Note: Xcel is not currently accepting proposals for this program. The most recent application deadline was April 1, 2013. See the program web site for information regarding future solicitations.

The Xcel Energy Renewable Development Fund (RDF) was created in 1999 as an outcome of 1994 Minnesota legislation concerning spent nuclear fuel at Xcel Energy’s Prairie Island Nuclear Plant. The original legislation has been amended and added to several times, expanding the amount of money collected by the fund and prescribing funding allocations for specific programs. Funding available for the grant program thus depends on the other funding obligations that need to be met with RDF funds at any given time. The Xcel RDF provides grants periodically through a Request for Proposals (RFP) process. Renewable-energy technologies eligible for funding typically include wind, biomass, solar, hydroelectric generators and fuel cells. Funding is generally split between new development projects that result in the production of renewable energy, and research and development. Wind energy production projects were not eligible for funding under the third and most recent grant cycle and will likely remain so under future cycles. However, wind remains generally eligible for projects not engaged in energy production.

The first round of grants from the Xcel Energy RDF program, completed in 2001, supported 19 projects with nearly $16 million in funding. In 2005, the Minnesota Public Utilities Commission (PUC) approved the second round of projects funded from the Xcel Energy RDF program - 29 projects totaling nearly $37 million. The selections for the third and most recent round of projects - 22 projects totaling $22.6 million -- were approved by the PUC in April 2008. During the third cycle of funding a total $8.2 million was awarded to 5 energy production projects and $14.4 million was awarded to 17 R&D projects. Because of delays in the release of the fourth round of funding, there is approximately $30 million available for grants in the fourth round of funding.

In April 2012, the Minnesota Legislature enacted a bill (S.F. 2181) to clarify the purpose of the RDF and create reporting requirements. Funds in the RDF account may only be used for the following purposes:

• To increase the market penetration of renewable electric energy resources in Minnesota at reasonable costs
• To promote the start-up, expansion, and attraction of renewable electric energy projects and companies within Minnesota
• To stimulate in-state research and development into renewable electric energy technologies
• To develop near-commercial and demonstration scale renewable electric projects or near-commercial and demonstration scale electric infrastructure delivery projects if those delivery projects enhance the delivery of renewable electric energy

Xcel must submit an annual report to the legislature by February 15 describing the projects funded by the RDF. In addition, the projects receiving funds from the RDF must supply a written report detailing the project's financial, environmental, and other benefits. For details on past and current projects, please see the program web site.

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