Xcel shares vision for power mix at breakfast

From extending the life of the Monticello nuclear plant to building one of the nation’s largest solar farms at Sherco, Xcel Energy leaders laid out their roadmap for a carbon-free future last week, while also addressing concerns about data centers.

The remarks came during the Monticello and Becker Area Community Breakfast on Oct. 1 at the Monticello Community Center, where a strong turnout filled the Mississippi Room to hear about the region’s energy future.

“It’s an exciting time in the energy industry,” said Ryan Long, president of Xcel Energy–Minnesota, North Dakota and South Dakota. “We’re building the grid of the future right here in central Minnesota.”

Attendees at the event last week included Monticello Mayor Lloyd Hilgart, commissioners from Wright and Sherburne counties, chamber of commerce representatives, city staff and officials, sheriff’s deputies and others.

The annual breakfast, sponsored by local chambers of commerce, featured presentations from top Xcel executives who touched on both day-to-day operations and the company’s long-range carbon-free goals.

Michelle Neal, who recently succeeded Gregory Brown as manager of the Monticello Nuclear Generating Plant, told attendees the facility continues to power more than half a million homes across the Upper Midwest.

The plant also remains Monticello’s single-largest taxpayer and a cornerstone of its economy, with about 350 full-time employees and several hundred more contractors and security staff during peak operations.

Neal highlighted the plant’s spring 2025 refueling outage, which lasted about 35 days and brought more than 1,000 specialized workers to Monticello.

“We did a lot to replace valves that were at the end of life and to make sure the plant is reliable for the next two years,” she said.

The next scheduled outage, set for 2027, will stretch 50 to 55 days — longer than usual because the plant will refurbish its main generator rotor and perform work on the turbine.

Neal described the rotor overhaul as “refreshing the moneymaker” that drives the facility.

“Everything we do revolves around keeping that generator rotor in top condition,” she said, noting the work will help extend the plant’s operating life following its recent federal license renewal through 2050.

Monticello also continues to store spent nuclear fuel onsite, with federal approval for its dry cask storage facility currently running through 2040. If no federal solution is available by then, Xcel would seek state approval to add more storage on the site.

The plant’s property tax contributions continue to anchor local budgets. In 2025, Xcel is projected to pay $5.38 million to the city of Monticello, along with $6.45 million to Wright County and $3.21 million to the school district. While the city’s share has remained relatively stable, overall contributions have fluctuated since 2022, as the plant’s market value shifts.

Sherco transition: Coal to solar

Speakers also addressed the ongoing transition at the Sherburne County Generating Station (Sherco), long known as Minnesota’s largest coal plant.

Unit 2 was retired at the end of 2023, Unit 1 is set to close in 2026, and Unit 3 — Sherco’s largest unit — will run until 2030. After that, Xcel will fully exit coal.

But the plant isn’t going dark. Portions of Sherco’s retired equipment are being converted into synchronous condensers — giant rotating machines that don’t generate electricity but help stabilize the grid by regulating voltage and frequency as more renewable energy comes online.

“Basically, you take a generator, strip it down, and run it as a massive motor that provides stability to the system,” explained Sherco director Brian Behm.

As the coal units shut down and the plant is repurposed, Xcel leaders stressed that workers won’t be left behind. Through its Just Transition process, the company is working to ensure employees and the Becker community remain supported. Xcel noted it has decommissioned 24 coal plants nationwide without layoffs, and some Sherco employees are expected to transition to roles at Monticello.

Sherco is also in the midst of another transformation — becoming one of the region’s largest solar hubs. The Sherco Solar project, now under construction across Becker and Clear Lake, is planned to cover about 5,000 acres with more than 1.5 million solar panels. Once fully online by 2026, the project will generate 710 megawatts of electricity — enough to power 150,000 homes — while delivering an estimated $350 million in local economic benefits.

Luke Molus, operations manager for Sherco Solar, noted that Phase 3 in Clear Lake is nearing completion, with Phase 4 — a 200-megawatt expansion now underway — expected to wrap up by the end of the year.

To highlight how technology is changing the solar game, Xcel showed a video of new AI-powered robots being used at the site. The machines, guided by satellite and laser precision, lift and drive steel piles into the ground around the clock with minimal human input, dramatically reducing labor needs and improving safety.

