Dive Brief:

• The Minnesota Public Utilities Commission (MPUC) must decide whether Xcel's $250 million power purchase agreement (PPA) with Geronimo Energy covering 20 solar installations totaling 100 MW of solar capacity is in the Minnesota public’s best interest now that the utility has new bids for solar projects at $0.085 per kilowatt-hour or less.
• An Xcel filing with the MPUC reported that, after receiving 111 solar project bids from 36 developers in response to a request for proposals, the utility found 15 utility scale projects that would be “significantly less expensive” than the Geronimo PPA.
• Xcel is negotiating on three large projects that would significantly help it meet Minnesota’s 1.5% solar by 2020 mandate for investor-owned utilities.

Dive Insight:

Geronimo’s projects were heralded as a landmark in the price competition with new natural gas at the time the MPUC chose them over the proposed Black Dog gas plant.

Geronimo said Xcel’s revelation that the as-yet unannounced PPA price is at or above $0.085 per kilowatt-hour is a violation of the non-disclosure clause of the contract. Geronimo argued its bid was in competition against natural gas-generated electricity and its projects were designed with tracker technology to maximize peak demand output, therefore it is not equitable to compare its price to bids in the recent RFP for projects designed to simply meet the mandate.

All of these points are likely to be considered by the PUC as it approaches the decisions on whether the Geronimo PPA is in the public interest and on what Xcel’s peak demand needs are likely to be going forward.

Xcel expects the three projects being negotiated, in addition to 100 megawatts of new community solar gardens and new rooftop installations, could fully meet the 1.5% mandate.