the problems with SF 1735…

March 18th, 2015


Please say no to S.F. 1735, a bill that would result in removal of the regulatory protections for rate-payers and the public, and let utilities have the ability to charge us for private costs, and costs that have not been demonstrated to be prudent expenditures.

Little by little, Xcel Energy’s e21 Initiative is slithering into bills before the House and Senate Energy Committees.

Before anyone can vote on these bills, they should read Alfred Kahn’s “The Economics of Regulation,” both Volume 1 and Volume 2.

What’s e21 Initiative?  Here’s what Xcel filed at PUC, docket 14-1055:

Letter & e21 Initiative Report

Tomorrow, S.F. 1735 (see companion HF 1315)and S.F. 1431 are in Committee, and they’re supposed to vote on the Energy Ominous bill.

What’s up with S.F. 1735?  Well, check out this version, with yellow highlighting (and this is NOT all-inclusive):

SF 1735-1_Markup

SF 1735doesn’t have the part about “Competitive Rate for Energy-Intensive Trade-Exposed Electric Utility Customer” part that HF 1315 does, though we’ll see what the mines and Koch Refinery have to say about that when the Energy Ominous bill comes together and everyone has their hand out and foot in the door.

SF 1735 is a problem because… where to start…  the first problem is that it proposes, as Xcel does in e21, a BUSINESS PLAN which “replaces a general rate case filing,” REPLACES!  The standard it must meet is that it result in “just and reasonable rates,” and there’s nothing about “prudent” and there’s nothing about being in the public interest.  DOH!

And dig how it would be approved — they SHALL approve:


Stakeholder group… right, we know who that is, and we sure know who that isn’t!  And that’s the e21 Initiative mantra, stakeholders, and from who was included in e21, we know who would be deemed a stakeholder — all those who have done deals with Xcel Energy!  Oh, and DOH, they want approvals at the PUC based on “Settlement Agreements.”  Right, like the one that opened the door and welcomed CapX 2020 transmission, and that horriffic “it’s a deal, it’s a package deal, and it’s a good deal” of the 2005 Ch 97 – Transmission Omnibus Bill from Hell with Xcel transmission perks, CWIP and C-BED :


PUC decision based on “stakeholders” and deals with Xcel Energy?  No, I think not.

Per the House hearing on HF 341 (see also S.F. 237), Minnesota should now be an electricity exporter, which is one between-the-lines goal of e21 Initiative, the others being ability to build without demonstrating need, to use ratepayer money for market development, to eliminate contested cases and use “Settlement Agreements,” which they’ve done expertly in the past.  Exporting for profit is doable, now that we have the transmission in place.  It would help Xcel Energy to just get rid of that Certificate of Need requirement, which HF 341 would do for natural gas plants of any size, i.e., 800 MW (like the LS Power Sunrise Station proposed for Chisago County, Lent Township) if it’s for sale into the MISO market.  As you know, also up for consideration is SF 306 & 536, HF 338, which would lift the nuclear prohibition and allow a CoN for Monticello or anywhere.  There’s no need, instead there’s excess generation, but that electricity could also go into the market, and with Construction Work in Progress, Minn. Stat. 216B.16, Subd. 6a, we ratepayers could pay for that private market activity.  NO.  NO.  NO.


The situation we’re in is NOT new to Xcel or any other utility.

