Great River Energy's Coal Creek power plant in North Dakota would continue operating if talks with a potential buyer succeed.

Great River said Thursday it's in "exclusive negotiations" to sell the giant coal-fired plant and an accompanying transmission line, but it declined to disclose the buyer.

Maple Grove-based Great River, which provides power to around 700,000 Minnesotans, announced in May it would close Coal Creek early in 2022, saying the plant was losing money.

Clean energy and environmental advocates in Minnesota applauded the closure announcement, but in North Dakota it was seen as a big economic blow.

"This is a great sign," North Dakota Lt. Gov. Brent Sanford said of Great River's latest revelation. "To put it in a football analogy, Great River is at the 5-yard line."

Coal Creek employs around 240; the independently owned coal mine next door, over 400.

The state of North Dakota has been working to find a buyer for the plant near Underwood, which Great River's CEO David Saggau said last May he had tried to give away for $1 — but found no takers.

"Even though Great River kept the door open with the offer to sell the plant for $1, nobody believed it would ever happen," said Michael Noble, head of St. Paul-based renewable power research and advocacy group Fresh Energy.

Great River is a wholesale cooperative that supplies 28 retail power co-ops. Coal Creek station, connected to the Twin Cities by a 436-mile transmission line, has long been Great River's largest generation source.

If the Coal Creek deal happens, Great River said in a statement that it would continue to maintain and operate the power line under contract.

Great River also said the potential buyer is pursuing a "major carbon capture and sequestration project" at Coal Creek.

In an era of climate change, carbon dioxide emissions are the bane of coal-fired power.

Carbon dioxide can be captured through an industrial process and stored in underground rock formations. Still, carbon capture is a relatively nascent technology that's economically challenging; it's seen its share of failures.

"Carbon capture just makes [power production] more expensive, yet Great River was going to shut down the plant because it is too expensive to run," said Jessica Tritsch, senior campaign representative for the Sierra Club, an environmental group.

Plus, carbon capture projects may not actually be 100% effective, while coal mining itself leads to carbon emissions, she said.

But new federal tax credits for carbon capture could greatly boost the financial prospects for any new project. And earlier this week, North Dakota Gov. Doug Burgum signed a bill providing a sales-tax exemption for stored carbon dioxide.

"There are a lot of bills going through this session not only for this plant but also to help other plans for carbon capture," Sanford said.

The most prominent of those is Project Tundra, a $1.3 billion effort led by Grand Forks-based Minnkota Power, a cooperative that covers a chunk of northwestern Minnesota.

Great River's announcement last year to shutter Coal Creek was a stunner.

The 2022 closing date was one of the earliest large coal plant shutdowns in the region. Also, Great River was perhaps the first big regional power producer to abandon coal completely for natural gas and renewable power at such an early date.

While Coal Creek had been Great River's anchor, the company said it has been consistently losing money — $170 million in 2019 alone — due to dramatic changes in wholesale electricity markets in recent years.

Any buyer would likely operate Coal Creek as a "merchant" power plant, selling into wholesale markets — but with no base of retail customers like Great River.

"They would be much more market-dependent," John Weeda, head of the North Dakota Transmission Authority, said of any buyer.

Coal Creek is the largest of five big power plants in North Dakota located adjacent to a coal mine.

Historically, the mine-next-door model gave the plants a cost advantage. But that has been diminished as coal power has been losing out in wholesale power markets to cheaper gas-fired electricity and renewables.

The planned closure of Coal Creek sent fear through the industry, as well as state and local government given the tax revenue at stake.

If the Coal Creek deal goes through, "the fear will be reduced," Weeda said. "Other facilities could use it as an example if they need to change."

Mike Hughlett • 612-673-7003