A Minnesota utility faces criticism from clean energy advocates for continuing to operate one of the largest coal-fired power plants in the Upper Midwest.

Great River Energy’s long-range integrated resource plan, which Minnesota regulators approved on Thursday, contains no timeline for phasing out its Coal Creek Station in Underwood, North Dakota. The power plant has two coal-fired units capable of producing 1,156 megawatts of electricity.

“The plan is pretty much business as usual by relying on a dirty, economically inefficient coal plant instead of investing in low cost wind, solar and efficiency,” said Jessica Tritsch, senior campaign representative for the Sierra Club’s Beyond Coal to Clean Energy campaign.

Clean energy groups argue the Coal Creek’s profitability has plummeted in the last three years as the cost of extracting coal has increased, and that the utility has not been aggressive enough with its energy efficiency programs, which could lessen the need for the large coal plant, they contend.

Great River Energy, which declined to comment prior to Thursday’s hearing at the Minnesota Public Utilities Commission, counters in its filings that that the power plant, which has sophisticated technology to reduce carbon emissions, remains an important source of power as it adds more wind to its portfolio.

“In effect, we are changing the mission of the station from producing at a very high capacity factor to providing reliability to the market and serving as a backup for growing wind energy in the region,” the company said.

The generation and transmission cooperative provides power to 28 electric distribution co-ops with a combined 1.7 million customers in Minnesota and northwestern Wisconsin. Measured by peak demand, the utility is the second largest power supplier in Minnesota and the nation’s fourth largest generation and transmission cooperative.

Great River Energy announced this year that renewable energy would represent 50 percent of its portfolio by 2030. Yet without a shift from coal the utility’s emissions won’t meet Minnesota’s greenhouse gas goals, according to Leigh Currie, senior staff attorney for Minnesota Center For Environmental Advocacy. “Emissions actually increase after 2020,” Currie said.

Though coal remains a major power source, Great River Energy has no plans to build new fossil fuel operations. A fleet of natural gas peaking plants will also continue. An additional 300 megawatts will be added by 2021, with 600 MW planned for 2029 to 2032.

The utility’s two coal operators are Coal Creek Station, which opened in the late 1970s and early 1980s, and the much smaller Spiritwood Station which opened just a few years ago. Another coal-fired plant, Stanton Station in Stanton, North Dakota, closed and was imploded this month.

The company also terminated an agreement to buy coal-based power from Dairyland Cooperative Power.  

Coal Creek is called a “mine mouth” plant because the coal comes directly from a mine next to it. It burns lignite, considered of lower quality than coal stocks from other regions, such as Wyoming. A drying process along with a combined heat and power system reduces carbon emissions and improves efficiency at the plant, according to the company.

The dry fined coal from Coal Creek is also shipped to Spiritwood Station, where it is used in the plant along with natural gas to produce steam and electricity. Spiritwood provides steam to an adjacent biorefinery, as does Coal Creek.

Coal Creek is becoming uneconomical as the cost of mining coal climbs significantly, say clean energy groups. In 2011, extracting coal cost $20.08 a ton compared to $25.61 in 2017. Tax credits for the use of the drying process end in 2020, driving up the cost of the plant.

They also contend profits of Coal Creek have been declining since 2017 as coal costs jumped. “The coal is getting deeper and further away from the plant, so their fuel costs are increasing,” Currie said. “Wind would already be much cheaper than running Coal Creek. Even Great River Energy’s modeling showed retiring it in 2024 would be less expensive than continuing to run it.”

The utility has said the plant will ramp up and down depending on wind energy, a practice which may mean the plant may see decreasing output, and therefore fewer carbon emissions.  

The Energy News Network reported last year that Great River Energy ramps down Coal Creek’s energy production significantly when wind production increases. The plant sometimes operates at a third of its capacity, though in winter it generally increases as natural gas plants shift to heating.

Clean energy groups also criticized Great River Energy’s plan for energy efficiency. The utility wants to continue to achieve 1 percent savings from customers, and 0.5 percent through efficiency upgrades at plants, Currie said.

Allen Gleckner, director of energy markets for Fresh Energy, said the company also did not model well how to achieve state mandates for energy conservation. Despite the renewable pledge coal resources will slow the company’s transition toward a cleaner grid.

“They’re not meaningfully addressing how to get coal off their system,” he said. Without a push toward more wind and solar moves by the utility to further electrify its grid – such as through an electric water heater program – will not reduce carbon emissions because of a reliance on coal.

The Energy News Network is an editorially independent publication of Fresh Energy.

Minnesota regulators do not have jurisdiction over Great River Energy in the same way they do over investor owned utilities. The Public Utilities Commission cannot modify the plan, it can only accept or reject it. Should the commission reject it the move would serve as “a signal” to the utility to perhaps make changes in upcoming integrated resource plans, said Currie.

Its board of directors, however, has the final say in any changes to the integrated resource plan, and not regulators.