  • Distribution system is utility responsibility as franchise holder and regulated utility, but they’ve neglected the distribution system over decades.  They have chosen not to upgrade and not to bring it into the 21st Century.  That neglect is not ours to correct.  Xcel has twice tried to invade and inflict communities with transmission when they had identified a distribution system deficit — Hiawatha and Hollydale.  NO!
  • Transmission deficit a decade ago was caused by putting so many IPP gas plants on line without requiring transmission upgrades.  This is reflected in the TLTG tables for the SW MN 345 kV line, PUC Docket 01-1958.  It also became an issue when Big Stone II was proposed because at that time it was “cause cost pays” and they hadn’t been charging gas plants but were going to charge BSII for interconnection costs, and BSII objected (see “standstill agreement” and withdrawal of Bill Gates’ Cascade Investment from that project at Legalectric: Bill Gates & Otter Tail at the PUC Tuesday…).  That transmission CoN was denied, approved, and plant was withdrawn so non-issue.  Then utilities and paid-for-NGOs went to MISO and FERC to find a way to spread the payment of transmission construction costs around, which they did.  The ones building it are not necessarily the ones paying for it, and it’s us ratepayers paying for transmission construction all around the country (See Schedule 26A, MISO Tariff, also Tariff MM) and the PUC has yet to address whether that should be paid for by us — but wait, it’s FERC rates, so the PUC has no say… well, that MISO MVP bill hasn’t come before the PUC yet, and that’s the last thing Xcel wants.  That capital cost is for private purpose transmission (market transactions) and as such, it is not ours to pay.
  • Generation changed decades ago too, moving away from utility construction and ownership, collect revenue for that, and now it’s morphed to an IPP (Independent Power Producer) mode where a third party takes on risk and cost of construction and sells power to utilities.  It’s been that way for decades.  Xcel has done some coal plant update, and nuclear update/uprate (grossly over budget by factor of 2+), but no new plants.  This shift from that regulated revenue stream was a business choice of utilities, but now they’re looking to make up that revenue that they don’t get for building the plants.  That business choice is not ours to “fix.”
  • Rates — Utilities want out of rate cases!  Of course they’d want that, Xcel has lost ground in their rate demands the last few rounds.  A Business Plan is not adequate, however, they need to prove up their expenditures if they expect us to pay them, and we should not, must not, be assessed for their market private purpose expenses, like transmission for export.  The bills for CapX 2020 ($2 billion) and for MISO MVP projects ($5.2 billion across Midwest) are the types of large expenses that they do not want to have to justify.  Not wanting to go through a rate case is no reason for us to let go of that protective review, or to let them charge us for things that are not public purpose expenditures necessitated by their obligation to provide universal service under their franchise.
  • Deregulation — this “e21 Initiative” looks and feels like the 2000 deregulation push to me, particularly with all the support from “environmental” and “advocacy” organizations, well funded, and funded I believe by Xcel and cronies (and that information should be made public).  Utilities wanted deregulation (back when Enron and Xcel’s NRG was making 300% profits screwing over California in an orchestrated rate skyrocket) and at that time, Xcel had all the “environmental” organizations behind it as “inevitable restructuring.”  Everyone was jumping on the deregulation bandwagon, all bozos on that bus, and that’s how this e21 feels.  Lots of people agreeing without knowing what they’re talking about, without understanding the consequences.  Back in that earlier deregulation push, the utilities also had everyone on board to pay them “stranded costs” for their large generating plants. Thankfully the A.G. stood up to that pointing out that deregulation is a disaster where ever it goes, and that the claimed “stranded costs” were really stranded assets, and if anyone owed anyone money, the utilities owed us for their assets that were paid for and fully depreciated.  Read Corneli on Stranded Assets.

This is not new to utilities.  It is not our job to correct their business plan errors, to pay for their neglect, or to finance their market activities.

More on this soon… but the short version, NO to SF 1735.  NO to SF 1431.


It’s not in the public interest.

And by the way, the “WE NEED MORE” histrionic mantra that you year year after year is false.  Excess generation?  Yes — here’s the peak demand that Xcel Energy has reported on its SEC 10-K filings since 1995:


Also from the 2014 SEC 10-K link:


The question to ask is “What’s stopping utilities?”  And it’s not our regulatory system.  It’s that utilities are looking for additional ways to transfer their costs to ratepayers without regulatory review.


Four years ago today nuclear reactors at Fukushima Daiichi started melting down.

fukushimareactors1… same type of reactor that it is in Monticello, along the Mississippi River, upriver and just northwest of the Twin Cities.

