Minn. Judge: Solar Beats Natural Gas for Utility Procurement
In what is being called an unprecedented decision, solar energy went head-to-head with natural gas in a competitive evaluation for utility resource planning — and solar came out on top.
Xcel Energy demonstrated need for 150 MW of new electricity generation by 2017 (and possibly 500 MW by 2019. Office of Administrative Hearings (ALJ) to look at several proposals to decide “the most reasonable and prudent strategy” to meet Xcel’s needs. Three of the five proposals received dealt with natural gas as the energy source, one offered solar in a rather unique way.
The solar project encompasses roughly 20 different commercial-sized sites (2-10 MW) adding up to 100 MW, sized to offset roughly 20 percent of the existing load at each respective substation. The cost for the 100 MW project was $250 million. Using computer models, the ALJ’s administrative law judge Eric Lipman compared each proposal against each other, gauging cost savings, fuel consumption, pollutants emitted, and other factors, and then added a number of contingencies for mandated CO2 reductions, market pricing fluctuations for each energy source, and both short- and long-term demand projections — as well as the mandated RPS and solar carve-out. Lipman also added criteria to be “compatible with protecting the natural and socioeconomic environments, including human health.”
Lipman decreed that in the short-term “the greatest value to Minnesota and Xcel’s ratepayers is drawn from selecting Geronimo’s solar energy proposal.” When properly analyzed under either a LCOE or strategist modeling, the solar submission was the lowest cost resource proposed.
Responding to the ruling, Xcel issued a statement saying it appreciates the work of the ALJ toward resource acquisitions but it “disagree[s] with some of the findings and recommendation,” and the company pledged to file a complete response once exceptions are filed with the commission.