Xcel Energy gets the go-ahead to expand its Renewable Connect program in Minnesota
Energize Weekly, August 21, 2019
Xcel Energy has received approval from the Minnesota Public Utilities Commission to turn its Renewable Connect pilot into a full-time program and merge it with another of the company’s renewable programs, Windsource.
Xcel plans to add 180 megawatts (MW) of wind generation and 50 MW of solar for the program under which customers pay a premium, a so-called green tariff, to help promote the development of renewable generation.
“There is significant demand for additional capacity and different subscription options,” the utilities commission concluded.
In its filing to the commission, Xcel said it had a waiting list of 400 residential customers for its Renewable Connect program and 2,200 for Windsource.
Renewable Connect was begun as a test program in 2017 and now serves more than 3,000 residential customers and about 150 commercial and industrial customers.
The power is supplied by a 50 MW Minnesota wind farm and a 25 MW Minnesota solar facility, the company said.
Under the program, customers buy blocks of clean energy generation with the average cost ranging from $3.27 to $3.60 a month depending on the length of the contract. The program offers a monthly charge, a 5-year contract and a 10-year contract.
That charge is offset by a fuel-cost credit since Renewable Connect customers are getting their electricity from wind and solar, which brings the monthly cost down to less than $1, according to the company.
The cost of fuel varies with market prices, so the net Renewable Connect charge will vary, Xcel said.
The program has been attractive to companies seeking to meet their own clean energy targets, and 10 large customers have reserved spots for the expanded program, according to the Minneapolis Star Tribune. These include Uponor North America, a pipe maker; Tennant, a cleaning equipment manufacturer; and the city of St. Louis Park. Uponor and St. Louis Park are already in the Renewable Connect contracts.
While the utilities commission said it was approving Xcel’s proposed program structure and its terms and conditions, it called for “several modifications.”
Among the biggest of those was a limit to the length of contracts. The current program has 5- and 10-year contracts, but Xcel was proposing lengths of up to 20 years. The commission held the length at 10 years.
“Although it is understandable that some large commercial and industrial customers prefer a longer term with fixed costs, Xcel has not demonstrated that those customers would drop out of the program, or that the committed resources would otherwise go unsubscribed, if 15- and 20-year contracts are not offered,” the commission said.