Four years later…

Japan Radiation Map

Four years later…

Some residents to ‘come home to Fukushima disaster zone

The government says about 138,000 Fukushima residents are still living in temporary accommodation.

At a meeting Sunday, Miyakoji residents were told that radiation contamination levels had lowered sufficiently for their return to the area — though some voiced concern over existing radiation levels despite decontamination efforts around some communities.

Four years later…

Navy sailors have radiation sickness after Japan rescue

Four years later…

Navy Sailors Possibly Exposed to Fukushima Radiation Fight for Justice

In March of 2011, the aircraft carrier USS Ronald Reagan rushed to Japan to help after the disastrous tsunami. Since then, many sailors from that ship have fallen ill, possibly as a result of exposure to radiation from the Fukushima nuclear meltdown. They will soon have their day in court.

The court decision came in the mail a few weeks later. The class-action lawsuit, the court ruled on Oct. 28, may proceed. Oral arguments are scheduled to begin on Feb. 26.

The complaint is 100 pages long and contains the names of 247 sick sailors along with details pertaining to reactor construction, water samples taken, Navy tactics and Japanese politics. It assails company greed just as it does the negligence of those who built the Fukushima reactors — and goes on to censure global politics and the cynicism of humankind. A kind of Old Testament fury infuses the text, and the complaint is so sweeping that it almost loses track of its true target. The USS Ronald Reagan appears therein as humanity’s last ship. An aircraft carrier. A ship of ghosts.

BreaktimeThat’s Prairie Island Nuclear Generation Plant behind Kenya…

Two nuclear issues in today’s news, one at Prairie Island and one at Monticello.

Prairie Island in the Beagle:

Prairie Island Unit 2 safely shut down; operators investigating fire alarm

And in the STrib:

Fire alarm prompts unscheduled shutdown of Prairie Island nuclear unit

While there was no indication of a fire, plant personnel are “taking conservative actions” and putting the unit out of service to investigate what happened, a statement from utility said.

One of the Prairie Island nuclear power plant’s two units in Red Wing is being shut down Thursday in response to what Xcel Energy is calling an “unusual event.”

According to the utility, a fire alarm went off overnight in the Unit 2 containment building. While there was no indication of a fire, plant personnel are “taking conservative actions” and putting the unit out of service to investigate what happened, a statement from the Minneapolis-based utility said.

“There is no release of radioactive materials as a result of this event, ” which was declared shortly after 4 a.m., the statement added.

Unit 1 is operating normally, said company spokesman Tom Hoen. The incident has not affected the utility’s ability to generate electricity, Hoen said.

A notification of an “unusual event” is the lowest of four emergency classifications established by the U.S. Nuclear Regulatory Commission.

The notification indicates a potential reduction in the level of safety at the plant but no threat to public safety, the utility explained. Hoen said he was expecting more information about the shutdown later Thursday morning.

In December, Unit 1 was taken out of service to allow workers to replace a reactor coolant pump seal during an outage.

Xcel Energy has one other nuclear power plant in Minnesota, a one-unit facility in Monticello, northwest of the Twin Cities.

Paul Walsh • 612-673-4482

At Monticello, it seems there are recurring security problems, in the St. Cloud Times:

Feds continue stepped-up oversight of Monticello plant

And in the STrib:

Increased federal oversight at Monticello nuclear plant to continue after violation spotted

MONTICELLO, Minn. — Federal regulators will continue increased oversight at Xcel Energy’s Monticello nuclear plant after a security issue was found.

The St. Cloud Times ( ) reports issues that led to the problem spotted in the last quarter of 2014 have been resolved. The improvements were found in two recent inspections, the U.S. Nuclear Regulatory commission said.

Those improvements mean the commission won’t move the Monticello plant into a category of plants with the most serious performance issues, as the commission said would normally happen without changes.

Details of the violation were not released by the commission, but it called the problem a “greater than green” security finding. Green translates to an issue of very low safety significance and is the lowest rating on the commission’s color-coded scale.

