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Minnesota Power: Go slow on old coal

Minnesota Power on Monday said it shouldn't be rushed into closing its older, smaller coal-fired power plants until more research is done on the environmental benefits and economic impacts to customers.

Taconite Harbor
Minnesota Power wants more time to further study the viability of older coal-fired power plants, such as the Taconite Harbor Energy Center in Schroeder, Minn. (Photo courtesy of Minnesota Power)

Minnesota Power on Monday said it shouldn't be rushed into closing its older, smaller coal-fired power plants until more research is done on the environmental benefits and economic impacts to customers.

The Duluth-based utility filed its comments with the Minnesota Public Utilities Commission on its so-called Baseload Diversification Study conducted over the past year, firing back against environmental groups and even the state Department of Commerce that have called for fast action to close the plants.

In its comments, Minnesota Power asks for more time to conduct a more comprehensive study that will better weigh the costs of closing the plants versus keeping them open by switching to natural gas or adding expensive new pollution-control equipment for coal.

The plants in question are the Laskin Energy Center in Hoyt Lakes and the Taconite Harbor Energy Center on the North Shore.

"We want to come in with a special filing in April (2013) that will have more information and will include a recommendation to the commission on whether we should re-fuel the plants, re-mission them or whether we should close them," Margaret Hodnik, vice president of regulatory and legislative affairs, told the News Tribune. "We think it's way too soon to simply say that closing these plants is the best option. The study we conducted just doesn't have all the information we need to make the best decision for our customers."

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This is the first such Baseload Diversification Study ever compiled in Minnesota and it's never been clear if or when the PUC might take action. In recent weeks, both Ottertail Power and Xcel Energy also have been ordered to undergo similar reviews of their power plants.

The PUC last year ordered Minnesota Power to study the idea of closing plants and replacing them with other energy sources, such as natural gas, in the state's first baseload diversification study. The utility did that work and came up with a broad range of possibilities depending on what additional federal regulations are expected in the near future.

Environmental groups have been using the process to pressure Minnesota Power to shutter its oldest coal plants and move to other fuel sources such as natural gas, or renewable energy such as solar and wind. That will help move the company toward reducing emissions, especially mercury and climate-changing carbon dioxide.

In May, the Minnesota Department of Commerce reached the same conclusion as environmental groups, though for different reasons. The state agency's Division of Energy Resources said its review of the issue concluded that the PUC should demand Minnesota Power shut down its Laskin 1 and 2 plants in Hoyt Lakes and Taconite Harbor 3 plant on the North Shore "no later than 2016. Further, the commission should require MP to shut down its Boswell 1 and 2 coal-fired generating plants by 2020 unless circumstances change in the near future."

The Commerce Department looked more at the old plants' effect on consumers and industries that pay monthly electric bills. The conclusion, even by Minnesota Power's internal study, is that the cost of upgrading the old plants to expected pollution-control regulations in the future might be too high, and that the environment and ratepayers would be better off if Minnesota Power switched to other sources of electricity, namely natural gas.

But ordering the plants to be shut down at this point "without a thorough and systematic analysis could put customers at unnecessary risk of higher rates and potential service reliability impacts and have a negative socio-economic effect on host communities," Minnesota Power's comments noted.

Utility officials say it's clear that public sentiment, as well as state and federal regulations, are moving utilities away from burning coal. But they note Minnesota Power has been already moving down that road, moving from 95 percent coal in 2005 to 74 percent by next year. Company officials say they have invested about $500 million in wind energy, biomass and hydropower improvements.

Minnesota Power officials noted the utility already has been moving to install pollution control on its coal-burning units to meet state and federal regulations. That includes more than $355 million in the last six years to reduce emissions, such as sulfur dioxide, nitrogen oxides and mercury by more than 70 percent systemwide.

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Taconite Harbor
Taconite Harbor (Undated file photo courtesy of Minnesota Power)

Related Topics: MINNESOTA POWER
John Myers reports on the outdoors, natural resources and the environment for the Duluth News Tribune. You can reach him at jmyers@duluthnews.com.
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