Search results for: e21 initiative

Xcel Energy, Minnesota Power, Center for Energy and Environment, George Washington University, and other stakeholders participated in the first e21 Initiative meeting on February 28. The e21 Initiative aims to develop a new or adapted regulatory framework that addresses the challenges of the evolving energy economy and shifting technological landscape. There will be three phases for this effort.  The first will be stakeholder meetings where participants will discuss specific and practical steps to accomplish the objectives summarized here.  In the second phase, participants will focus on developing recommendations for modifying the statutory and regulatory framework in Minnesota, with a focus on the utility business model. In the third phase, participants will address implementing the action steps identified in the second phase. The e21 Initiative will be moderated by the Great Plains Institute. Stay tuned for additional blog posts and monitor the Great Plains Institute’s website for additional information.

Today, Northern States Power Company, d/b/a Xcel Energy, submitted a filing to initiate a discussion with the Minnesota Public Utilities Commission regarding the recently released e21 Phase I Report (see our blog post here).  Key components of Xcel Energy’s proposal to begin implementing the e21 Initiative’s vision include:

  • Lead the effort to achieve carbon reduction by 40% by 2030;
  • Advance distribution grid modernization;
  • Provide customers, including energy-intensive trade exposed customers, with a platform of innovative service and product offerings; and
  • Implement a new regulatory framework.

This last point was addressed at length in the e21 Phase I Report.  There, e21 stakeholders proposed significant reform to both the integrated resource planning and rate case regulatory processes.

Today marks the release of the highly anticipated report from the Minnesota e21 Initiative (e21 stands for 21st Century Energy System).  The Great Plains Institute assembled a diverse range of stakeholders, including utilities, ratepayer advocates, environmental advocates, and independent power producer advocates, to discuss regulatory reform in Minnesota to accomodate anticipated changes to our energy system.  The e21 Phase I Report can be found here.  A brief summary of the e21 Recommendations is as follows:

(A) Allow a multi-year, performance-based regulatory framework for utilities that wish to opt-in.

(B) Require utilities that opt into a multi-year, performance-based framework to file a comprehensive Business Plan (covering up to 5 years) consistent with a 15-year (or longer) Integrated Resource Analysis (described in (C) below).

(C) Revise Minnesota statutes to allow utilities that opt into a multi-year, performance-based framework to replace the current Integrated Resource Plan (IRP) with a 15-year (or longer) Integrated Resource Analysis (IRA) that guides the utility business plan; and allow utilities to coordinate the filing plans of the Busness Plan and IRA. 

(D) The Commission should encourage the use of pilot programs or other methods for testing and evaluating components of a multi-year, performance-based framework.

(E) The Commission should establish clear methods for determining the value of grid services and DER services.

(F) The Commission should review and adjust time-varying rates for energy services so that they send more accurate and effective price signals.

(G) Enable innovative product and service options and technologies by revising Minnesota statutes and regulations, specifically including options for energy-intensive trade-exposed industries.

(H) The Commission and Department of Commerce should use their existing authorities to achieve e21 Principles and Outcomes; and review and recommend revisions to their authorities where needed.

(I) The Minnesota Legislature should appropriate the resources necessary for the Commission and the Department to implement e21’s recommendations.

(J) The Commission and the Department should institutionalize the practice of using a collaborative regulatory process.

(K) The Commission and the Department should look for opportunities to initiate generic dockets.

(L) Initiate forward-looking stakeholder processes.

(M) Develop a transparent, forward-looking, integrated process for modernizing the grid.

(N) Identify and develop opportunities to reduce customer costs by improving overall grid efficiency. 

Legislative work and Phase II work to follow in 2015.

 

 

 

 

 

 

 

On Saturday, June 13, Governor Dayton signed the 2015 Jobs and Energy Bill into Law.  Our prior coverage of this bill can be found here and here.  The following amendments were made after the Governor’s veto:

  • New definitions for “propane,” “propane storage facility,” and “synthetic gas.”
  • New net metering provision that applies to cooperative electric associations and municipal utilities.  The vetoed version of the bill included a reference to a subdivision 3(f), which was omitted.  The final version of the legislation includes the referenced subdivision 3(f), which provides a customer with a net metered facility having a capacity of less than 40 kW to be compensated for the customer’s net input into the utility’s system via a kWh bill credit.
  • Continuation to the year 2017 of the Minnesota Department of Commerce’s ability to assess up to $1,000,000/year for regional and national duties under section 216A.07 subd. 3a.
  • New obligation of the Minnesota Department of Commerce and Minnesota Pollution Control Agency to formally submit the draft state implementation plan for Clean Power Plan compliance to the legislature for review and comment.
  • New authorization to the Minnesota Department of Commerce to assess up to $854,000 per biennium for reasonable costs it incurs in services it provides to implement the new energy-intensive, trade-exposed rate provision.

