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Minnesota Power plans natural gas plant in Superior

Minnesota Power and Dairyland Power Cooperative have proposed a $700 million natural gas power plant, Nemadji Trail Energy Center, which would be located near the Calumet refinery in Superior and provide up to 550 megawatts of power. (Courtesy Minnesota Power)

Minnesota Power is partnering with another utility to build a $700 million natural gas power plant in Superior as part of a suite of renewable energy proposals that include new wind and solar generation.

“It’s really about giving customers affordable, reliable, less carbon-intensive energy,” Julie Pierce, Minnesota Power vice president of strategy and planning, told the News Tribune this week. “What we’re doing with this is bringing in flexible generation … to back us up.”

Dubbed the Nemadji Trail Energy Center, Minnesota Power will split the cost and ownership of the natural gas plant with Dairyland Power Cooperative. The 550-megawatt plant, to be located near the Calumet refinery, will employ up to 25 people long-term and require a peak of 260 construction workers while it is built.

“We scanned the entire Midwest — the Superior site is shovel-ready, with access to gas and transmission lines,” Minnesota Power spokeswoman Amy Rutledge said. “At the highest level, this is the next step for moving from primarily coal to more than 40 percent renewables.”

The city of Superior calls the plant “one of the single largest private investments in the area’s history.”

“I am very excited by the prospect of a facility that contributes to a diversified energy economy, supports growth and development of renewable energy and contributes to a reduction in carbon emissions, while keeping rates affordable,” Mayor Jim Paine said in a statement Wednesday.

If approved by regulators, construction could start in 2020 and the plant could be operating by 2025.

Minnesota Power also is entering into agreements to buy power from a new wind farm in southwestern Minnesota and a solar array in the middle of the state. The 250-megawatt wind farm, called Nobles 2, will be built by Tenaska and likely come online in 2020. A 10-megawatt solar array near Royalton will be built by Cypress Creek Renewables and could come online as soon as 2019.

The Minnesota Public Utilities Commission will have to sign off on the power-purchase agreements between Minnesota Power and the solar and wind developers; Wisconsin regulators will handle the natural gas plant. Filings for all of the projects are expected this summer.

Together, the moves are part of Minnesota Power’s Energy Forward plan to get one-third of its electricity from coal, one-third from natural gas and one-third from renewable sources. About a decade ago, 95 percent of the utility’s power came from coal.

The natural gas plant would act as a “renewable-enabling” power source, since the peaks and valleys in wind and solar energy production, and the lack of long-term power storage options, mean another source of electricity has to fill in the gaps.

“If everyone just built the green stuff, that’s when we could find ourselves with reliability that could be very precarious,” Pierce said, adding that the utility’s biggest customers — taconite plants on the Iron Range — depend on the grid 24/7. “I can’t emphasize enough the importance of our natural resource-based economy and the need for reliability and affordability.”

Power generation from natural gas is easier to control than coal, on top of being less carbon-intensive. Natural gas prices have also been at historically low levels in recent years, though growing demand from new and proposed power plants could change that.

Partnering with Dairyland Power Cooperative, which serves western Wisconsin and is based in LaCrosse, puts better and more-expensive technology within reach, Pierce said. The cooperative and Minnesota Power will each receive about 250 megawatts of power from the Nemadji Trail Energy Center.

As for what the project will do to power bills, Minnesota Power said its $350 million investment shouldn’t affect rates.

“At the time these resources come online, we feel that this will have no noticeable impact on customer bills and will protect against the future variability of potentially higher market prices,” Rutledge said.

A rate increase currently under review by the Minnesota Public Utilities Commission seeks to recoup costs from previous capital investments.

The company will be holding public information meetings on the power plant proposal this summer.

Brooks Johnson

Brooks covers business and the economy for the Duluth News Tribune.

(218) 723-5329
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