The federal commission stepped up inspections in 2013 after it found that the Monticello plant wasn’t ready for worst-case flooding along the Mississippi River.

Pete Gardner, the plant’s vice president, said the security issue was found by plant workers, who corrected it and notified federal regulators.

The plant is committed to making safety improvements, Gardner said.

And here’s the Forum view of the Senate Environment and Energy Committee hearing on repealing the nuclear moratorium — no mention whatsoever of Dr. Arjun Makhijani:

Nuclear power moratorium debate returns

A state law bans nuclear plant construction.

It is time to give Minnesota utilities the ability to consider a new nuclear plant, said Sen. Mary Kiffmeyer, R-Big Lake, sponsor of a bill to overturn Minnesota’s nuclear power plant moratorium.

“We appreciate the solid base of energy it provides,” she said about nuclear power.

Nuclear plants near Red Wing and Monticello provide a significant amount of Minnesota’s electrical power. Their licenses to operate end in the early 2030s, and if a new plant were to be considered, planning would need to begin soon.

An Xcel official said nuclear power is a good response to increasing rules to limit fossil fuel use.

Randy Evans said Xcel has no plans to build a new plant, “but at the bottom of the issue is we believe it does not make sense to leave any (energy) sources off the table.”

Nuclear opponents said new plants cost too much, builders cannot find adequate financing and they offer too much safety risk.

“Nuclear power plants remain an unacceptable power source,” said Bill Grant of the Minnesota Commerce Department.

Since the last Minnesota nuclear power plant started in 1973 and the last coal plant began producing power in 1987, the state has added wind, natural gas and biomass power, Grant said. Now, he said, the state is well positioned to get electricity from more natural gas plants and Canadian hydroelectric facilities.

The issue returned to the Minnesota Legislature Tuesday for the first time since Japan’s Fukushima Daiichi nuclear power plant was seriously damaged by a tsunami created by a major earthquake March 11, 2011. A bill that many thought would pass the Legislature that year ceased progress with the tsunami.

A Senate energy committee heard Kiffmeyer’s bill and one specifically lifting the moratorium on the Monticello plant, but took no action.

Chairman John Marty, D-Roseville, said he doubted that any bill coming out of his committee would overturn the moratorium, but he predicted that there would be attempts to amend an overall energy bill in his committee and the full Senate to strip the ban.

Marty said that he wanted a thorough hearing of the issue since it is bound to come up for more debate and the House appears to lean toward passing an anti-moratorium bill.

The Prairie Island Indian Community, which sits next to the Red Wing-area nuclear plant, sent a statement to Marty’s committee opposing lifting the moratorium.

The Tribal Council’s statement said that the tribe is not opposed to nuclear energy, but any increase in generating capacity or storage of waste nuclear materials “is irresponsible without a long-term national solution for storing spent nuclear fuel.”

The federal government promised 32 years ago to establish a place to store nuclear waste, but that never materialized. So waste is stored in hardened casks near the Prairie Island and Monticello facilities.

George Crocker of the North American Water Office opposes nuclear power, and said that the industry requires huge government oversight.

“There is no industry in the history of humanity that has more need for government than nuclear power,” he said, because of safety and financial reasons.

Nathan Makala of the Heartland Institute in Chicago, however, said that nuclear power is safe and “requires far less land than other sources of green energy such as wind.”

Nuclear supporters said it causes little pollution and can pump millions of dollars into the local economy. It provides “stable and affordable energy,” Makala said.


After listening to his testimony today before Minnesota’s Senate Environment and Energy Committee…

Video (weird write up, omitted the most important witness!!!), see 10:06:

*Lifting Moratorium on New Nuclear Power Plants

Arjun Makhijani – Minnesota Senate E and E Committee 03-03-2015

… we got another dose when Dr. Makhijani graced us with his presence at Fiesta Mexicana, with tales of Nuclear Waste Confidence that lit up every burn-up and zircaloy cladding wonk around the tables!  It’s really depressing stuff, so it was better to discuss this dreadful and so unbelievable nuclear situation in a dedicated misery-loves-company group.

