Oct 14, 8:53 AM EDT

Regulators approve Xcel plans to retire coal-fired units

MINNEAPOLIS (AP) -- State utility regulators have approved Xcel Energy's plans to retire two of the three units at Minnesota's largest power plant by 2026, a move that will eliminate the state's largest emitter of greenhouse gases.

However, the Public Utilities Commission on Thursday rejected Xcel's plans to add new natural gas generation at the Sherco plant and directed the Minneapolis-based utility to submit a plan for replacing a large chunk of the lost coal generation, the Minneapolis Star Tribune reported (http://strib.mn/2edcQ9A ).

The PUC asked Xcel to look more closely at renewable energy alternatives - along with the gas plant - to help compensate for the loss of the Sherco coal plants. Regulators also asked the utility to consider measures to reduce customer energy use.

That pleased environmental groups such as Fresh Energy.

"We think this is really good policy," said J. Drake Hamilton, science policy director for the St. Paul renewable energy research and advocacy group. "It acknowledges state law, which says the commission cannot approve a new fossil fuel plant unless it is in the public interest."

State Rep. Jim Newberger, R-Becker, criticized the PUC's decision not to commit to a natural gas unit, saying in a statement that it "will mean ongoing uncertainty for the plant's workers and local community for the foreseeable future."

The PUC determined that there will be a need for about 750 megawatts of power when the second Sherco coal generator is closed. Xcel's proposed 786-megawatt "combined cycle" gas-fueled plant would use gas and steam turbines to produce electricity more efficiently than just gas alone.

Xcel took that finding to mean it's on the right path with a new natural gas plant in Becker.

"Today's decision gives a clear path as we advance our filing for a gas combined cycle unit at the (Sherco) site, which we are confident is the best resource for our customers and the reliability of our system," Chris Clark, president of Xcel's Minnesota operations, said in a statement.


Information from: Star Tribune, http://www.startribune.com

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