PUC orders Xcel Energy to refund customers for 2011 Sherco outage costs

State regulators have ordered Xcel Energy to refund customers for costs related to a catastrophic failure at its Becker coal plant 13 years ago.

On Nov. 19, 2011, a major mechanical failure at the Sherco coal-fired power plant caused a fire and extensive damage. Repairs to Unit 3 cost more than $200 million and shut down the unit for almost two years.

During the outage, Xcel had to buy replacement power and additional fuel from alternative sources. The Minnesota Public Utilities Commission allowed Xcel to bill customers for the extra cost.

For the past decade, the PUC held off determining whether the replacement costs were reasonable, while Xcel was in litigation with turbine manufacturer General Electric.

An administrative law judge recently found that Xcel’s failure to prudently operate and maintain Unit 3 contributed to the accident.

Xcel will refund customers about $58 million in replacement power costs, minus credits customers have already received for Xcel's settlement with GE. The final amount of the refunds has yet to be calculated.