As many U.S. power companies fight the federal Clean Power Plan, Xcel Energy took a different path Friday, declaring the utility's Minnesota operations are "nearly certain" to comply with the plan's greenhouse gas reductions through cost-effective investments over the next decade.
The strategy, which Xcel first laid out last year and firmed up in a regulatory filing late Friday, calls for $6 billion in wind and solar energy investment, retirement of two Minnesota coal-burning units, construction of a nearly $1 billion natural gas-fired generator and further investment to retain the carbon-free energy from its two nuclear power plants.
"We think it is a good business plan, period," said Laura McCarten, a regional vice president for the Minneapolis-based utility, as it submitted details to the state Public Utilities Commission.
McCarten said Xcel's analysis of the strategy, which speeds up wind and solar investment in this decade, shows it to be a cost-effective way to reduce greenhouse gas emissions by 60 percent by 2030 — likely beyond Minnesota's requirements under the Clean Power Plan.
Xcel also responded to concerns by state regulators about the ballooning cost of preserving its two nuclear power plants in Minnesota. The utility defended the projected investment of $1.2 billion or more over 15 years as cost-effective but said it is open to discussing early retirement of the Prairie Island nuclear plant in Red Wing, Minn.
The utility's positive outlook on the U.S. Environmental Protection Agency's Clean Power Plan comes two days after 61 utilities, including three Upper Midwest power cooperatives, petitioned the U.S. Supreme Court to block the plan after failing to win a stay in a federal appeals court.
The federal plan, announced in August, aims to reduce power-sector carbon emissions in 2030 by 32 percent from 2005 levels, a goal that could doom many coal power plants. States can draft their own compliance plans and have until late 2018 to finish.
Xcel isn't the first utility to say it can comply. Some in the Northeast that participate in a carbon cap-and-trade program also have declared they will meet carbon-reduction targets, said Jeff Deyette, a Boston-based energy analyst for the nonprofit Union of Concerned Scientists.