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Xcel Energy utility proposes seasonal dispatch for 2 Minn. coal plants

Xcel Energy Inc. utility Northern States Power Co. plans to offer power from its last two coal-fired plants in Minnesota into the Midcontinent Independent System Operator Inc. on a seasonal basis as part of a strategy to cut operating costs and carbon emissions, according to a filing with the Minnesota Public Utilities Commission.

The Minneapolis-headquartered utility has requested approval to move to "seasonal dispatch" at the 511-MW Allen S. King facility in Washington County and Unit 2 of the 2,238-MW Sherburne County Plant (Sherco), described in the filing as Sherco 2.

Xcel Energy plans to suspend normal operation at King during nonpeak seasons as early as March and to suspend normal operation at Sherco 2 during nonpeak seasons beginning in September.

Under Northern States Power's "Unit Commitment Plan," the plants would be idled during the "shoulder months" of March, April and May, as well as September, October and November in 2021, 2022, and 2023.

"By idling a plant, utilities retain the ability to restart units if there is a need for system reliability or other critical activity," the utility said. "[M]oving to a seasonal commitment provides additional certainty for operations and opportunities for reduced [operations and maintenance] and capital expenditures at the plant as well as reduced carbon emissions. The ultimate goal is to optimize the remaining life of these coal units."

The King facility began operation in 1968 and Unit 2 of Sherco 2 came online in 1977, according to S&P Global Market Intelligence. Sherco 2 is slated for retirement in 2023 and King is scheduled to retire in 2037, though the utility has proposed accelerating that to 2028, according to the filing.

The company said it would only operate the facilities during these seasonal suspensions if it were required for reliability.

Northern States Power also noted it has received commission approval to add approximately 2,000 MW of wind resources in the 2019-2021 time frame. "Other utilities in the region are also expected to add significant amounts of renewable resources as demonstrated by the amount of interconnection requests in the MISO queue," the utility said. "We expect that these additions of renewable resources in the region will allow for more cost-effective utilization of our existing coal generators if we adjust their operating practices."

The company acknowledged, however, that "there is some risk that the cost impacts and the environmental benefits of our Unit Commitment Plan may not materialize as anticipated."

"We intend to monitor actual savings impacts throughout the year and perform a validation at year end," the Xcel Energy utility said. "If actual impacts do not result in benefits to our customers, we will consider modifications to our plan. However, if our Unit Commitment Plan results in benefits, we will look for opportunities to expand seasonal operations to include other generation facilities or longer periods when units are idled."