As the result of a 1994 political compromise that would allow it to continue to store waste at its Prairie Island nuclear facility, Northern States Power, which merged with New Century Energy in 1999 to form Xcel, was required to buy 425 MW of wind power and was later ordered by the PUC to acquire an additional 400 MW by 2012. But the transmission system was not adequate to move that much energy out of the area.
Xcel began seeking approval in December 2001 to build four transmission projects and close to a dozen transmission upgrades, all by 2006. Bill Grant of the Izaak Walton League says the improvements are required by the merger agreement that created Xcel. The agreement stipulates the new company must ensure transmission is adequate to move a large expected build-up of wind energy off Buffalo Ridge, located in the state's southwest.
Changes in the regulatory climate, however, had several groups, including the Izaak Walton League, the American Wind Energy Association and Minnesotans for an Energy Efficient Economy, worried that the line would not be used for wind projects because open access transmission rules could allow other energy sources to lay claim to the new capacity. "As we began to develop our case, we wanted to make sure the project would actually move wind power and moving up the date was the only way we saw the company could make the necessary justification for building the line," says Grant.
From Xcel, Jim Alders agrees the PUC decision gives certainty to how and when wind will be developed, but he says the utility may have reached the mandated goal anyway. There already are 468 MW of wind turbines or projects in progress on Buffalo Ridge, leaving the utility to find 357 MW of new wind to meet its mandates. Alders points to the utility's recent all source bidding process in which 850 MW of wind projects made its short list (Windpower Monthly, December 2002). Those contracts could be awarded as early as this month.
"Basically, the PUC said: do what you're doing, but match the transmission capacity with the wind turbines," Alders says. "We're in a situation where we could have ended up at the same place, but now there is certainty around it." Xcel could still appeal the ruling, but Alders says that is unlikely.
In the same decision, the PUC ordered Xcel to sign enough power purchase agreements by December 31, 2003, to bite off a 675 MW chunk of the total mandated 825 MW, to immediately subscribe on the transmission system for the full 825 MW, and to develop up to 60 MW of wind (included in the 825 MW mandate) owned by local farmers, communities and small businesses.