Nuclear cost oversight of Xcel stays in place after Minnesota House kills bill to change it

Legislation that would have changed the state's approval process for Xcel Energy's nuclear power investments — a measure opposed by consumer and business groups — has died in the Minnesota House.

The legislation would have essentially allowed Minneapolis-based Xcel to get upfront approval from utility regulators for its nuclear expenses, instead of approval after those investments are made. The Senate passed the bill last week by a vote of 37-29, but it never got out of the House.

The utility says the measure would have given it more certainty in recovering at least $1.4 billion in maintenance costs it expects over the next 17 years at its nuclear reactors near Monticello and Red Wing. Critics have claimed the legislation would give Xcel an incentive to aim high on its estimates, in case of any future cost overruns.

"There are a lot of different folks across the political spectrum who had concerns about the bill and that likely led House leadership to not bring it to a vote," said Cam Winton, director of energy and labor/management policy at the Minnesota Chamber of Commerce, which opposed the legislation.

Xcel said time ran out on the House bill as the legislative session ended Sunday.

"We're disappointed the bill did not move forward due to time constraints at the Legislature, but we will continue to pursue our clean energy vision that will deliver 85 percent carbon free electricity to our Minnesota and Upper Midwest customers," Xcel said in a statement.

Xcel's goal of 85-percent carbon-free energy by 2030 is partly contingent on nuclear power, which isn't a significant source of carbon emissions. While wind energy will make up the bulk of that 85 percent, one-third of it would come from nuclear.

Besides the Chamber of Commerce, a group of Xcel's large industrial customers opposed the bill — including Flint Hills Resources, owner of a big oil refinery in Rosemount. The Citizens Utility Board of Minnesota, a consumer advocacy group, also fought the bill. They all feared it would shift risk from Xcel's shareholders to ratepayers.

"I think what you saw is that so many stakeholders had issues with the bill," said Matt Privratsky of Fresh Energy, St. Paul-based advocacy group for renewable energy, which opposed the legislation though not nuclear power in general.

Under the legislation, Xcel would have submitted its costs for nuclear-related improvements in a special proceeding to the Minnesota Public Utilities Commission (PUC). That would have been outside the current procedure for nuclear power plants, as well as coal and natural-gas fired power plants.

Opponents feared a dilution of the PUC's authority, and Gov. Mark Dayton had threatened to veto the legislation for that very reason. The amended version of the bill passed by the Senate strengthened the PUC's hand over earlier versions.

Xcel needs to invest at least $1 billion at its Prairie Island nuclear reactors near Red Wing by 2033 and 2034, the years in which their federal licenses expire. Monticello's sole reactor needs about $420 million in investments from 2021 through its license expiration in 2030.

Mike Hughlett • 612-673-7003