Despite much dissent, the Minnesota utilities approve the sale of a coal-fired power plant. But obstacles remain
A plan to sell, rather than shut down, North Dakota’s largest power plant has received approval from the boards of cooperative utilities in rural and suburban Minnesota.
Of the 28 utilities, only one voted against the proposal last week, but it was the largest of the group, Connexus Energy, based in the northern suburbs of Minneapolis.
Conservationists helped organize an opposition that argued that utilities would be better off shutting down the plant than agreeing to a sell-off plan that included a 10-year contract to continue buying coal-fired power . Opponents said the coal deal was one of many provisions in the sale that was not in the best interests of consumers or the environment.
The deal is now close to being concluded, with opponents now focusing on challenging the sale through state and federal regulators. One of the next steps is for the Minnesota Public Utilities Commission to approve the sale of an interstate power line as part of the plant sale agreement.
The fact that there has been debate in many cooperative councils shows the growing importance of environmental concerns in utilities which have long been slow, compared to larger investor-owned utilities, to reduce emissions. or invest in renewable energies.
Michael Overend, a client of Cooperative Light & Power in the northeast, said he was disappointed his board of directors voted 3-2 to support the sale.
“This is important because, for me, climate change is the most important problem we are facing right now,” he said. “We are leaving a terrible mess for our children and their children. “
Overend, a veterinarian and a donor to environmental groups, said the positive thing that could emerge from this debate is that cooperative customers are becoming more engaged and empowering leaders.
Opponents of the sale said too few co-op customers – who are shareholders or “member-owners” in the co-op business model – were aware that an important vote was underway.
The proponents of the sale “have done a great job of controlling the information, not making it public, not making it available and having a very short time frame for the decision to filter through local co-ops,” said Duane Ninneman, executive director of Clean Up the River. Environment, or CURE, a Minnesota-based nonprofit that works on environmental issues and improving accountability in electric co-ops.
The plant, Coal Creek Station, is sold by Great River Energy, a Minnesota company that supplies power to the 28 member utilities. The buyer is Rainbow Energy Marketing of North Dakota, which has announced plans to upgrade the plant using carbon capture technology.
Great River confirmed the results of the vote in a brief statement and made no comment from its CEO, David Saggau, or any of its executives.
Great River said last year it would close the plant in 2022 after years of operating at a financial loss, but then changed course and in June announced plans to sell the plant and power line. . The change follows a push by North Dakota state and local leaders to prevent the closure and find a buyer.
Great River had little to say publicly throughout the process. Rainbow Energy did not respond to a request for comment for this story.
Much of the public lobbying was carried out by unions whose workers would lose their jobs if the factory closed, such as the International Union of Workers of North America.
“We’re really happy to be able to turn the page and move forward in North Dakota,” said Kevin Pranis, who works for the union office that oversees Minnesota and North Dakota, speaking of the approval of Minnesota co-ops. Its members take care of the maintenance of Coal Creek and other power plants, as well as wind turbines.
He said much of the campaign against the sale was based on a misunderstanding of what Great River is offering. The sale agreement says Great River would continue to buy most of the plant’s output for about two years, then buy a much smaller share, 300 megawatts, for the remaining eight years.
Pranis sees the sale as an opportunity for a fresh start in the development of renewable energy in North Dakota. He believes Minnesota environmental groups fail to understand how the closure of Coal Creek would reinforce the perception that renewables are killing jobs, contributing to local political opposition to wind and solar projects in North Dakota.
“Compromise is needed to move forward,” said Pranis.
Oppose a “highly speculative” plan
Opponents of the sale see the plan as so deeply flawed that there is no room to support it.
Connexus Energy set out some of the concerns in an open letter to its customers released on Friday, explaining why its board of directors voted unanimously to reject the proposal. Under Great River Energy’s governance structure, Connexus is still bound by the sales contract because enough other utilities have voted to approve it.
“The Connexus Board of Directors believes that the decision and approach to sell the Coal Creek station and related transactions did not deliver the savings Connexus expected for its members or reduce greenhouse gas emissions. greenhouse allowing the continued operations of this plant, ”said the letter, signed by CEO Greg. Ridderbusch and the president of the board of directors Fran Bator.
They said shutting down the plant would result in projected savings of $ 28 million for their utility in 2023, while after the plant is sold, continuing to purchase electricity would result in savings of $ 20 million. in 2023.
Great River Energy disputes these figures, saying the $ 28 million in savings is based on a forecast of market conditions made last year and that the $ 20 million is based on a forecast this year, so both are not comparable. Great River said the sale would result in net savings of around $ 130 million over 15 years, spread across the 28 members.
Connexus considers the carbon capture installation project at the plant to be “highly speculative” and dependent on federal tax credits.
In addition, Connexus takes issue with the idea, put forward by Great River, that the sale of the plant will help maintain the reliability of the electricity grid for customers, noting that the multi-state grid that includes Minnesota and North Dakota has a large powerhouse capacity and is unlikely to face the kinds of reliability issues seen in Texas this winter.
Connexus serves approximately 138,000 households and businesses, making it the largest of the co-operatives served by Great River, which serves approximately 700,000.
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The board of directors of the second-largest co-op, Dakota Electric, voted 8 to 3 to support the sale, according to those in attendance.
“For the Dakota Electric board of directors, the question has been what is best for our members while balancing tariffs, reliability and environmental concerns,” said Jerry Pittman, chairman of the board, in a statement. communicated.
The next steps
Now that members of Great River Energy have approved the sale, opponents of the plan are hoping the Minnesota Public Utilities Commission will reject approval of the sale of the power line, which would have the effect of canceling the entire deal. plant sale agreement.
The other remaining step is the approval of the sale of the plant by the Federal Energy Regulatory Commission.
Great River had argued for early approval by the state commission, but opponents managed to get the panel to extend the comment period from July 28 to August 11.
Environmental groups including CURE, Fresh Energy, the Minnesota Center for Environmental Advocacy and the Sierra Club said in a filing to the commission that the sale of the power line is vitally important because it is one of the only means of supplying renewable energy from North Dakota to Minnesota.
The groups fear that the line will be sold for less than its market value and that Rainbow Energy will then control a valuable asset that now belongs to Great River and, by extension, its customers.
The line’s selling price is $ 225 million, while the plant is selling for $ 1, according to Michael Noble, executive director of Fresh Energy, who said he got the figures from Great River, as a Inside Climate News first reported last month. Great River said it would not confirm the numbers, citing a confidentiality agreement.
But the idea that the commission would take action to slow or prevent the sale, or take action to investigate the process, would push the boundaries of a law and state rules that give the commission little authority over services. cooperative audiences.
Because of this, advocates like Ninneman say they realize there’s a good chance they can stop the sale of the plant and the line. Ninneman said the most important point is to do whatever can be done to reduce the use of coal-fired energy and to make cooperative public services more transparent and accountable.