcel Energy to work with the Public Utilities Commission on a proposed budget and get it approved prior to Xcel spending any money. Currently, a utility company will spend money on a project and then bring their rate case before the commission, which then determines if the company’s investments were prudent, O’Neill explained. The bill would bring the prudency decision earlier in the process.

The House Job Growth and Energy Affordability Policy and Finance Committee laid the bill over for possible omnibus bill inclusion. Its companion, SF3504, sponsored by Sen. Andrew Mathews (R-Milaca), is awaiting action on the Senate Floor.

"We believe this is a way to help create transparency and certainty. It's a way to help us make decisions about the smart way to go forward with the nuclear plants in our effort to keep them open through the end of their current license,” said Rick Evans, director of regional government affairs at Xcel Energy. “We think this is good for – obviously Xcel Energy – but we think it's good for customers. We think it's good for the communities where these plants are. We think it's good for our employees who work at these plants.”

The bill would still allow for the public comment period prior to the commission making its decision on Xcel’s budget and it doesn’t take away the commission’s ability to establish prudence, Evans added.

Representatives of the Minnesota State Building and Construction Trades Council, the cities of Monticello and Red Wing, and the Wright County Board of Commissioners all testified or wrote letters of support for the bill.

 

Commerce Department, environmental groups oppose bill

Deputy Commissioner Bill Grant said the Department of Commerce opposes the bill for a few reasons, including calling the lack of accountability to Xcel’s earlier commitments to cost control “troubling.”  Grant also called the bill “premature and potentially harmful to consumers who may be asked to assume higher than necessary costs for their vital electric service.”

The Minnesota Chamber of Commerce also opposes the bill, writing in a letter shared with House members that the Public Utilities Commission reviewing Xcel’s proposed expenditures ahead of time would not control costs as effectively as the after-the-fact review.

Environmental groups including the Sierra Club’s North Star Chapter also spoke out against the bill, saying it provides no certainty to customers, plant workers, communities where the plants are located nor carbon reduction.

Both DFL and Republican members expressed concerns about the bill as well.

Rep. Bob Vogel (R-Elko New Market) suggested they be more “creative” with the bill to include market discipline measures because he feels the way the bill is written it would “behoove” Xcel to estimate the cost of improvements at the high end.

Doing this could help give the bill “a little more legs” to get done this session, he said.

O’Neill plans to continue discussions about the bill and said there may be another amendment to the bill to “bring more peace in the valley.”


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