Xcel studying retiring Sherco plant

Washington, 6 December (Argus) — Minnesota energy regulators directed Xcel Energy to study the possible retirement of two units at its 2,400MW Sherco plant by 2020, among other options such as converting the plant to burn natural gas.

The Minnesota Public Utilities Commission (PUC) said Xcel should continue to evaluate the feasibility of continuing to operate units 1 and 2, installing environmental upgrades, or retiring the units.

The 5 December directive came as the PUC evaluated Xcel's integrated resource plan, which is filed every two years. Xcel has studied the retirement option before, but the new PUC directive updates the plan and goes into more depth, the company said.

Environmental groups have asked the PUC to require an analysis of retiring the units.

Xcel must file its updated plan and analysis with the PUC by July 2014.

The company told Argus today it not reached a decision on what should ultimately be the plan for retiring the units.

“Sherco 1 & 2 are very economical parts of our system and can continue to operate reliably,” Xcel said. “Their future will depend on federal and state environmental policy.”

The plant's unit 1 and unit 2 are 750MW each, while unit 3 is 900MW.

Sherco, officially named the Sherburne County Generating Station, takes coal from Arch Coal's Black Thunder mine in Wyoming, Westmoreland Coal's Absaloka mine in Montana, and Peabody Energy's North Antelope Rochelle mine in Wyoming. It received 424,330 short tons (384,945 metric tonnes) in September, according to the Energy Information Administration.

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