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Xcel presents $5.3 million plan to improve North Dakota power reliability

BISMARCK - After being criticized for a series of power outages last spring in Fargo, Xcel Energy has unveiled a $5.3 million plan for improving reliability to its North Dakota customers, but is still debating how to recover the cost from customers.

BISMARCK – After being criticized for a series of power outages last spring in Fargo, Xcel Energy has unveiled a $5.3 million plan for improving reliability to its North Dakota customers, but is still debating how to recover the cost from customers.

Xcel presented the plan Wednesday to the state Public Service Commission, which called an informal hearing last month after the Minneapolis-based utility experienced eight outages in Fargo between April 22 and May 13 affecting more than 24,000 customers.

The company hasn’t had a feeder outage in Fargo since then.  

Xcel officials were looking to the commission for a signal that it will allow the company to recover the cost of the reliability improvements from customers. The company operates in eight states and serves more than 94,000 customers in North Dakota, including Fargo, Grand Forks and Minot.

“We don’t want to do something that the commission down the road is going to disagree with,” said David Sederquist, senior regulatory consultant for Xcel.

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But commissioners were careful not to commit to anything, noting rate increases require a public input process with hearings.

“If you think it’s a good idea, just do it,” Commissioner Brian Kalk said.

Under Xcel’s last rate case in 2012 – which included performance targets that the company has missed, costing it nearly $400,000 in credits paid to customers – it isn’t allowed to seek a rate increase until 2018, which PSC chairwoman Julie Fedorchak called a “practical challenge.”

“I feel like this is part of your business operations and you should just be doing it,” Commissioner Randy Christmann said.

The plan calls for:

-- Removing 29,000 feet of unjacketed cable like the 40-year-old feeder line blamed for two outages May 1 and 2 that affected a total of about 4,600 Fargo customers. The company estimates the cost at $2.8 million, with completion by the end of 2018.

-- Installing 24 additional IntelliTeam switches and related equipment in Fargo next year to automatically reconfigure power to areas affected by outages. The measure would boost customer coverage from 21 percent to 76 percent at an estimated cost of $1.5 million. A $2.6 million option would also add switches in Minot and Grand Forks.

-- Reducing the chance of utility pole fires by replacing wood cross-arms with fiberglass and replacing ceramic insulators with polymer. Xcel proposes starting with a pilot project of 20 poles in Fargo this year and expanding the retrofit to 130 additional poles near high-traffic roadways throughout its North Dakota service area by November 2018 at a cost of $500,000.

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-- Installing additional pole top and lightning arrestor sets on all 18 Fargo mainline feeders, an action the company normally takes only if the feeders are on its worst-performing list.

“We’re kind of going above and beyond our normal standards and practice,” Sederquist said.

Options discussed for recovering the cost include amending the 2012 rate case, seeking recovery in 2018 or applying for an advance determination of prudence, which is an early signal that the PSC will ultimately allow a company to recoup project costs from ratepayers.

Sederquist said Xcel officials will work with PSC staff to “find out what the best balance is.” He said the cost to consumers is “fairly reasonable,” and Xcel is willing to start the work this summer.

“We have to make a determination whether we feel confident to move ahead,” he said.

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