Minnesota Power to idle four coal-fired electrical generation units

Minnesota Power is idling four of its coal-fired electrical generating units for the next several months because of trouble getting enough coal by railroad.  
“This is the worst I’ve seen it in my 18 years with the utility,” Al Rudeck, Minnesota Power’s vice president of strategy and planning, told the News Tribune on Wednesday, referring to Burlington Northern Santa Fe Railway’s ability to transport coal from mines in Montana and Wyoming to the Northland. “BNSF just hasn’t delivered. We’re very, very frustrated.”
It’s taking BNSF two to three times longer than usual to get shipments of coal to the Northland, Rudeck said. The utility’s coal stockpiles are less than half of where they should be.
The units affected include the two at Laskin Energy Center in Hoyt Lakes, and two of the three units at Taconite Harbor Energy Center on the North Shore. No one will be laid off, Rudeck said; workers affected by the idling will focus on maintenance projects.
Pat Mullen, Minnesota Power’s vice president of marketing and corporate communications, told Wisconsin Public Radio that this is the first time the utility has had to idle plants because of coal shipping problems.
BNSF officials have told Minnesota Power that the delays are because of weather and system congestion, Rudeck said.
Railroads have been struggling in recent months to juggle grain and coal shipments while also handling an increasing amount of oil from the Bakken oil fields of North Dakota. Rail shipping delays have been the subject of a number of federal hearings, including one held by the U.S. Surface Transportation Board in Fargo last week, and one held by the Senate Commerce Committee in Washington on Wednesday.
“Certainly the way that the rail capacity is being used out in the Bakken area has really constrained the system,” Mullen said. “It wasn’t that long ago that if we needed additional coal … it was just a matter of picking up the phone and more cars came. There was just a capacity where you had that flexibility to really manage your business appropriately.”
He and Rudeck said BNSF did work to catch up to its contractual obligations with Minnesota Power last spring, and Rudeck said the utility got back to its normal coal inventory by early summer. But the shipping backlogs have since resurfaced, he said.
“They’re choosing other business over ours,” Rudeck said, noting the decades-old relationship between Minnesota Power and BNSF. “I think they’re trying hard but they need to do better.”
For its part, BNSF has said it is working to expand its shipping capacity.
“BNSF has been working with our freight customers on an individual basis to address their most critical service issues while we continue to execute our short and long-term efforts to improve service across our network,” BNSF spokeswoman Amy McBeth said Wednesday.
Rudeck said the coal-fired units are slated to be idled for about three months. Minnesota Power made the decision to idle the four units now to save its limited stockpiles of coal for the winter months, when the region’s electricity demand - and coal prices - increase.
Fall traditionally is a time of lesser energy demand in the Northland, between the peak summer cooling and winter heating seasons. If there’s a need, Rudeck said, Minnesota Power can purchase electricity from other utilities. And he said the idled units could be brought back online sooner if weather conditions warrant.
Mike Simonson of Wisconsin Public Radio and Andrew Krueger of the News Tribune contributed to this report. Wisconsin Public Radio can be heard in the Twin Ports at 91.3 FM or online at wpr.org/news.