State energy watchdogs say Xcel’s megasolar project is too expensive
Xcel Energy has more to worry about than the deteriorating solar economy for its planned $575 million mega-farm in Becker, Minnesota.
The Minnesota Department of Commerce and the Minnesota Attorney General’s Office say the project is too expensive and has not been properly bid on, leaving taxpayers to pay too much for solar power.
Commerce and the AG office recommended that the Minnesota Public Utilities Commission (PUC) reject the Sherco Solar Project as currently structured.
The project’s cost per kilowatt-hour “is significantly higher than recent large-scale solar projects in the region,” the AG’s office said in a PUC filing. “If the project were approved, customers would be forced to pay hundreds of millions of dollars more over the life of the project than if Xcel had purchased competitively priced solar generation instead.”
Xcel rejects these conclusions.
“We believe our project has always been a well-priced project for our customers and provides great value for the energy transition,” said Christopher Clark, company president for Minnesota and the Dakotas. “We hope that as we provide more information to the Department of Commerce and the Attorney General, they will reevaluate.”
The Sherco solar project would help replace some of the energy lost when Xcel shuts down its three massive coal-fired generators at Becker, which will happen between 2023 and 2030.
The Commerce Department and the Attorney General’s Office said Xcel’s bidding process resulted in only three bids, including the company’s. The other two were discarded because they did not meet the tender requirements.
“Xcel Tender [request for proposal] was poorly designed, creating unnecessary limits that reduced the number of bids received and, therefore, likely inflated the overall price,” the Commerce Department concluded.
The attorney general’s office said Xcel “undermined” the competitive process by limiting the location of the project to Sherco’s site; and limiting ownership of the project to the company itself.
The Sherco project would use Xcel’s network interconnection rights and infrastructure at Becker – an advantage, according to the company. With these links in place, the project would avoid the lengthy and potentially costly delays that often accompany connecting to the regional grid.
And federal rules require Xcel to own any project using existing network interconnection rights at Sherco, the company said.
“We have valuable transmission rights in Sherco factories,” Clark said. “We have to own this project.”