Xcel Energy 2007 Annual Report Download - page 23

generation procurement and DSM obligations, the plan indicates that the type of incremental resources has changed
from prior plans. Key highlights of the plan include:
• Additional wind generation resources of 2,600 MW, allowing NSP-Minnesota to comply with our RES of
30 percent renewable energy by 2020.
• Increases in DSM of approximately 30 percent energy savings and 50 percent demand savings.
• Seek license renewals for Prairie Island’s two units through 2033 and 2034, respectively, and expand capacity at
Prairie Island by 160 MW and Monticello by 71 MW.
• Request approval to make environmental upgrades at Sherco, while expanding capacity by 80 MW. The
environmental upgrades would result in a significant reduction in overall SO2, NOx and mercury emissions from
the facility.
• Negotiate and seek approval of purchases from Manitoba Hydro Electric Board (Manitoba Hydro) for 375 MW
of intermediate and 350 MW of peaking resources beginning in 2015.
• Incremental peaking and intermediate generation needs of 2,300 MWs.
• Carbon emission reductions of 22 percent below 2005 levels by 2020, a six million ton reduction.
The MPUC will set a schedule for consideration of the plan early in 2008.
NSP-Minnesota Base Load Acquisition Proceeding — On Nov. 1, 2006, NSP-Minnesota filed a proposal with the
MPUC for a purchase of 375 MW of capacity and energy from Manitoba Hydro for 2015-2025 and the purchase of
380 MW of wind energy to fulfill the base load need identified in the 2004 resource plan. An alternate supplier
proposed a 375 MW share of a lignite coal generation plant to be located in North Dakota and 380 MW of wind
energy generation, with an option for Xcel Energy ownership in both components. The MPUC referred the matter to a
contested case proceeding.
On July 20, 2007, NSP-Minnesota filed a petition asking to suspend the proceeding until NSP-Minnesota can
complete its analysis of the impact of the RES and conservation goals on its need for additional resources, as outlined
in the July 20, 2007 Notice of Changed Circumstance in the Resource Plan.
In September 2007, the MPUC approved NSP-Minnesota’s Notice of Changed Circumstance and required
NSP-Minnesota to file a new resource plan by Dec. 14, 2007. NSP-Minnesota filed the 2007 resource plan, along with
a proposal for closing this proceeding as the new plan does not indicate a base load resource need. The MPUC is
expected to take up matter of schedule for the base load proceeding in early 2008.
Additional Base Load Capacity Projects for Sherco, Monticello and Prairie Island — The MPUC order in the 2004
NSP-Minnesota resource plan indicated that additional capacity from the Sherco, Monticello, and Prairie Island plants
would be cost-effective and should be pursued. On July 20, 2007, NSP-Minnesota filed a Notice of Changed
Circumstance with the MPUC seeking to delay these proceedings until NSP-Minnesota can complete its analysis of the
impact of the RES and conservation goals on its need for additional resources. In September 2007, MPUC approved
the Notice of Changed Circumstance and directed NSP-Minnesota to file a new resource plan by Dec. 14, 2007.
NSP-Minnesota filed the 2007 resource plan, which confirms the cost-effectiveness of these projects, and proposed to
initiate filings for approval to pursue these projects in the first half of 2008.
NSP-Minnesota Transmission Certificates of Need — In March 2003, the MPUC granted four certificates of need to
NSP-Minnesota for the construction of various transmission system upgrades for up to 825 MW of renewable energy
generation (wind and biomass) in southwest and western Minnesota.
The MPUC granted routing permits in 2004-05 for the major transmission facilities. NSP-Minnesota expects to
complete the transmission construction in 2008 at a cost of approximately $230 million. As of Dec. 20, 2007, MISO
has determined the new transmission facilities already installed provide transmission outlet capacity for up to 900 MW
of renewable generation.
In late 2006, NSP-Minnesota filed applications for certificates of need with the MPUC for three additional
transmission lines in southwestern Minnesota and one in Chisago County, Minn. In 2007, the MPUC issued a
certificate of need authorizing NSP-Minnesota to construct three new 115 KV transmission lines (totaling 35 to 50
miles) in southwestern Minnesota to provide approximately 350 MW of incremental transmission delivery capacity for
wind generation. The three projects, including associated substations, are expected to cost $72.5 million. The MPUC
order required NSP-Minnesota to file required route permit applications by January 2008 and complete construction by
Spring 2009. The route permit applications were filed with the MPUC and SDPUC as required, and are pending
MPUC and SDPUC action.
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