At the same time, Molus said solar panels themselves are becoming far more efficient, meaning newer installations can produce more electricity with fewer panels — taking up less space for the same output. For example, panels installed on Sherco Solar 1 generated about 570 watts each, compared with 590-watt panels at Sherco 3 and up to 600-watt panels expected at Sherco 4.

“Just in the last couple of years we’ve seen a big jump in output,” Molus said.

Xcel has also broken ground on long-duration battery storage at the Sherco site, in partnership with Massachusetts-based Form Energy. The 10-megawatt pilot will allow wind and solar energy to be stored and dispatched over 100 hours — providing backup power during stretches when the wind isn’t blowing and the sun isn’t shining.

While the spotlight often falls on renewables, Long stressed that diversity is key to reliability.

“You can’t run a grid on just one source,” he said. “Sometimes the sun isn’t shining. Sometimes the wind isn’t blowing. Nuclear is always there, and natural gas can be turned on instantly when needed. Diversity is the key.”

Long also explained that even the massive Sherco Solar project represents only a modest share of Xcel’s overall portfolio.

“When it’s complete, all that solar will still only make up about 8% of our Upper Midwest energy mix,” he said.

Looking ahead, Xcel leaders said they are evaluating all options to meet rising demand — from battery storage to renewables to advanced reactor designs now under development nationwide. In Minnesota, however, new nuclear plants remain off the table because of the state’s long-standing moratorium.

That issue surfaced during the Q&A, when Sherburne County Commissioner Raeanne Danielowski urged the state to revisit the ban.

“I think we can all agree that nuclear has come a long way, and it’s probably time for Minnesota to lift that moratorium,” she said, pointing to the massive electricity demands expected from new industries like data centers. “Nuclear can and should be part of meeting our needs going into the future.”

Long said the recent 20-year license extension for Monticello reflects how far nuclear’s public perception has shifted. A decade ago, Xcel was under pressure to consider early retirements; today, regulators approved the extension to 2050 in record time.

“If you care about carbon and you care about reliability, nuclear is an excellent solution,” Long said.

Energy demand and data centersEven with nuclear, solar and storage in the mix, Xcel leaders acknowledged that new challenges are emerging. Chief among them: massive data centers, which could reshape the region’s electricity needs almost overnight.

During the Q&A, Mayor Hilgart raised a question that hit close to home, asking how Xcel plans to meet the enormous electricity demand these facilities would bring — and, just as importantly, how the company can ensure the costs aren’t shifted onto everyday homeowners.

Long acknowledged Hilgart’s concern, saying the scale of data center electricity usage is eye-opening.

“We’ve talked to data centers who would love to build a 1,000-megawatt facility in one place. To give you perspective, that’s more than the total demand of both North Dakota and South Dakota combined.”

To help put that in everyday terms, one megawatt of electricity can power roughly 750 homes. A gigawatt equals 1,000 megawatts — enough to serve three-quarters of a million households.

Long emphasized that Xcel will not allow such projects to burden residential customers. The company has proposed a “super large load tariff” at the Minnesota Public Utilities Commission, which would require data centers and other massive users to pay the full cost of the new generation, transmission lines and staffing they require.

“The goal is to make sure our existing customers are insulated from those costs,” Long said.

He also noted that Xcel has set an initial cap of 1,300 megawatts for all new data center demand system-wide. That’s roughly twice the output of the Monticello nuclear plant — or enough electricity to power nearly a million homes. The ceiling is meant to prevent the grid from being overwhelmed by a single industry and to pace growth in a manageable way.

The tariff could also apply to other electricity-intensive industries, such as hydrogen, cryptocurrency mining or manufacturing.

Long added that, if structured properly, data centers could even benefit other customers.

“If you structure the contracts the right way, it means they pay all their costs and their share of fixed costs,” he said. “That allows us to spread those fixed costs across more customers, which actually helps with affordability for our existing customers — rather than letting them be subsidized.”

The exchange underscored both the opportunities and challenges facing Xcel as it works to balance reliability, affordability and the region’s growing appetite for clean energy.