Utility regulators approve Minn.’s largest-ever solar project 

Source: Daniel Cusick, E&E reporter • Posted: Tuesday, June 2, 2015

Utility regulators gave final approval for what will become the largest solar power project in Minnesota, setting the state on a trajectory to become a bigger player in the nation’s fast-growing solar market.

The $250 million Aurora Distributed Solar Project, to be built by Geronimo Energy, calls for installing ground-mounted arrays at 21 sites throughout southern and central Minnesota, according to proposals submitted to the Minnesota Public Utilities Commission.

Construction is slated to begin this fall, with first power coming from the panels in 2016, officials said. Once built, the project will transfer in ownership to development partner Enel Green Power North America.

The roughly 100 megawatts generated by the Aurora project’s arrays will be sold under a 20-year power purchase agreement with Xcel Energy, Minnesota’s largest regulated utility with roughly 1.2 million customers.

For Geronimo, headquartered in suburban Minneapolis, the PUC’s 3-0 vote wraps up a more than two-year odyssey that included having to sell the project idea not only to Xcel, which initially rejected it, but also to utility commissioners and an administrative law judge, who ultimately weighed in favor of the project (ClimateWire, Jan. 7, 2014).

In March 2014, the PUC ordered Xcel to begin negotiating with Geronimo on power purchase agreements for the solar generation. But it did not give final approval to its construction until last week, after it weighed the particulars of the project, including the siting of solar panels, integration with Xcel’s existing infrastructure and the project’s overall impact on ratepayers.

Ultimately, the PUC determined that solar was a good way to diversify the state’s energy mix while shoring up the resilience of Xcel’s grid.

“The idea was to create an energy project on the distribution system to meet load demand for specific areas,” Betsy Engelking, Geronimo’s vice president of policy and strategy, said in an interview. “That way, you avoid having to ship the power in from some other place using high-voltage transmission lines, where you have energy losses and where it costs more to move the power.”

Going head to head with natural gas

Many of the Aurora sites, ranging in size from 2 to 10 MW, will serve what Engelking described as “mixed-use developments on the urban fringe,” including a number of sites within 100 miles of Minneapolis-St. Paul.

The project will also include technology that allows solar panels to move with the arc of the sun, maximizing their generation capacity over the course of a day.

The project had added significance for many energy policy observers because it represented the first time that utility-scale solar competed head to head against new natural gas generation in a state resource review. Minnesota regulators ultimately decided that both solar and natural gas were good investments, and two new gas plants are now under construction in the state (ClimateWire, Dec. 17, 2014).

The PUC did reject three of Geronimo’s 24 proposed sites due to conflicts with zoning ordinances, and it will require the company “to work with affected neighbors to provide landscaping to screen the nearby residences from the aesthetic impact of the solar facilities and to develop other mitigation measures, as requested by state agencies and affected municipalities.”

“Because this is the first facility that we are siting, we are particularly sensitive in having it go as smoothly with local units of government as possible,” PUC Chairwoman Beverly Jones Heydinger said, according to a report in the Minneapolis Star Tribune newspaper.

Yet, even with those restrictions, the Aurora project will significantly elevate solar’s profile in the state, where commercial wind power has been the dominant renewable energy resource for years. When fully built by 2017, Aurora should generate enough power to meet the needs of roughly 20,000 homes, officials said.

While Aurora stands as the largest solar project authorized to date in Minnesota, the record may not stand long. Thanks to a recent state law requiring that investor-owned utilities produce or procure 1.5 percent of retail electricity from solar resources by 2020, other even larger proposals are in the works.

Xcel has requested PUC review of at least three additional projects, including one north of the Twin Cities that would roughly match Aurora’s total output, but the arrays would be built at a single site rather than scattered throughout the utility’s service territory.

The utility is also weighing proposals from community solar developers and solar gardens, a process that has become controversial after Xcel early this year petitioned the PUC to allow it to reject many of its initial proposals because they were over-scaled. Last month, Xcel confirmed that it planned to jettison most of the 560 MW of community solar proposals it has received so far, retaining only about 80 MW worth of projects (EnergyWire, May 4).

Solar developers are resisting Xcel’s move, saying it would jeopardize millions of dollars in investment already made in the state’s community solar market.