Northern Minnesota utility drops plan to use energy from controversial Wisconsin gas plant

A planned $1 billion gas-fired power plant in Wisconsin is in doubt after northern Minnesota’s largest power company said it no longer planned to buy its electricity.

Minnesota Power said the Nemadji Trail Energy Center (NTEC) in Superior, Wis., has been delayed too long by litigation and permitting, which is a problem because the utility needs energy quickly to replace the output from coal plants closing in 2030 and 2035.

Duluth-based Minnesota Power wanted the always-available gas to support the expansion of wind and solar energy plants. NTEC also had the backing of local labor and business development groups because it would create jobs.

The power company’s announcement Friday was a victory for environmental groups who have fought the project for years because it would result in new fossil fuel infrastructure. Residents in both Superior and surrounding communities worried about water pollution and other environmental and public health concerns, along with the plant’s proximity to an Anishinaabe graveyard.

The move also follows a decision in October by Minnesota utility regulators to allow the sale of Minnesota Power’s parent company Allete to an ownership group led by a subsidiary of BlackRock, the world’s largest asset manager. Supporters of that $6.2 billion deal said it would guarantee money for carbon-free technology required under state law.

Opponents of the transaction argued the profit-driven buyers would drive up electric bills for Allete customers and that private equity should not be allowed to take control of an energy company.

The sale also renewed debate over whether Minnesota Power’s reliance on NTEC was consistent with a state climate law targeting a carbon-free grid by 2040.

The PUC asked for an update on Minnesota Power’s plan for the facility.

In its response, made public late Friday, Minnesota Power said it won’t take any energy from NTEC despite working for years on the project. Jennifer Cady, vice president of public policy and external affairs, wrote that Minnesota Power did not have permits for building the gas plant and that some of its Wisconsin permits had expired.

Cady also wrote the project owners “respect Tribal sovereignty” and have been working with the Fond du Lac Band of Lake Superior Chippewa. Former Chair Kevin Dupuis Sr. said at a 2024 meeting that the band’s concerns were ignored through a federal review of the project.

Still, the decision does not necessarily spell the end of the gas plant. Allete is a minority owner after selling some of its stake in 2021. A Wisconsin-based cooperative utility has 50% of the project.

Cady wrote the company and its other partners will “evaluate a path forward that balances economic, community and environmental considerations” while addressing concerns raised by tribes and others.

In its letter to the PUC on Friday, Minnesota Power also said it must still “aggressively pursue” new power sources that are always available, unlike wind and solar, to ensure the grid is reliable as it retires coal. And in a written statement, it said the company’s need for natural gas generation is unchanged.

The company’s energy mix is nearly 60% renewable. Unlike Xcel Energy, it has no nuclear power and no “significant amounts” of natural gas to shore up its supply after exiting coal.

Minnesota Power said it would not try to recover money from its customers to recoup the cost of developing the project.

The plant would be built on land Minnesota Power owns along the Nemadji River, which flows into Lake Superior.

Superior Mayor Jim Paine said Friday the project still needs critical permits and zoning approval from the city, which it will not give. He said he doubts that two distant utilities will continue to pursue construction of a plant on land owned by Minnesota Power.