1. EBA Mid-Year Energy Forum
October 30, 2018

2. Recognized Clean Energy Leader
Xcel Energy Serves 3.5 Million Electricity and 2 Million Natural Gas Customers in Eight States
Recognized Clean Energy Leader
National wind leader for more than a decade (AWEA)
No. 4 renewable energy sales, No. 1 outside California (Ceres)
2016 Climate Leadership Award for GHG reductions (EPA)
Leader in pursuit of new technologies and voluntary emission reductions

3. Renewable Energy Leadership
Generation investment
3,380 MW of new wind by 2021
Flexible natural gas
Transmission Investment
$4.12 billion investments from
Operational experience
>60% of PSCo load served by wind in limited hours

4. Our Changing Energy Mix
2005
2017
2022
Hydro 5%
Biomass 1%
Hydro 3.5%
Biomass 1.3%
Solar 2%
Other .1%
Hydro 3%
Biomass 1%
Solar 4%
21% Carbon Free
40% Carbon Free
61% Carbon Free
Coal
Natural Gas
Nuclear
Wind
Other Renewable

5. Xcel Energy Residential Bill 3% Reduction in the Average Bill
Clean Energy at an Affordable Cost
Steel for Fuel
Competitive wind prices and ownership
Universal solar at half the price of rooftop
Renewables procured through RFPs
Low-cost natural gas alternatives
Xcel Energy Residential Bill
3% Reduction in the Average Bill

6. Jurisdictional Touchpoints
State Resource Planning and PURPA
State Right of First Refusal Statutes

7. State Resource Planning
Minnesota
Wind procured through competitive process
All-Source Integrated Resource Plan Requirement
In its next resource plan filing, Xcel shall evaluate combinations of supply-side (distributed and centralized), demand-side, and transmission solutions that could in the aggregate meet post-retirement energy and capacity needs as well as contribute to grid support.
Colorado
All-Source RFP Approach
Two-phase regulatory process
Note the number of bidders to show robust nature of process

8. State Resource Planning
Colorado Electric Resource Plan
Litigated modeling assumptions
2016 All-Source Solicitation
417 bids; 238 distinct projects
14 different generation types
350+ renewable bids
100 bids with storage
Median Pricing
Wind: $/MWh
Solar: $/MWh
Solar + Storage: $/MWh

9. Resource Planning and PURPA
Colorado Public Utilities Commission Rule 3902(c):
“A utility shall use a bid or an auction or a combination procedure to establish its avoided costs for facilities with a design capacity of greater than 100 KW. The utility is obligated to purchase capacity or energy from a qualifying facility only if the qualifying facility is awarded a contract under the bid or auction or combination process.”
We have an All-Source Solicitation in 2013 and 2016

10. PURPA Qualified Facilities
Recent LEO applications
Filed October 2, 2018
17 QFs (wind and solar); almost 1400 MW
20 year contract term
Pricing based on 2013 PSCo All-Source Solicitation
Solar: $58 – 63 / MWh
Wind: $29 – 34 / MWh
In Colorado, you have to win a competitive solicitation in order for an LEO to arise.
Spower wants a forward looking rule to govern when a LEO arises (i.e., live in a world where Rule 3092 doesn’t exist); but they want to look backwards to capture avoided cost pricing from PSCo’s last all-source solicitiation

11. Jurisdictional Touchpoints
State Resource Planning and PURPA
State Right of First Refusal Statutes

12. Transmission FERC Order 1000 Minnesota
FERC eliminates federal rights of first refusal
FERC acknowledges the “longstanding state authority” over transmission planning and expansion and declares that “nothing in this Final Rule is intended to limit, preempt, or otherwise affect” that authority
Minnesota
Enacts law to preserve its regulatory authority over transmission lines

13. The Minnesota ROFR Matched set of rights and obligations
Incumbency right triggered by physical connection
MPUC can require an incumbent to build the transmission line even if it doesn’t want to
“Incumbent Electric Transmission Owner”
Not limited to in-state entities, includes all current owners and operators regardless of state of incorporation or principle place of business
Incumbent electric transmission owners are given “the right to construct, own, and maintain an electric transmission line that has been approved for construction in a federally registered planning authority transmission plan”— IF the line will connect to facilities owned by that incumbent transmission owner

14. The Minnesota ROFR Procedural History FERC rejected LSP challenge
Concluded “it is appropriate for MISO to recognize state or local laws or regulations as a threshold matter in the regional transmission planning process.”
Explained that Order 1000 “struck an important balance between removing barriers” and “ensuring the nonincumbent transmission developer reforms do not result in the regulation of matters reserved to the states.”
Seventh Circuit rejected LSP judicial challenge of FERC’s ruling
Concluded it was a “proper goal” for FERC “to avoid intrusion on the traditional role of the States’ in regulating the siting and construction of transmission facilities.”
Emphasized that Order 1000 terminated the federal, not any state, right of first refusal and

15. The Minnesota ROFR Dormant Commerce Clause Challenge
LSP brings lawsuit against MN state agencies
NSP and ITC intervene
Department of Justice Antitrust Division files Statement of Interest
Court grants Defendants’ Motion to Dismiss
Relied on General Motors Corp. v. Tracy, 519 U.S. 278 (1997) and Allco Fin. Ltd. V. Klee, 816 F.3d 82 (2d Cir. 2017)
Found no overt discrimination—“statute draws a neutral distinction between existing electric transmission owners whose facilities will connect to a new line and all other entities, regardless of whether they are in-state or out-of-state.”
LSP has appealed (8th Circuit)
The third bite at the apple
For us, the question is not what policy choice is best--competition, partial competition, regulation, preference for the owner of the physical assets where the lines is being connected. The question is who gets to make that choice and under what body of law?
We believe Congress and FERC have been active in this space. Both bodies have shown their ability and willingness to act.
FERC Order 1000 struck a careful balance between federal and state rights and—even more remarkably, FERC has acted in the context of this particular MN—having upheld it against a challenge by LSP.
For all of those reasons, it would be unprecedented to have the federal judiciary wade into the space and essentially force a policy choice on Minnesota using perhaps the most blunt instrument possible – the Dormant Commerce Clause of the Federal Constitution.