Great River Energy sees no need for new plants

  • Article by: DAVID SHAFFER
  • Star Tribune
  • November 2, 2012 - 8:21 PM

Great River Energy, the giant power wholesaler to Minnesota cooperatives, is projecting tepid growth in electrical demand and sees no need to build new power plants for at least 15 years.

The Maple Grove-based utility, in a planning outlook filed with state regulators late Thursday, also said its $437 million coal-fired generator in Spiritwood, N.D. -- completed last year and immediately mothballed -- won't be fully operational until 2015.

"We are not going to be building anything new unless something unusual or unexpected happens," said Laureen Ross McCalib, the co-op's manager of resource planning.

Great River Energy is the state's second-largest electricity producer behind Xcel Energy. It is owned by and supplies power to 28 retail cooperatives serving 645,000 customers from the Arrowhead to southwest Minnesota, including many Twin Cities suburbs.

Housing collapse cut need

For decades, this vast service region had growth of 5,000 to 10,000 new homes each year, reaching a high of 15,500 in 2004. But the collapse of the housing market pulled the plug on demand for more electricity, according to the utility's resource plan.

Just 2,000 new homes were built in its service region in 2008. The number has risen since then, but only modestly, and Great River Energy expects slow growth to 7,000 homes a year by 2027.

With fewer new customers, the cooperative forecasts only a 1.2 percent annual growth in peak demand over the next 15 years, compared with annual growth rates of 2 to 3 percent in the past, McCalib said.

Existing generating capacity can meet the future need, she said. Nearly three-fourths of the utility's power comes from burning coal. No plant retirements are planned, she added.

The Spiritwood plant, built with the intention of burning North Dakota lignite and sending the power over transmission lines to Minnesota customers, is scheduled to begin operation in 2014, but not reach full output until January 2015, according to Great River Energy.

Last year, the cooperative tested the plant, but didn't put it into operation, fearing it would lose money because of slack demand. With the plant generating no revenue, Great River Energy has been making debt-service payments only on the investment.

More wind or other renewable power will be needed after 2024 to meet the Minnesota state mandate to generate 25 percent of electricity by 2025 from renewable sources, McCalib said. The cooperative currently produces about 12 percent of its power from renewables.

David Shaffer • 612-673-7090

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