Future of Minnesota Power gas plant uncertain after ALJ ruling
In a Monday decision, Administrative Law Judge Jeanne Cochran recommended that the Minnesota Public Utilities Commission deny a petition for a gas-fired power plant Minnesota Power wants to build.
The ALJ said the assumptions and conclusions of the utility's power forecast were reasonable, but found it did not give enough consideration to alternatives such as wind and solar power, energy efficiency or even a small gas-fired peaking plant.
- The 525 MW Nemadji Trail combined cycle plant was proposed to be built in Superior Wis., with 48% owned by Minnesota Power and the remaining stakes owned by Dairyland Power Cooperative.
Minnesota Power is moving away from fossil fuel plants, but many stakeholders want a more immediate transition.
"The ALJ's decision says that Minnesota Power did not present the evidence that the plant was needed, not that it was the most cost effective option," Annie Levenson-Falk, executive director of the Citizens Utility Board of Minnesota, told Utility Dive.
Minnesota Power emphasized that it is closing or idling nearly 700 MW of baseload coal-fired capacity by 2019. The utility has closed unit 3 at its Taconite Harbor coal plant and refueled its Laskin Energy Center with natural gas in 2015. In addition, it idled Taconite Harbor units 1 and 2 in 2016 and has announced plans to close units 1 and 2 at its Boswell coal plant by 2019.
By mid-2020, Minnesota Power says it will have built or contracted to purchase more than 850 MW of wind generation and has signed agreements with Manitoba Hydro-Electric's Board to purchase 250 MW of hydroelectric generation starting in 2020. The utility has also begun adding solar power to its portfolio with the 10 MW Camp Ripley solar project, another 10 MW under its EnergyFoward program, as well as a 1 MW community solar pilot program.
The ALJ noted that the majority of public comments opposed Minnesota Power's proposed gas plant. Many of the commenters found the utility could meet demand by increasing energy efficiency and investing in renewable energy alternatives, such as wind and solar. They also objected to the fact that the gas for the plant would be derived from hydraulic fracturing.
Environmental groups were not the only plant opponents. A group known as Large Power Intervenors (LPI) was one of the toughest critics.
LPI, which accounts for about two-third of Minnesota Power's energy deliveries, consists of ArcelorMittal USA, Blandin Paper, Boise Paper, Gerdau Ameristeel US, Hibbing Taconite, Mesabi Nugget Delaware, Sappi Cloquet, USG Interiors, United States Steel, United Taconite and Verso.
LPI questioned the need for and timing of the RFP — the gas plant was slated for operation in 2024 — and suggested that the utility had failed to consider less expensive alternatives such as demand-response measures and customer-owned generation.
The ALJ said Minnesota Power's supply-and-demand models were flawed and agreed with intervenors such as LPI that the utility’s long-term models contained an "upward bias" that favored the building of a new gas plant.
If the big industrial users think there is not going to be a need for as much power as the utility is calling for, "that really says something; it says the plant is not in the public interest," Levenson-Falk said.
The ALJ also disagreed with the findings of Minnesota's Department of Commerce, which represents the public interest before the PUC, and said the proposed plant was the least cost option.
The PUC is scheduled to make a final decision on the proposed plant this fall.
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