Xcel Energy proposes five-year, $58M natural gas innovation plan

Xcel Energy proposed a new initiative to start off the new year — a $58 million, five-year Natural Gas Innovation Plan in Minnesota.

The proposal includes a portfolio of pilot projects across an array of technologies that have the potential to significantly reduce carbon emissions from the natural gas system.

“Xcel Energy shares Minnesota’s bold vision for a clean energy future. To achieve that vision, we need to use every tool we have,” Chris Clark, president of Xcel Energy—Minnesota, South Dakota and North Dakota, said. “This plan moves us toward a cleaner natural gas system while continuing to serve our Minnesota customers with reliable, affordable energy to power their lives.”

If approved by the Minnesota Public Utilities Commission, the proposal would reduce or avoid approximately 54,000 metric tons of carbon dioxide emissions annually across upstream production, the natural gas distribution system, and customer energy use. This is the same as taking around 12,000 gasoline-powered vehicles off the road each year.

Specifically, the proposal includes:

• Using renewable natural gas (RNG) generated from livestock waste in western Minnesota and materials diverted from landfills in Shakopee and Inver Grove Heights.
• A clean hydrogen project at the Sherco plant site in Becker to create steam for industrial use. The 5-megawatt electrolyzer would use renewable energy from solar or wind facilities to produce clean hydrogen.
• Advanced methane leak detection that will enable Xcel Energy to reduce leakage from its distribution system.
• Carbon offsets related to forest management, tree planting and a biochar project that uses organic material diverted from a landfill.
• An approximately 500-ton ground source heat pump project to provide building heating and cooling in an urban area.
• Strategic electrification, including custom projects with energy modeling for large customers.
• A weatherization and strategic electrification program for tribal housing that includes manufactured homes at the Prairie Island Indian Community near Red Wing.

Also, Xcel Energy’s plan will generate an estimated 417 construction and other jobs in Minnesota over five years. In addition, it provides for local workforce development and training, helping to develop local expertise in growing careers like renewable natural gas, hydrogen, district energy, and strategic electrification.

If approved, Xcel Energy expects the average residential natural gas bill impact will be about $1.39 per month from 2025-2029.

“We are committed to keeping bills low for customers and assuring reliable service while achieving a clean energy future,” Michael Lamb, senior vice president, distribution and gas at Xcel, said. “Our plan will support a strategy to break down market barriers to a portfolio of diverse, clean, and innovative heating technologies, including clean and renewable fuels, hydrogen, electrification, and other clean heat options.”

Xcel Energy, based in Minneapolis, provides the energy that powers millions of homes and businesses across eight Western and Midwestern states.