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Xcel: Winter storm customer costs should be ‘minimal’

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Mike McLeod of Xcel Energy talks March 18 about Winter Storm Uri. (Lisa Dunlap Photo)

Copyright © 2021 Roswell Daily Record

Xcel Energy customers should not see huge electric bills due to Winter Storm Uri, according to a regional manager for the utility company that serves southeastern New Mexico and western Texas, as well as operates in six other states.

Mike McLeod, regional manager for community and economic development, also predicts that the utility will want to own and store its own natural gas reserves for the future.

He made a presentation Thursday before the Chaves County Board of Commissioners about some of the impacts of the snow and extreme cold temperatures that affected the United States, northern Mexico and portions of Canada from Feb. 13 to Feb. 17.

Electrical outages occurred for some customers of Xcel and other electrical cooperatives and utilities that participate in the Southwestern Power Pool (SPP), which manages the bulk power grid and wholesale power market for its members in 17 central U.S. states.

McLeod said the outages occurred due to heavy demand for electricity throughout the SPP area as temperatures stayed below freezing in many areas for long hours over several days, as well as a lack of natural gas supplies, in part because wellheads froze in the fields. Gas supplies were curtailed by 30% to 70% during the storm, McLeod said.

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The SPP required two controlled outages among all its members when it determined that extreme demand in the 17 states was going to overwhelm its electricity supplies. One outage lasted for 30 minutes, while the other went on for up to two and a half hours in some areas. Some substations that serve critical infrastructure or operations were not involved in the outages.

McLeod said it was the first time since 1940 that the SPP has required controlled outages. It also was the first time for Xcel and its parent company, Southwestern Public Service Co.

The SPP, he said, is not to be confused with ERCOT, the Energy Reliability Council of Texas, which manages the electrical grid and deregulated market for a large portion of Texas. Some areas served by ERCOT experienced extended blackouts for long hours over several days. The blackouts have been alleged to be the cause of deaths and billions of dollars in property damage.

McLeod said the SPP system was “incredibly reliable.”

“What really caused the event in our opinion, the vast majority, was that natural gas got curtailed,” he said. “It was not really anybody’s fault. It was just those unprecedented low temperatures were freezing up the fields.”

He said that coal plants helped keep power on.

“The coal plants really were the work horses during that winter storm,” McLeod said. “We keep 47 days of fuel on site at our coal plants, so fortunately they ran 24/7 non-stop during that entire time.”

He said Xcel will have coal plants for at least a couple of years more, but that national policy is now to switch to renewable energy generation to reduce greenhouse emissions. He also said that a “lesson learned” is that Xcel will want to own and store natural gas reserves, as it has done with coal.

He added that wind generating sites provided about 30% of Xcel’s electricity during the storm. The company had put cold-weather packages on them so that they will continue to operate even if temperatures drop to 22 degrees below freezing, but there were some days when wind was not present.

McLeod also said that Xcel has asked the Public Regulation Commission for permission to spread the costs of fuel purchased that exceeded sales during the storm over 24 months, instead of charging them to customers the month the use occurred, as usually happens. As a result, he said, the impact to customers should be reasonable.

“We are thinking something less than $200 a customer, total, is what the impact will be,” McLeod said. “We are hoping that it is less once we reconcile our sales. It should be very minimal.”

An Xcel spokesperson said the company expects that customers also will see the storm costs spread over two years.

McLeod said that the local situation is different from that experienced by some people living in the ERCOT region, which has a deregulated market allowing different providers to act as middle-men in selling power to consumers. Texas customers with fixed rate plans probably will not see big spikes in bills. But, according to various news reports, Texas customers on variable rate plans have been billed more than $10,000 for power used during the storm.

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