Xcel Energy–the most abusive special interest in Minnesota?

Action Alert:  Oppose Xcel Energy ripoff legislation

Is Xcel really the worst?  It’s hard to say–there are so many candidates.  The Minnesota Chamber of Commerce?  3M?  The shadowy interests behind PolyMet and Twin Metals?

From where I write, in Red Wing, which is some sort of ultimate Xcel “company town,” there’s just no contest.  And for someone with a history of working on waste and energy issues, living in a community (nice as it is in many other ways) rendered so bereft of dignity and integrity by it’s servile relationship with Xcel can be painful.  (Of course, the locals don’t seen it that way–they are so used to being told what to do and what to think that they don’t notice.)

Info on Xcel’s latest foray is below, Senate File 3504 /House File 3708 (they are identical).

To see the abuses of Xcel on a larger playing field, one needs to visit the MN Public Utilities Commission and/or the state Legislature.  A puppet show on a different scale entirely.

A few things I’ve written here in the past might be useful or at least entertaining background:

https://alanmuller.com/minnesota-a-wholly-owned-subsidiary-of-xcel-energy-1-in-a-series/

https://alanmuller.com/action-alert-another-inexcusable-giveaway-to-xcel-energy/

https://alanmuller.com/areva-nuclear-scandal-casts-doubt-on-the-safety-of-the-prairie-island-i-and-ii-reactors/

https://alanmuller.com/integrated-resource-planning-and-why-doesnt-minnesota-have-it/

https://alanmuller.com/do-nuclear-waste-dumps-again-threaten-minnesota/

https://alanmuller.com/another-utility-only-public-gagged-energy-commission-meeting-march-3rd/

So, Xcel Energy has three nuclear power units, the only ones in Minnesota.  They were all built in the 1960s/1970s and are old, rickety, dangerous, and expensive.  The are not much needed for the electricity they produce but are highly efficient and effective for separating Xcel’s ratepayers from their money.

Over the last decade or so hundreds of millions of dollars have been poured into these units, for “uprates” (running them at higher output than originally designed for, but cancelled in the case of the two Prairie Island reactors) and license extensions (running them 20 years longer than originally promised).  Xcel is allowed to charge ratepayers a high and guaranteed rate of return on these investments, often above ten percent, so has an incentive to spend as much as possible.

Now it’s time for another big reach into our pockets to feed the nukes.  Behold Senate File 3504/House File 3708 (they are identical) introduced on March 15th and 12th 2018.  These bills rename the nukes “carbon reduction facilities” and would create a whole new bill category called a “carbon reduction rider” to pay for them.  Ratepayers and their advocates would have very limited rights to effectively object.

These bills are such gross ripoffs that some Minnesota NGOs, often comfortably snuggled up with Xcel, are objecting.  These include “Fresh Energy,” AARP, “Citizens Utility Board” (CUB), Energy Cents Coalition, and Citizens Federation–Northeast.

The problem is that they, like the Star Tribune, seem to be accepting the basic argument that the nukes deserve a giant infusion of our cash to keep them going.  They are only complaining about the oppressive details.  For instance, Fresh Energy says:

“While Fresh Energy believes it is potentially economically and environmentally beneficial to keep Xcel Energy’s nuclear plants open until the end of their federal license, a blank check is not the way to do it. The bill provides no guardrails to ensure these investments are prudent. We support pursuing a comprehensive analysis at the Minnesota Public Utilities Commission of what it may take to keep these plants operating another 15 years.”

A joint letter from several orgs, likely written by CUB, raises various objections to the bills as they stand, but doesn’t object to the basically problematic concept of “special processes for cost recovery of nuclear facilities.”  This suggests that in advocating on this issue and these bills, people should be wary of dealmaking and sellouts.  It’s happened before.  For a disgraceful example, CUB rolled over on Xcel legislation allowing it to build a fossil-fuel plant in Becker without the usual regulatory review.  Likewise, “Fresh Energy” rep J. Drake Hamilton has been going around giving “how great they are” presentations about Xcel.  Can objections from “Fresh Energy” be taken seriously?

In spite of all this, the news on future energy sources is basically good.  Wind is cheapest and getting cheaper.  Cost of solar is dropping rapidly.  “Storage” of various kinds, such as giant batteries, can deal with the intermittency of wind and solar.  There is no reason why carbon emissions and electric bills can’t go down together.  But it obviously won’t happen if Xcel and other utilities are allowed to keep on driving the train.  From an industry source, January 8, 2018

  • An Xcel Energy resource solicitation received more than 400 individual proposals, the utility reported last month, including what may be record-low prices for renewable energy paired with energy storage. 
  • The median price bid for wind-plus-storage projects in Xcel’s all-source solicitation was $21/MWh, GTM Research’s Shayle Kann noted on Twitter, and the median bid for solar-plus storage was $36/MWh. Previously, the lowest known bid for similar solar resources was $45/MWh in Arizona.

This is much cheaper than even old-nuke power and illustrates the foolishness of dumping more money into them.  Note also that these are for “power purchase agreements” and do not involve any rate-base-inflating capital investment by Xcel.

(Aside, we can note that since around 2010, while the actual wholesale cost of fuels and electricity has dropped, Xcel has received multiple large, unjustified rate increases and Minnesota now has above-average electricity rates. Right-wing policy shops like the Center of the American Experiment blame this on investment in “renewable energy.”  This is not the case.  The cause is the chokehold that Xcel and other utilities have on regulators, legislators, and NGOs.  So far as I have seen, only Attorney General Lori Swanson has offered much opposition, and that has been rather low-key.)

So yes, these two bills are horrible.  They probably have some throwaway aspects Xcel is prepared to give up to encourage rollovers.

The bigger picture is that Minnesota needs to start regulating its utilities in the public interest, not allowing the utilities to twist and distort policies to the benefit of their management and stockholders but at high cost to the public.  We need a PUC and a Legislature with backbone and integrity.

SF 3504 was to be heard March 22nd, but many concerned citizens showed up and the hearing was postponed to March 27th (Tuesday), scheduled for 01:00 PM in Room 1150 Minnesota Senate Bldg.  Energy and Utilities Finance and Policy Committee

If you would like to speak, contact Committee Administrator Darrin Lee at 651-293-2962 or darrin.lee@senate.mn.

Three of the 10 committee members, including the Chair (Osmek)  are bill sponsors and one (Goggin) is an Xcel employee.  Don’t assume you will be treated respectfully or that the meeting time and place won’t be moved around to frustrate citizens.

HF3708 has been referred to the House Job Growth and Energy Affordability Policy and Finance committee but as far as I know no hearing has been scheduled.

“A kakistocracy (/ˌkækɪsˈtɒkrəsi, –ˈstɒk-/) is a system of government which is run by the worst, least qualified, or most unscrupulous citizens.”

Alan Muller

 

 

 

 

2 Responses to Xcel Energy–the most abusive special interest in Minnesota?

  1. Legalectric March 23, 2018 at 11:07 #

    Isn’t it “caca-stocracy?”

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