May 06, 2024

Erica S. McConnell

Pursuing Equity & Energy Justice in Xcel’s Distribution Planning

Xcel’s IDP offers the venue to discuss the critical intersection of equity and energy justice with the utility’s plans for its distribution system.

In June of 2023, after the Minnesota Public Utilities Commission decided Xcel’s most recent rate case, I wrote about why it was so powerful that the Commission recognized that energy justice is relevant for ratemaking. It also directed Xcel to address certain energy justice-driven proposals in its next Integrated Distribution Plan (IDP). 

Xcel unveiled its latest IDP in November of 2023, and ELPC filed comments in coalition with our partner organizations as the Grid Equity Commenters. As in the rate case, ELPC and its partners underscored the need to integrate equity and energy justice into Xcel’s distribution planning and investments, and we offered concrete recommendations on how Xcel should do it. 

The IDP gives the Commission a longer-term view of Xcel’s distribution system planning and strategy, which can later serve as a guide for the Commission’s decisions on specific cost recovery requests from the utility in a rate case.  

Current Inequities in the Distribution System  

In our IDP comments, the Grid Equity Commenters included the latest research from Drs. Gabriel Chan and Bhavin Pradhan of the University of Minnesota into race- and income-based disparities in reliability and outages, involuntary disconnections, and hosting capacity for distributed energy resources like local solar and storage. This analysis supplements prior data from Dr. Chan in his expert testimony on behalf of the Just Solar Coalition in Xcel’s most recent rate case.  

Xcel also filed its own disparity analysis in a separate docket (where ELPC also plans to engage) and discussed it in some detail in its IDP comments.  

Reliability and Outages 

Both the Chan/Pradhan and Xcel analyses found that long-duration outages were more common in communities with higher populations of people of color. For example, the Chan/Pradhan analysis found that “from 2020-2022, the 10% of communities with the highest population of people of color were 47% more likely to experience an extended outage than other communities.”  

Long-duration outages, outages greater than 12 hours, can harm medically vulnerable populations that rely on electrically powered equipment; cause a refrigerator full of food to spoil; and cause temperature stress for populations in extreme temperatures.  

There is a clear racial disparity in long-duration outages that should be addressed through investments in distribution grid improvements that improve reliability in disadvantaged communities. Xcel’s IDP is the appropriate forum to evaluate distribution planning solutions to address these inequities. We urged the Commission and Xcel to begin to address these disparities in the IDP where possible, in addition to continuing to explore other avenues to address them. 

Involuntary Disconnections 

Both analyses also found significant race- and income-based disparities in involuntary disconnections. As Xcel stated: “The number of disconnections is higher in identified lower-income areas and increases when the proportion of people of color increases within an income group.” 

While Xcel has several programs in place to mitigate disconnections, all these programs have been in place for many years, with the same racial disparities in disconnections persisting. Something more and different needs to be done.   

In the near term, we encouraged the Commission to order a study of the costs and benefits of reinstating a moratorium on some or all utility disconnections. The Commission could rely on the results of this study to establish an appropriate moratorium until Xcel can develop a more robust set of measures to eliminate racial disparities in disconnections.  

In the longer term, we emphasized the need for more robust pathways for communities and individuals to own or otherwise benefit from local clean energy, which can help customers save energy and money, and therefore reduce the chance of disconnections. The IDP is integral to enabling grid access for such community-based energy.  

Hosting Capacity 

Both analyses showed that hosting capacity was greater on average in communities with higher populations of color. In other words, the grid in these communities generally has more capacity for people to install local clean energy than in other areas, such as more rural or suburban areas that have seen larger numbers of community solar gardens.  

While the data show this is true on average, we encouraged the Commission to develop more granular data to enable Xcel to pinpoint underserved areas for targeted grid improvements, or even target areas with a high availability of hosting capacity to integrate local clean energy.  

In addition, we noted that these hosting capacity results may be related to the relative lack of adoption of local solar and other local clean energy in communities with higher populations of color and/or the co-location of large customers in these communities that have required significant infrastructure investments. This potential correlation speaks to the necessity of advancing policies outside of the IDP to enable local clean energy, in addition to efforts within the IDP to expand hosting capacity and otherwise facilitate local clean energy adoption.   

Integrating Equity into Distribution Planning Going Forward 

Xcel’s IDP offers the venue to discuss the critical intersection of equity and energy justice with the utility’s plans for its distribution system. Through assistance from our technical experts, the Grid Equity Commenters made specific and concrete recommendations to better integrate equity into Xcel’s distribution planning and investments.  

For example, in its IDP, Xcel indicated its intention to pursue investment in a distributed energy resource management system (DERMS), which in essence is a platform that could enable the utility to better manage and leverage distributed energy resources, like local solar and storage, on its system. While a DERMS holds a lot of promise as far as advancing distributed energy resources, the devil is in the details. We recommended the Commission require Xcel to provide a detailed DERMS roadmap – including specifically addressing how it would incorporate equity and energy justice principles into its DERMS use cases, such as flexible interconnection – to ensure any DERMS investment achieves its potential.  

As another example, we recommended that the Commission require Xcel to reevaluate utilizing Integrated Volt/Var Optimization (IVVO). Xcel had dismissed IVVO in its IDP with very limited justification. However, this tool – which essentially improves the efficiency of electricity delivery by optimizing voltage – has the potential to reduce bills for lower-wealth customers if deployed in an appropriately targeted way. We urged the Commission to require Xcel to consider targeted deployment in environmental justice communities.  

Commenting on Xcel’s IDP has now closed, and the Commission will consider it in the coming months. As always, more work remains to be done, and ELPC anticipates there may be additional stakeholder engagement opportunities on these issues following the Commission’s decision, in advance of Xcel’s next biennial IDP in 2025.  

We also continue to share lessons learned in our advocacy in similar proceedings in other states, including in particular Michigan and Illinois.