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Renewable Energy: Legal and Policy Issues

Renewable Energy: Legal and Policy Issues. Frank Prager Vice President, Environmental Policy Xcel Energy November 20, 2009. Gas Customers 1.9 M Electric Customers 3.4 M. Xcel Energy Inc. Northern States Power Company Minnesota. Northern States Power Company Wisconsin.

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Renewable Energy: Legal and Policy Issues

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  1. Renewable Energy: Legal and Policy Issues Frank Prager Vice President, Environmental Policy Xcel Energy November 20, 2009

  2. Gas Customers 1.9 M Electric Customers 3.4 M Xcel Energy Inc. Northern States Power Company Minnesota Northern States Power Company Wisconsin Public Service Company of Colorado • No. 1 wind energy provider • No. 5 in solar capacity • Largest green pricing program • Industry-leading voluntary emission reductions • Leader in pursuit of new technologies Southwestern Public Service Company

  3. Xcel Energy’s Renewable Energy Geography Biomass Wind Solar Xcel Energy States Served

  4. Advanced Technology:Adding Clean Energy Resources Owned & Purchased Energy 2008 2020 Renewables 13% Nuclear 12% Renewables 25% Natural Gas 16% Other* 1% Natural Gas 22% Nuclear 13% Coal 52% Coal 46%

  5. Xcel Energy Wind Capacity Growth of Xcel Energy Wind Capacity MW

  6. Solar • Utility-scale Photovoltaic: • 8.2 MW plant in operation in Alamosa • 17 MW plant planned for 2010 • Concentrating Solar Power: • Uses mirrors to concentrate sunlight • Can be combined with thermal storage • Colorado Solar*Rewards: • Customer-sited distributed generation • 35 MW on line – over 4000 customers • Proposed 280 MW of new advanced solar in latest Colorado Resource Plan

  7. Other Technologies and Initiatives • Biomass • Bay Front: Coal-to-biomass conversion (Wisconsin) • Co-firing or stand-alone generation options • Pine beetle forests in Colorado • Geothermal • Other environmental initiatives • Energy efficiency and conservation • SmartGridCity™ • Emission reduction programs Proposed Xcel Energy CO2 Reductions

  8. Renewable energy advantages No net emissions Important piece of portfolio of clean energy resources Generally high levels of public and political acceptance Little or no fuel price volatility Renewable energy challenges Transmission Capital Price Intermittency Key: Technological advancement Utility Perspective on Renewable Energy

  9. Questions About Renewable and Clean Energy Policy • Where to spend clean energy dollar? • Repowering coal/natural gas? • Renewable energy • New wind energy? • Distributed Solar/CSP? • Other technologies • Energy efficiency • What combination of mandates and incentives? • National natural gas supply issues? • How to address intermittency and transmission? • Integration of state and federal policy? • Tax policy • RPS

  10. National Renewable Energy Standard • American Clean Energy and Security Act RES targets: • 6% in 2012/20% in 2020 • Three quarters from renewables • Companion to Cap & Trade • Targets similar to other legislation (Bingaman, Markey) • Energy efficiency alternative compliance option • Key Xcel Energy issues: • Controlling customer cost for both C&T and the RES • Access to federal market regardless of state standards

  11. Transmission • Planning & Interconnect • Lead times • Clogged queues • Cost allocation • LDC vs. export • Operations • Balancing wind vs. load patterns • Intermittency • Meeting reliability standards • Incentives

  12. Tax Subsidies • Tax credits critical to deploying renewable resources • Wind PTC expires in 2012 • Solar ITC expires 2016 • Tax credits likely to be under pressure • Cost • Industry maturity (especially wind) • Challenge: Bridging the gap to technological advancement

  13. Renewable Integration Tax Credit • RIC designed to offset costs of integrating intermittent renewable energy onto utility system • Tax credit per kWh of intermittent (wind and solar) renewables, graduated based on percent of sales • Designed to encourage more renewables and defray system costs of higher levels of integration

  14. Renewable Integration Tax Credit Detail * Estimated Cost, $180 million / year for ten years

  15. Utility ratemaking vs. Technology risk Markets and entrepreneurs Distributed generation incentives Rebate structure Utility costs Critical role of traditional utility function Utility Regulation and Advancing Renewable Technology

  16. Xcel Energy Support for New Renewable Technologies • Advanced technology programs • SolarTAC • Innovative Clean Technology program • Minnesota Renewable Development Fund • Energy storage demonstrations • Smart Grid • NREL/EPRI Partnerships • Goal: Encourage development of more competitive renewable energy technologies • Emission reductions • Energy and capacity resource • Carbon reduction strategy

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