Minnesota Power sticks up for old coal-burners

  • Article by: DAVID SHAFFER , Star Tribune
  • Updated: June 18, 2012 - 9:38 PM

The utility that helps power Minnesota's mining industry resists anti-coal pressure.

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Laskin Energy Center in Aurora Produces 110 megawatts Proposal: Close units 1 and 2 by 2016

A northern Minnesota electric company said Monday that it is not ready to retire three old, coal-burning power generators -- as a state agency has recommended -- without a lot more study.

Minnesota Power, a Duluth-based utility that serves 144,000 customers including the state's taconite mines, said it disagrees with the state Commerce Department's recent recommendation to state regulators about shutting down the plants.

"[T]o shut down units without a thorough and systematic analysis could put customers at unnecessary risk of higher rates and potential service reliability impacts and have a negative socio-economic effect on host communities," Minnesota Power said in a statement.

The plants in northern Minnesota are all more than 50 years old.

At least 19 percent, and possibly more, of the nation's old, coal-based generation can't be profitably retrofitted to meet long-delayed regulations to reduce air toxics and other pollutants, according to a recent study by the Electric Power Research Institute, an industry group.

In Minnesota, Xcel Energy plans to stop burning coal at its Black Dog plant in Burnsville, and Otter Tail Power Co. is studying whether to keep operating its older Hoot Lake coal units in Fergus Falls.

The Commerce Department, whose Energy Resources Division intervenes on utility matters, recommended this month that state regulators require Minnesota Power to shut down its Laskin units 1 and 2, in Aurora and Taconite Harbor unit 3 in Schroeder by 2016.

The state agency also said that unless circumstances change, Minnesota Power should shut down its 53-year-old Boswell unit 1 in Cohasset by 2020. It further said the utility should update the economics of removing Boswell unit 1 and 2 in its current resource plan.

Environmental groups support closing the Minnesota Power coal plants, though some large industrial users, including taconite mines, have urged the state Public Utilities Commission to disregard the recommendation. In a filing last week, they also questioned whether regulators have the legal authority to order a utility to shut down a generation source.

The PUC is likely to consider the matter in August or September.

Minnesota Power's comments about its old power plants were submitted as regulators are reviewing the utility's recent Baseload Diversification Study, which considered the future of small, old coal power plants that need environmental upgrades.

The company said that "weighing the decisions of installing further environmental controls against closing down units while factoring in the costs of replacing generation, future fuel prices and increased industrial energy loads takes detailed long-range planning."

Minnesota Power generated 95 percent of its power from coal in 2005, though that will drop to 74 percent coal next year and even more in the future, the company said. It has invested about $500 million in wind energy, biomass and hydropower improvements, the company said.

"We've already decided that wind, water and wood renewables and natural gas will play a greater role in our energy mix and already have reduced some coal resources, but before we decide exactly what further changes may look like, we need more insight than what was provided by this study," Al Rudeck, Minnesota Power's vice president of strategy and planning, said in a statement. "Safety, reliability, affordability and the availability of different types of electric power generation are all important parts of that decision."

David Shaffer • 612-673-7090

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