Funding for the Minnesota Department of Commerce appears to have been the big concern, which was set out in Governor Dayton’s veto letter.  Moving forward, the three regulatory developments “to watch” in Minnesota are concepts that were first considered and discussed in the Minnesota e21 Initiative.  Although not fully endorsed by all members to that effort, the statutory language authorized by the 2015 Jobs and Energy Bill on those issues can be summarized as follows:

  • Regulatory Reform: The existing multi-year rate plan provision was revised to permit multi-year rate plan proposals up to five years in duration, during which the utility may be subject to reasonable performance measures and incentives, and as part of which the utility may propose: (1) recovery of its forecasted rate base; (2) recovery of O&M expenses; (3) tariffs that expand the products and services available to customers, including an affordability rate for low-income customers; and (4) MN PUC-approved adjustments for changes the MN PUC determines are just and reasonable, including changes in the utility’s cost of operating its nuclear facilities.
  • Distribution Grid Planning: Utilities operating under a multi-year rate plan must engage in distribution system planning to (i) identify in a report those investments that are necessary to modernize the grid, enhance reliability, improve security against cyber and physical threats, and increase energy conservation; and (ii) identify in a study the interconnection points on its distribution system that are available for small-scale distributed generation resources and identify any necessary upgrades. The utility may recover the costs associated with this planning and any investments incident thereto.
  • Competitive Rate Options for Energy-Intensive Trade-Exposed Customers: To achieve the policy objective of ensuring competitive electric rates for energy-intensive trade-exposed customers, certain utilities have the flexibility to offer those customers various rate options, including fixed rates, market-based rates, and rates to encourage utilization of new clean energy technology.

In a literal sprint to the finish, the Minnesota legislature passed a bill, which included energy policy provisions as part of a Senate Floor Amendment, just seconds before the State constitutional deadline. Pertinent energy policy provisions were included in Article 3 of that amendment and are briefly summarized below:

  • If the MN PUC orders a generating facility to terminate its operations prior to the end of that facility’s physical life, the MN PUC may assess whether to allow a utility to recover any positive net book value of that facility.
  • The existing multi-year rate plan provision was revised to permit multi-year rate plan proposals up to five years in duration, during which the utility may be subject to reasonable performance measures and incentives, and as part of which the utility may propose: (1) recovery of its forecasted rate base; (2) recovery of O&M expenses; (3) tariffs that expand the products and services available to customers, including an affordability rate for low-income customers; and (4) MN PUC-approved adjustments for changes the MN PUC determines are just and reasonable, including changes in the utility’s cost of operating its nuclear facilities.
  • Utilities operating under a multi-year rate plan must engage in distribution system planning to (i) identify in a report those investments that are necessary to modernize the grid, enhance reliability, improve security against cyber and physical threats, and increase energy conservation; and (ii) identify in a study the interconnection points on its distribution system that are available for small-scale distributed generation resources and identify any necessary upgrades. The utility may recover the costs associated with this planning and any investments incident thereto.
  • Utilities may petition the MN PUC for recovery of natural gas extension projects outside of a general rate case.
  • Net metered customers of a cooperative electric association or a municipal utility may be subject to additional fixed charges.
  • To achieve the policy objective of ensuring competitive electric rates for energy-intensive trade-exposed customers, certain utilities have the flexibility to offer those customers various rate options, including fixed rates, market-based rates, and rates to encourage utilization of new clean energy technology.

Although not endorsed by all members of the Minnesota e21 Initiative, the concepts in the provisions related to the multi-year rate plan, distribution planning, and energy-intensive trade-exposed rate options were raised in the e21 Report.

Today, Xcel Energy filed its 2016 – 2030 Integrated Resource Plan.  Xcel Energy’s proposal is fairly significant in scope – it proposes to cut CO2 emissions by 40% by 2030, add new renewable and natural gas generating resources, and lay the stage for reforming the resource planning process conistent with its framework filing and proposals from the e21 Initiative.  Specifically, Xcel Energy’s preferred plan contains the following elements:

  • Add approximately 1,800 MW of wind resources;
  • Add approximately 1,700 MW of utility-scale solar resources;
  • Add approximately 1,750 MW of natural gas peaking resources;
  • Operate the carbon-free, baseload nuclear plants through at least 2030;
  • Operate Sherco Units 1 and 2 at reduced levels through 2030;
  • Extend the life of Blue Lake Units 1-4 an additional four years through 2023; and
  • Modify the procedural review process by inviting stakeholder participation in modeling discussions prior to the traditional discovery and comment processes. 

The assumptions underlying this proposal, as well as other parties’ proposed alternatives, will be debated over the next year.