Xcel Energy says it has decided to put plans for two natural gas-fired electric generation turbines – to be built near Hankinson – on hold, for now.
Xcel had previously announced plans for three natural gas turbines – one at the existing plant Black Dog in Minnesota, and two to be built near Hankinson. But during a hearing before the North Dakota Public Service Commission, Xcel regional vice-president Laura McCartin said the company also received two third-party proposals.
"As a result of the analysis of all the proposals received, we believe that one of two third party proposals could be a better deal for our customers than the Hankinson units," said McCartin. "Both proposals consist of adding a combustion turbine at an existing site."
McCartin says Xcel will now negotiate with both firms, and choose the lowest-cost option.
"The company continues to believe that the addition of new generation in North Dakota can be a cost-effective addition to our system," said McCartin. "In this circumstance, however, the new generation could not overcome the cost advantage of developing at existing sites that already have infrastructure in place."
PSC Chairman Brian Kalk says he found that somewhat disappointing.
"I was very excited when I heard Xcel Energy was going to build something and own something in North Dakota," said Kalk after the hearing. "Xcel operates in North Dakota, South Dakota, Minnesota and Wisconsin. And North Dakota is the only state where they don’t have generating capacity. The question always is, ‘Why?’”
But Kalk says because Xcel said it was putting the Hankinson project on hold, and isn’t cancelling it, there’s still some likelihood that it will be built.
“At some point in time, they (Xcel) believe these plants will become viable," said Kalk. "Now the question is – we have a question before us on advanced determination of prudence. I certainly haven’t made up my mind yet – but it doesn’t mean we won’t find that it’s a prudent plant.”
"If we're unable to reach agreement (with one of the two third-party companies), our proposal to build at the Hankinson site remains a viable project to pursue," said McCartin. "We are holding Hankinson in reserve."
Kalk says it also shows some of the challenges it has in working with other jurisdictions, such as the Minnesota Public Utilities Commission.
“The Minnesota competitive process made the Hankinson plan very questionable as to their future," said Kalk. "It’s just a very start example of how different states’ processes can have a significant effect on one state or the other.”
