Xcel Energy 2014 Annual Report Download - page 25

7
Energy Sources and Related Transmission Initiatives
NSP-Minnesota expects to use existing power plants, power purchases, CIP options, new generation facilities and expansion of
existing power plants to meet its system capacity requirements.
Purchased Power — NSP-Minnesota has contracts to purchase power from other utilities and independent power producers. Long-
term purchased power contracts typically require a periodic payment to secure the capacity and a charge for the associated energy
actually purchased. NSP-Minnesota also makes short-term purchases to meet system load and energy requirements, to replace
generation from company-owned units under maintenance or during outages, to meet operating reserve obligations, or to obtain energy
at a lower cost.
Purchased Transmission Services — In addition to using their integrated transmission system, NSP-Minnesota and NSP-Wisconsin
have contracts with MISO and regional transmission service providers to deliver power and energy to the NSP System.
NSP-Minnesota’s Filing in Support of e21 Initiative — In December 2014, a collaborative report was issued in Minnesota by a
diverse stakeholder group known as the e21 Initiative. The e21 report released a set of recommendations that are intended to act as a
blueprint for a new customer-centric, performance-based regulatory approach.
Following the e21 report, NSP-Minnesota filed with the MPUC a plan for supporting the e21 Initiative, which includes the following
key objectives:
• Leading the effort to reduce carbon emissions 40 percent by 2030 from 2005 levels;
• Advancing distribution grid modernization;
• Providing our customers with a platform of innovative services and product offerings; and
• Implementing a new regulatory framework that provides both predictable rates for customers and a more timely and nimble
review while retaining key benefits of the existing process, thus freeing time for regulatory agencies, stakeholders and
utilities to focus on achieving policy objectives.
NSP-Minnesota plans to work with the MPUC and various stakeholders during 2015 to continue the dialogue and implementation of
the e21 Initiative and proposals presented by NSP-Minnesota.
NSP System Resource Plans — In January 2015, NSP-Minnesota filed its 2016-2030 Resource Plan with the MPUC, proposing to
achieve a 40 percent reduction in carbon emissions by 2030 from 2005 levels through the significant addition of renewables,
continued commitment to specific CIP annual achievements, and the continued operation of its existing cost-effective thermal
generation. The plan positions NSP-Minnesota to be responsive to future environmental requirements and market trends, builds on the
significant investments already made in the NSP System, and acknowledges the divergence in state energy policies within the NSP
System. Key points of the resource plan include:
• Adding 600 MW of wind by 2020 and 1,200 MW by 2027, bringing total wind power on the NSP System to over 3,600 MW;
• Adding 187 MW of large-scale solar energy by 2016 and an additional 1,700 MW of large-scale solar and 500 MW of
customer-driven small-scale solar; bringing total solar power on the NSP System to approximately 2,400 MW;
• Operating the Monticello and PI nuclear plants through their current licenses; and
• Continuing to run Sherco Units 1 and 2 with gradually decreasing reliance through 2030.
In February 2015, the MPUC approved the Competitive Acquisition Plan (CAP), in which NSP-Minnesota is required to add capacity
to its system to meet a resource need as follows:
• Enter into an agreement for 100 MW of distributed solar with Geronimo Energy LLC;
• Enter into an agreement with Calpine Corporation for a 345 MW expansion at its Mankato Energy Center; and
• Construct a 215 MW Black Dog Unit 6 combustion turbine.
NSP-Minnesota also proposed use of a collaborative stakeholder process to guide its five-year action plan, and to facilitate the
necessary update of its resource analysis to incorporate the CAP outcomes and significantly higher than expected response to its
Community Solar Gardens program.
CapX2020 — The estimated cost of the five major CapX2020 transmission projects listed below is $2.0 billion. NSP-Minnesota and
NSP-Wisconsin are responsible for approximately $1.1 billion of the total investment. As of Dec. 31, 2014, Xcel Energy has invested
$882.3 million of its $1.1 billion share of the five CapX2020 transmission projects.