Minnesota Power will get more time to decide the future of two of its older coal-fired power plants after action by the Minnesota Public Utilities Commission on Thursday in St. Paul.
The PUC board went on record saying they believe it's in everyone's best interest -- economically and environmentally -- to retire or repower the old plants at Taconite Harbor and Hoyt Lakes by the end of 2016.
But the commission stopped short of ordering that move, instead giving Minnesota Power until March 1 to come up with a plan for the power plants on which the board can take action.
Minnesota Power will include the future of the plants as part of its regular report -- called an integrated resource plan -- to the PUC.
"We're really pleased with today's action," Amy Rutledge, Minnesota Power spokeswoman, said Thursday. "Everyone agrees that some timely decisions are coming on these facilities and what their future is. ... But we really needed more time to look at the impacts on our reliability, our customers' rates ... and the socioeconomic impacts on the communities where these facilities are located."
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Environmental groups have pressed the issue hard in an effort to reduce carbon emissions, blamed for climate change, and mercury pollution that contaminates fish. The groups say the two plants are too old and inefficient to be fitted with additional pollution-control equipment and instead should be shut down permanently or refitted to run on cleaner-
burning natural gas.
"It's disappointing that the commissioners did not follow the recommendation of the Department of Commerce and set a firm date for the plants to be retired or repowered with natural gas," Jessica Tatro, spokeswoman for the Sierra Club's Minnesota chapter, said. But they (the PUC) are clearly on record now of moving in that direction. They have set Minnesota Power down that road, just not as quickly as we would have liked to see."
The March 1 deadline is a month earlier than Minnesota Power had hoped. The PUC also gave Minnesota Power an incentive to act quickly by passing a resolution that forbids the utility from charging customers for any extra costs for leaving the two plants open longer.
Minnesota Power said it simply didn't have enough information on the long-term impacts of closing the plants on its overall electrical supply chain and the rates its customers must pay. An advocate for the utility's largest electrical users, such as taconite plants, also said the plants should be allowed to operate as long as economically viable.
Even the mayor of Hoyt Lakes testified Thursday that the city and utility need time to help find alternatives for the power plant and its 40 jobs, noting it's easier to find new uses, owners or options for a facility that is running than one that's closed.
"I'm asking, pleading with the commission to let Minnesota Power finish its work" on plotting a future for the plants, Mayor Marlene Pospeck testified.
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 what was the state's first "base load diversification study."
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In May, the Minnesota Department of Commerce's Division of Energy Resources sent a letter to officials at the Minnesota Public Utilities Commission saying their review of the issue concluded that the PUC should demand Minnesota Power shut down its Laskin 1 and 2 units in Hoyt Lakes and Taconite Harbor 3 unit 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."
While environmental groups sent letters urging the PUC to close the old coal plants to reduce mercury, haze, carbon dioxide and other emissions, the Commerce Department looked more at the old plant's 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.
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 past six years to reduce emissions -- such as sulfur dioxide, nitrogen oxides and mercury -- by more than 70 percent systemwide. The utility also is adding large amounts of wind-generated electricity.