In his testimony, he’d brought up the dangers of moving forward with nuclear plans where there is “Construction Work in Progress” for utilities to recoup funds spent on construction long before it is in-service, if ever, as is happening with the Vogtle plant.  So I took a stroll through our statutes, long familiar with our 2005 Construction Work in Progress give-away to Xcel on transmission, and found that, sure enough, it is an option for Minnesota utilities:

Minn. Stat. 216B.16, Subd. 6a. Construction work in progress.

To the extent that construction work in progress is included in the rate base, the commission shall determine in its discretion whether and to what extent the income used in determining the actual return on the public utility property shall include an allowance for funds used during construction, considering the following factors:

(1) the magnitude of the construction work in progress as a percentage of the net investment rate base;

(2) the impact on cash flow and the utility’s capital costs;

(3) the effect on consumer rates;

(4) whether it confers a present benefit upon an identifiable class or classes of customers; and

(5) whether it is of a short-term nature or will be imminently useful in the provision of utility service.

Xcel did finally come out and admitted their support for removal of the nuclear moratorium.  When considered in light of their e21_Initiative_Phase_I_Report_2014, there’s a trajectory that I see, and wish I didn’t: Xcel could build a new nuclear plant on the ratepayers dime and sell it on the market using their new transmission that we’re paying for, making Minnesota an electricity exporter!

Tonight, we discussed the Nuclear Waste Confidence decision, which is a “No-Confidence” decision, the word “confidence” has been removed from NRC lexicon.  Well, there is that other meaning of “confidence” to consider…

So on that happy note, I’ll have mango margaroodie dreams about the Pt. Beach cask explosion and the current task of changing the seals on those 20 year old TN-40 casks!


Prairie Island nuclear plant

That’s “our” reactor, the Prairie Island Nuclear Generating Plant, here in Red Wing, it’s within the city limits (which were expanded to include the plant).  I represented Florence Township from 1995, when Xcel, f/k/a NSP, applied to put nuclear waste in Florence Township under the “alternate site mandate,” and that went on, and on, and on, until they finally withdrew their application at the NRC in … what, 1999?  2000?  That’s one I thought would never end.  But that’s the thing about nuclear, it’s never over.


There are two bills before the Senate Environment and Energy Committee TOMORROW:

  • SF306 is simply worded, deleting the Minn. Stat. 216.243, Subd. 3b prohibition of new construction of a nuclear plant and changes it to “Additional storage of spent nuclear fuel” and over the previous language that states: “Any certificate of need for additional storage of spent nuclear fuel for a facility seeking a license extension shall address the impacts of continued operations over the period for which approval is sought.”  It’s authored by Kiffmeyer, coauthored by Dahms and Anderson.

SF536So we have a blanket repeal of the nuclear construction prohibition, and a specific opening for a Certificate of Need for a nuclear generator at the Monticello site.

Authors contact info is linked above, and emails for Senate Energy committee members and the authors are also listed below.

Whether it’s targeted as a replacement for the Fukushima Daiichi style GE plant, or whether it’s to add and operate a second reactor, WHY?

First, there’s no need.  There is a glut of electricity, as our friend, Xcel’s Ben Fowkes said, when they could no longer keep up the GROW GROW GROW fiction.  Here’s the Seeking Alpha transcript of the XEL Earnings Call, January 31, 2013. 

So I think the economies are in decent shape across all our jurisdictions. Doesn’t necessarily mean it translates to high sales growth. And that’s consistent with our forecast. I mean, we’re not anticipating that we’re going to see a tremendous rebound in sales, even as the economies start to improve. I mean, I think, that’s our new normal, frankly.

For last year:

Finally, NSP-Minnesota sales increased six-tenths of a percent driven by growth in the number of residential and small C&I customers and usage increases in the small C&I class.

