Is it time to pull the plug a pair of aging, coal-fired power plants in northern Minnesota?
The Minnesota Public Utilities Commission today will consider the fate of two power plants in the state’s scenic northeast corner — and whether it has enough information to make a decision.
The 110-megawatt Laskin Energy Center and a 75-megawatt unit at the Taconite Harbor Energy Center have been under scrutiny since energy officials in the Minnesota Department of Commerce questioned their economic viability two years ago.
Clean energy advocates say the facilities are costly and dirty, and that Minnesota Power, which owns the plants, is trying to postpone the inevitable by calling for further study.
“What Minnesota Power has basically been trying to do is simply run the clock down,” said Joshua Low, an organizer representative for the Sierra Club’s North Star Chapter in Minneapolis.
Uncharted territory
Thursday’s hearing (webcast here) is uncharted territory for the commission. Last year, the PUC ordered Minnesota Power to analyze the cost of shutting down its older coal plants versus continuing to operate them.
Investor-owned utilities in the state are required to file long-term resource plans with the PUC every few years. The documents explain how the utility plans to meet customers’ electricity needs in the coming decades.
The PUC only approved Minnesota Power’s last resource plan on the condition that it go back and add the coal comparison, called a “baseload diversification” study, which was completed in February.
The results generally supported the position of environmentalists and state officials: that the rising cost of fuel, maintenance and environmental compliance will soon make the units uneconomical for ratepayers.
Next steps
What happens next is in dispute. The Public Utilities Commission didn’t explicitly say whether it intended to take action based on the report, or whether it would simply be used to inform the utility’s next resource plan, due in 2013.
Minnesota Power calls the baseload diversification study “preliminary” and says it doesn’t address socioeconomic factors, transmission issues and other risks that the commission is legally required to consider in resource decisions.
“We feel a decision like this needs to be fully informed,” said Al Rudeck, vice president of strategy, planning and asset optimization for Minnesota Power.
The baseload diversification study focused on the projected costs of operating the power plants, but it didn’t cover transmission reliability issues or socioeconomic issues, Rudeck said. The Laskin and Taconite Harbor plants employ about 40 people each.
The study also doesn’t reflect the latest information on the pending federal Mercury and Air Toxics Standard, which may be less costly than initially anticipated, Rudeck said.
The Commerce Department and environmental groups argue that the year’s worth of public comment, legal analysis and modeling efforts give the commission enough of a record to make their decision today.
“I don’t think anybody went into this study thinking that it was just something to pass the time,” said Beth Goodpaster, clean energy program director for the Minnesota Center for Environmental Advocacy. “It costs money for us to intervene in these dockets and it takes a lot of time on behalf of the Department of Commerce to investigate these things. It’s offensive in some ways that the company would think that we would spend our time and resources this way for something that doesn’t make any difference.”
Prudent, or procrastinating?
The utilities commission could order Minnesota Power to start planning immediately for the coal unit’s retirements. Or it might decide that it doesn’t have enough information to decide.
Minnesota Power wants more time to continue studying the prospects. It’s asking the commission to let it file a more thorough study in April 2013, a few months before its next resource plan is due.
“We do plan to make decisions on these units between now and early April. We’ve been studying this for a number of years,” Rudeck said. “We think it’s in the best interest of our customers to do it this way and be prudent and thoughtful, because if we move too quickly… we may put all of our customers at risk for higher costs.”
The utility hasn’t said whether it’s likely to close the coal plants, but Goodpaster said it feels like the argument over them has turned into one about timing, and whether the state or the company gets to be the one to make the decision.
If the debate really is about whether the PUC orders the units retired today or whether the company makes that decision in April 2013, does that additional time really matter?
Low, of the Sierra Club, argues yes.
“It’s not a short process to retire a coal plant,” Low said. The utility, the community, and the workers will need time to prepare, he said. Meanwhile, ratepayers are paying more than they should be for electricity to support some of the state’s most polluting power plants.
“At the end of the day, these plants are costly, they’re dirty, and we need to retire them as soon as possible, and that’s why the PUC needs to issue an order to retire these plants on Thursday.”
The PUC is scheduled to take up the issue at its 9:30 am meeting today.
(The MCEA and Sierra Club are members of RE-AMP, which also publishes Midwest Energy News)