The Sherburne County Commissioner got the latest update Tuesday about the closing of the Sherco 1 & 2 plants in Becker.

 

Chris Clark, Xcel Energy president for Minnesota, North Dakota and South Dakota, spoke to the board about the transition. He said not only is Xcel closing the two plants and building a gas powered plant, but the company is diversifying throughout the Midwest.

 

“We’ve been making a tremendous transformation. We have been evolving - adding a significant amount of renewable energy to our system,” he said. “We haven’t made decisions this big for some time - probably back to when we were doing the construction of Sherco 3.”

 

Three years ago, Xcel filed a plan with MN Public Utilities Commission (PUC) that called for doubling the amount of renewable energy, adding significant solar energy, closing Sherco 1 and 2 coal plants in 2023 and 2026 and adding a gas plant.

 

Clark said prices for renewable energy are making the transition easier.

 

 “We’ve seen a tremendous improvement in the pricing of renewable energy, particular wind energy. Part of this is driven  by the production tax credit and federal tax credit,” he said.    

 

“Wind pricing with the tax credits will be cheaper than our cheapest units -  Sherco 1 and 2.”

 

Commissioner Felix Schmiesing asked whether the new Trump Administration would have any effect on Xcel’s plans. He wondered whether the tax credits would disappear.

 

“I know there was a lot of political effort to make the change to natural gas,” he said. “Is there going to be any reconsideration of that issue and that policy?”

 

Clark said he was aware there could be a change with the new administration, but they were still committed to closing Sherco 1 and 2.

 

He said their main plants will be reaching the end of their life between now and 2040. He said if they wanted to extend the life of Sherco 1 and 2, it would likely require putting in emission reduction equipment that would cost about $500 million. Even then, most of the plants would be retiring at the same time.

 

“That creates a challenge for the next generation to manage,” he said. “We think the right thing to do is make the transition and take the $500 million that we’d otherwise use for emission reduction and put it into the gas plant and take advantage of the tax credits that are making wind so cheap.”

 

He said another thing Xcel is committed to is creating economic development opportunities. The closure of the two coal plants will cut about 150 jobs, he said. But Xcel is working with local and county government to  new customers to the area.

 

He said Northern Metal Recycling is already interested in locating there.

 

“While there will be a loss in property tax from Sherco 1 and 2,” he said, “there will be an opportunity to create additional property tax from the new businesses we hope to recruit.”