Renewable Energy: Legal and Policy Issues

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Renewable Energy Legal and Policy Issues

• Frank Prager
• Vice President, Environmental Policy
• Xcel Energy
• November 20, 2009

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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

• Gas Customers 1.9 M
• Electric Customers 3.4 M

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Xcel Energys Renewable Energy Geography
Biomass
Wind
Solar
Xcel Energy States Served
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Advanced TechnologyAdding Clean Energy Resources
Owned Purchased Energy
2008
2020
Renewables 13
Natural Gas 16
Renewables 25
Nuclear 12
Other 1
Natural Gas 22
Nuclear 13
Coal 46
Coal 52
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Xcel Energy Wind Capacity
Growth of Xcel Energy Wind Capacity
MW
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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 SolarRewards
• Customer-sited distributed generation
• 35 MW on line over 4000 customers
• Proposed 280 MW of new advanced solar in latest
  Colorado Resource Plan

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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
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Utility Perspective on Renewable Energy

• 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

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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

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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 CT and the
  RES
• Access to federal market regardless of state
  standards

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Transmission

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

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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

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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

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Renewable Integration Tax Credit Detail
Estimated Cost, 180 million / year for ten
years
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Utility Regulation and Advancing Renewable
Technology

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

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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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