Minnesota Xcel Energy Agrees to IRP Settlement, Creating a Path Toward a Clean, Resilient Energy Future
Settlement Emphasizes Renewable Energy, Battery Storage and Energy Independence
FOR IMMEDIATE RELEASE
February 21, 2025
Saint Paul, MN– On February 20, 2025, the Minnesota Public Utilities Commission approved the settlement agreement for Xcel Energy’s 2024 Integrated Resource Plan (IRP). The settlement represents an important evolution in Xcel’s clean energy transition strategy, emphasizing distributed renewable energy, battery storage, and customer savings and participation. The settlement and the Commission’s decision include critical agreements that will solidify Xcel Energy’s commitment to reduce reliance on fossil fuels, retire coal plants, address data center-driven load growth, and advance clean and affordable energy.
The Distributed Solar Parties (Vote Solar, the Cooperative Energy Futures, the Environmental Law & Policy Center, and the Institute for Local Self Reliance) intervened in Xcel’s resource planning processes beginning with the previous IRP in 2019, championing local and rooftop solar energy solutions as a way to deliver energy that is both affordable and reliable to all customers, including those that are low-wealth.
Utilities like Xcel often meet energy demand by expanding fossil fuel infrastructure or building large-scale power plants. Throughout the IRP process, the Distributed Solar Parties focused on how Xcel could enhance its Distributed Capacity Procurement (DCP) process to more effectively shift investments to local solar, battery storage, and other distributed energy resources.
The settlement agreement authorizes 2,170 MW of new capacity, including 1,152 MW of gas-peaking resources, 380 MW of standalone battery storage, and hybrid solar, wind, and battery projects, while committing to 3,200 MW of wind, 400 MW of solar, and 600 MW of storage by 2030. The agreement also leverages $5.7 billion in Inflation Reduction Act (IRA) tax credits to keep annual rate increases below 1%. While avoiding new high-capacity factor gas plants, the settlement maintains flexibility for future clean firm capacity solutions, positioning Minnesota toward carbon-free electricity compliance under state law.
Partner Quotes:
“This settlement is a step toward a cleaner, more equitable energy future. By prioritizing renewable energy, Xcel Energy is making critical investments that will lower costs, reduce emissions, and expand access to clean energy for all,” said Will Kenworthy, Vote Solar’s Midwest Senior Regulatory Director. “But Minnesota can do more to maximize the value of Distributed Energy Resources, like rooftop solar. We look forward to engaging with Xcel and other stakeholders to develop a broad, fair, and cost-effective program that leverages the considerable opportunities of distributed energy resources.”
“To meet the growing appetite of data centers without backsliding on our climate goals, we need creative and flexible near-term energy solutions,” said Erica McConnell, Staff Attorney with ELPC. “The distributed capacity procurement (DCP) program included in this settlement enables the improved integration of DERs, which is positive progress toward that goal. We’re eager to collaborate with Xcel to ensure its program is robust enough to meet the challenges of the day.”
“While not as ambitious as we had hoped,” said Pouya Najmaie, Policy and Regulatory Director at Cooperative Energy Futures. “This settlement represents a compromise that brings Minnesota closer to achieving an equitable clean energy future. We are proud of our advocacy in this process and we appreciate the commission’s willingness to take our suggestions into consideration. We also hope Xcel will continue to work with us on third party-ownership when developing its virtual power plant program.”
“Xcel needs to do more to plan for and to integrate distributed energy resources like rooftop and community solar that create widespread economic benefits. We’re happy about the progress on the state’s carbon reduction goals, and look forward to future discussions about maximizing the use of cost-effective local energy resources,” said John Farrell, co-director of the Institute for Local Self-Reliance.
About Vote Solar
Vote Solar is a non-profit advocacy organization dedicated to advancing state-level policies that make solar and clean energy solutions accessible to all. Since 2002, Vote Solar has worked to build a just and equitable energy future by leveraging deep policy expertise, strategic partnerships, and public engagement. In the face of powerful opposition, Vote Solar champions policies that expand clean energy access, drive investment in frontline communities, and accelerate the transition to 100% clean energy.
About the Environmental Law & Policy Center
The Environmental Law & Policy Center is the Midwest’s leading environmental legal advocacy organization. We drive transformational policy changes with national impacts.
About Cooperative Energy Futures
Cooperative Energy Futures is a member-owned clean energy cooperative that works to empower communities across Minnesota to build energy democracy through solutions that are clean, local, and ours. CEF has over 1000 member-owners across Xcel’s Minnesota service territory currently participating in community solar, on-site solar, and energy efficiency solutions. CEF has a particular focus on empowering low-income households, communities of color, and renters to participate in clean energy solutions that work for everyone. CEF empowers its members to create an energy future that protects community health and affordability and builds community wealth.
About Local Self-Reliance
The Institute for Local Self-Reliance is a national research and advocacy organization that partners with allies across the country to build an American economy driven by local priorities, accountable to people and the planet.