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.
“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.
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.
“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.”
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