Xcel Energy spent $146.5M to repair plant

Xcel Energy has spent more than $146.5 million so far to repair its damaged Sherco power plant in Becker, about 45 minutes northwest of the Twin Cities.

The figure is the most detailed cost assessment yet from the company, which released the data in a filing Monday to the Public Utilities Commission.

The company expects most of the repair costs will be covered by insurance. According to the documents, Xcel's already received $104 million in insurance payments.

But the damaged generators also cost the company millions of dollars. In its filing to the PUC, Xcel reported costs exceeding $2.8 million through February 2013 for items not covered by insurance as well as the company's deductible. The undamaged generators are still running. But Xcel has spent more than $33 million to offset its customer's energy needs, mostly from last summer's unseasonably hot weather.

The largest of Sherco's three generators was badly damaged in late 2011, following routine maintenance. Crews are still repairing the coal-fired plant.

Xcel originally planned to have its Sherco 3 Unit back online by the end of the month, but repairs are more time consuming than originally thought. Workers had to re-do some highly skilled work while reassembling the generator.

Laura McCarten, a regional vice president for Xcel, expects the plant to be fully operational later this year.

"We expect in September," McCarten said. "There's a few uncertainties that could affect that, but right now that is our best estimate of when we'll have plant back operating."

The cause of the accident remains under investigation.

XCEL BACKS OFF OF RATE HIKE REQUEST

Xcel Energy also has decided to cut back its proposed electricity rate hike. The utility proposed at 10.7 percent increase late last year, but on Monday asked the Minnesota Public Utilities Commission for an 8.2 percent increase. The state commerce department had opposed the increase as too high and suggested an increase of 3 to 4 percent would be sufficient.

Xcel needs an additional $220 million, McCarten said.

"The biggest part of it is the cost of investment in our nuclear power plants, largely at Monticello," McCarten said. "These power plants provide carbon-free electricity to our customers and we need to make these investments today so that they can continue to operate another 20 years and continue to serve our customers."

McCarten said the utility was able to adjust its rate request after taking into account delays in the repair at the Sherco plant.

"The costs we're talking about that we are proposing to remove from 2013 rates and recover in future years are ongoing costs associated with plant depreciation and property tax," McCarten said.

Madeleine Baran contributed reporting to this story

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