In 2013, Xcel issued its first competitive bidding process for new generation capacity. The Minnesota Public Utilities Commission (PUC) accepted five proposals including 430 MW of natural gas capacity from Xcel and 100 MW of distributed solar from Geronimo Energy. The PUC deemed the case a “contested case hearing” and sought a report and recommendation from an Administrative Law Judge (ALJ). Following an evidentiary hearing, the ALJ recommended the solar proposal as the most reasonable and prudent. The ALJ concluded solar offered the lowest cost on a per-MWh basis after accounting for additional attributes.
Solar is becoming increasingly cost competitive with the support of the investment tax credit. In this instance, natural gas was the most cost competitive resource under traditional modeling scenarios. However, solar became the most cost-competitive resource once additional attributes were considered (i.e., avoided energy costs, etc.). While Minnesota is on the forefront, we see an emerging national trend toward the inclusion of a broader spectrum of attributes as stakeholders consider reforms to net metering. A prime example is a Minnesota law passed in 2013 allowing utilities to replace net metering with a Value of Solar (VOS) tariff. The ALJ recommendation incorporates many of the same attributes considered in the VOS tariff.
Regulatory Filing (Docket No. E-002/CN-12-1240): http://bit.ly/1l4ojHC
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