Minnesota MERP Frequently Asked Questions

Xcel Energy proposes to take major voluntary steps to reduce emissions at three Twin Cities power plants over the next seven years as part of the company's Minnesota Emissions Reduction Proposal. Here are answers to some questions you might have about Xcel Energy's proposal.

What is the Minnesota Emissions Reduction Proposal?

The project extends from an emissions reduction bill passed during the 2001 Minnesota legislative session. The legislation encourages utilities to make voluntary emissions reductions, and provides a mechanism for electric utilities to recover the cost of qualifying voluntary emissions reduction projects through an increase on customer bills. The process will allow the appropriate state authorities to determine whether the benefits of the plan are sufficient to justify the associated costs. Xcel Energy helped develop this legislation and supported its passage.

Xcel Energy's proposal reflects our commitment to provide reliable energy to customers while reducing the environmental impact of generating that power. Previous efforts related to the initiative include improvements to our coal plants in Denver and the current repowering of two units at our Black Dog plant in Burnsville, Minn.

What were the key factors in deciding on these projects?

Xcel Energy attempted to identify qualifying emissions reduction projects that provided significant environmental benefits at a reasonable cost, while addressing the interests of state energy security. The plan is designed to meet the needs of our customers by creating 400 megawatts of new generating capacity, while using existing plant sites and infrastructure and avoiding the cost of new transmission.

Why not do all these projects at once?

We must do them in sequential order to avoid power shortages and spikes in customers' electricity bills. We also have to balance the desire to make these improvements immediately with the realities of waiting times for permitting and acquiring new generation equipment, the time needed to design and build the improvements, the costs involved and the necessary upgrades to the gas delivery system.

Why not convert all the metro units to natural gas?

We worked to design a package that provides significant environmental benefits, while ensuring that Xcel Energy does not become overly dependent on any single fuel source. One factor that keeps electricity prices low and supply stable is a diverse fuel mix, with competing sources of fuel supply, such as coal, natural gas, nuclear, wind and other renewables. Natural gas is a more expensive fuel than coal, and our customers benefit from the lower costs of generating electricity with coal at a baseload unit such as the King plant.

Is there enough natural gas to repower High Bridge and Riverside?

Yes, there is enough natural gas to supply these units; however, some gas supply system upgrades will be needed.

What is the total rate impact of these proposed projects?

In Minnesota, customers will pay for emissions reductions through somewhat higher electricity bills. There would be no immediate rate impacts. Once all the proposed improvements are in place, the average residential customer would pay about $3.50 to $4 extra per month on their electricity bill, not including the costs of adding additional generating capacity required to meet our customers' needs for electricity. The cost increases from this proposal are projected to be well under the overall rate of inflation over this time period.

Will any of these projects require new transmission lines?

The reasons we want to preserve existing generating sites and infrastructure is to reliably meet customers' energy needs and limit the need for new transmission lines. Our proposed projects do that with relatively little transmission investment. While some transmission equipment upgrades will be required, we do not anticipate these improvements will necessitate any new, off-site transmission lines.

If you have further questions about this filing, please use the Contact Us link at the top or bottom of this page, follow the instructions under e-mail, and select the topic "Minnesota Emissions Reduction Proposal."