From Xcel’s IRP (Docket 15-21), p. 45 of 102:

Historic&ForecastPeakDemand_IRPp45And here’s what they had to say about that (note they do NOT go back further than 2011, so we don’t get to see the 2000-2010 numbers):

We forecast a period of relatively flat growth such that our median base peak will increase only 0.4 percent in each year of the planning period…

That chart is NOT consistent with the 2014 SEC 10K filing, which shows a 2014 peak demand of 8,848 MW (info below is linked, see p. 9 at 10-K link):

Capacity and Demand
Uninterrupted system peak demand for the NSP System’s electric utility for each of the last three years and the forecast for 2015, assuming normal weather, is listed below.

That lower number is consistent with the downward trend of the 2014 NERC Long Term Reliability Assessment, now showing growth rates at lowest levels on record (note that it has NEVER been close to the CapX 2020 “forecast” of 2.49% annually):

2014 NERC-Wide Demand

And here’s the picture for MISO from the 2014 NERC Long Term Reliability Assessment:

MISO Peak Demand Reserve Margins

2014 NERC Long Term Reliability Assessment, p. 38 (or p. 46 of 115 pdf).

Also from the 2014 SEC 10-K link:


So we don’t “need” it, there’s no talk of a new nuclear plant in their recently filed IRP.  So why???

And the “WHY?” may be clearer when taken into context with last week’s hearing at House Energy, where the intent, in part, behind legislation there was to make Minnesota an exporter of energy.  Again, WHY?  Why make the state an exporter of energy?  And if we do what would that do for our rates here?  How does that fit with Xcel’s well funded plan to institute its e21 Initiative, and how does that fit with Xcel’s desire to use ratepayer money to find other market options?  The House bill would let natural gas plants be built without a Certificate of Need, whether by an IPP or regulated utility, with the key being that they are selling into the MISO grid, and not for Minnesota native load.

But nuclear is SO expensive!  First, there’s an immediate example of nuclear construction cost overruns right here in Minnesota, at the Monticello nuclear plant, where they went way beyond what was approved in the Certificate of Need:

Xcel management blamed for cost overruns at Monticello

So what was that about?  Costs more than doubled, increased by a factor of 2.33!!!  From the article:

The project to extend the plant’s life and increase power output ballooned from an estimated $320 million in 2008 to $665 million when it was completed last year. However, the final price tag likely will rise to $748 million, including construction-in-progress financial costs.

And let’s look at new construction, the first new nuclear plant in the US in 30 years:

C&U disputes Southern Co. claim for $247 million in penalties for cost overruns at Plant Vogtle

The cost punchline on the Vogtle plant?  Southern, Westinghouse and CB&I are already in court over previous cost overruns on the project, which is currently expected to cost $14.5 billion.

Here’s that other project:

Shaw Power Group, Westinghouse, face cost issues at S.C. project.

The cost punch line here?  The NRC is expected to act soon on the Summer license. Summer is projected to cost about $9 billion.

Building new plants?  Well, NEI has some info, BUT it’s outdated, nuclear has not caught up, and this is the most current I can find on the site (HERE’S THE WHOLE REPORT):

CapitalCosts2013So please explain — why would anyone want to build a new nuclear plant?

  • There is no need.
  • They cost so much that it’s unreasonable to even consider, and is the definition of imprudent!

Why are Reps. Kiffmeyer and Anderson trying to make this a possibility?  Is this for real?  Is it a diversion from some other issue?


To contact the Senate Energy and Environment Committee, go to COMMITTEE LINK, because many MN Senators have form access, not direct emails.  Boo-hiss…  Here are the emails listed, but go to link to see the buttons for the Senators with form access only:;;;;;;;;

Senate authors:;;

SF306 is authored by Kiffmeyer, coauthored by Dahms and Anderson, click names for links!

SF0536 is authored by Anderson only.

HF338 is sponsored by O’Neill ; Newberger ; Garofalo ; Howe ; Baker ; McDonald ; Nornes, click names for links!