Public Utilities Commission protects customers from Minnesota Power’s aging coal plants

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2014-07-25 10.29.24edit

On June 9, the Minnesota Public Utilities Commission (PUC) voted unanimously to approve Minnesota Power’s 15-year resource plan, requiring additional coal retirements and additional investments in wind, solar, and energy savings. Many Fresh Energy members joined science policy director J. Drake Hamilton in asking the PUC to retire coal at Taconite Harbor 1 and 2 units on the shore of Lake Superior, and Boswell 1 and 2 in Cohasset, and to require more wind, solar, and energy savings from Minnesota Power. Fresh Energy successfully intervened in the case before the PUC, providing substantial evidence for the record, in a coalition with the Minnesota Center for Environmental Advocacy, Sierra Club, and Wind on the Wires (known collectively as the Clean Energy Organizations, or CEOs).

Minnesota regulators approved Minnesota Power’s plan with big modifications including:

  • Retiring Boswell 1 and 2 coal units no later than 2022;
  • Requiring Taconite Harbor 1 and 2 coal units to be economically idled in 2016, and to cease coal operations by the end of 2020;
  • Initiate competitive bidding for 100 to 300 MW of wind energy by the end of 2017;
  • The PUC found that up to 100 MW of additional solar energy by 2022 is likely an economic resource for Minnesota Power;
  • Signifying “that energy efficiency as a resource is real,” the PUC set annual average energy savings goals at 76.5 GWh, almost 34 percent more energy savings than Minnesota Power proposed;
  • The PUC required Minnesota Power to propose a demand-response competitive bidding process within 6 months,  to investigate the potential for an energy efficiency competitive bidding process; and
  • The PUC ordered that Minnesota Power not presume natural gas replacement for coal units, and include a full analysis of replacement options in the next resource plan, due February 1, 2018, including renewable energy, energy efficiency, distributed generation, and demand response.

Minnesota Power’s proposed 15-year business plan did not achieve the level of renewable energy increases or coal reductions that were least cost and in the best interest of Minnesota Power’s customers. Clean Energy Organizations and large energy users agreed that Minnesota Power and the PUC should proceed with caution in requiring new natural gas plants. The PUC decision is based on economic analyses by the Minnesota Department of Commerce that demonstrated that wind, solar, and energy savings are better for customers than continued coal operation.

Fossil fuels are costly to our health, the climate, and our economy. Minnesota Power had filed its plan with no additional wind resources over 15 years, which means their customers would not have received the advantages of the federal tax incentives for wind and solar that were renewed by a bipartisan Congressional vote in December. In its ruling, the PUC instead required the company to initiate a request for proposals of 100 to 300 megawatts of wind energy by 2017.

Minnesota Power had proposed modest but important steps forward with the phase out of the Taconite Harbor coal units by 2020 and the Boswell coal units in the mid-2020s. Both coal plants have long-overdue air quality permits. The PUC found that Minnesota Power has not demonstrated at this time that a $30 million investment in additional pollution controls at Boswell 1 and 2 is reasonable when the state’s analysis showed that it is more cost-effective and cheaper for customers to retire those units.

The Minnesota decision puts Minnesota Power in step with their customers’ support for an energy system that takes advantage of lower cost, pollution-free resources available today.

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