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Solar projects in Minnesota have South Dakota regulators' interest

PIERRE -- The South Dakota Public Utilities Commission granted a 180-day delay Tuesday on a rate adjustment for South Dakota electricity customers of Northern States Power, which does business under the Xcel Energy name.

PIERRE - The South Dakota Public Utilities Commission granted a 180-day delay Tuesday on a rate adjustment for South Dakota electricity customers of Northern States Power, which does business under the Xcel Energy name.

The commission's staff wants the time to "take a closer look" at the company's proposed increase, PUC lawyer Kristen Edwards said.

PUC Chairman Chris Nelson said amount is essentially 3 cents per kilowatt-hour.

"I want to commend staff for keeping your radar screens up," Nelson said.

The staff wants to investigate whether South Dakota customers would be paying more than necessary.

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Xcel is purchasing electricity from three new solar-power installations in Minnesota.

A new Minnesota law requires utilities there receive at least 1.5 percent of their electricity from solar generation by 2030.

Nelson said he doesn't want South Dakota ratepayers charged more than they should be for political decisions in Minnesota.

Nelson said he doesn't know whether that's the case but the delay would allow time to find out.

Commissioner Gary Hanson said he's always concerned about Colorado and Minnesota because those states do things in ways that South Dakota doesn't.

"This is something I'm always concerned with," Hanson said.

Xcel representative Jim Wilcox said the company understands the commission's desire and accepts the staff's request.

Wilcox said there would be a true-up at the end of 180 days.

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Xcel had previously informed the commission and the PUC staff the company was adding three solar projects to its purchased-power portfolio.

Of immediate concern for the staff is the Marshall solar project that began producing energy in October. Xcel wanted to start recovering the costs through its fuel clause rider in December.

The company further wants to begin recovering costs for the Aurora solar project and the North Star solar project in January 2017.

The PUC staff in its request for the delay said the Marshall costs aren't specifically identified in the company's current fuel-cost recovery filing.

The staff in its written request filed Nov. 30 said the staff "believes it is necessary to evaluate the resource to determine whether the PPA (purchased power agreement) is reasonable and cost effective considering other electricity alternatives."

The letter continued, "Commission Staff requests a suspension to allow adequate time to evaluate the Marshall Solar project."

The staff in its request said it believes the same research is needed for the Aurora and North Star projects.

The investigation will look specifically at the fuel clause rider filed by Xcel. Normally the riders are routinely approved because they typically reflect small adjustments in costs that a company experiences.

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The goal in this instance is to ensure the fuel-recovery adjustments "are reasonable and cost effective considering other electricity alternatives," the staff request said.

The Marshall project, owned by NextEra Energy, is four miles east of Marshall, Minnesota, and is estimated to generate 62.5 megawatts.

The North Star project, which would produce 100 megawatts at its site in Chisago County, Minnesota, has been described as the largest solar project in the Midwest.

The Aurora project is spread across 16 sites in Minnesota and would produce 100 megawatts.

Xcel's electricity territory in South Dakota covers a region that includes Sioux Falls, Canton, Lennox, Salem and various other communities.

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