Dairyland Power Cooperative’s plans for a jointly owned natural gas-fueled power plant in Superior cleared a hurdle this week when Minnesota regulators allowed the utility’s Minnesota partner to proceed with the $700 million project and rejected calls for an environmental review.
The Public Utilities Commission voted 3-2 Monday to approve Minnesota Power’s request to build and operate the Nemadji Trail Energy Center.
Minnesota Power, which would split ownership and output of the 525-megawatt plant with the La Crosse-based Dairyland, argues it’s needed to support intermittent renewable energy sources like wind and solar while replacing nearly 700 megawatts of coal-fired generation capacity.
Clean energy organizations, consumer advocates and large industry groups have pushed back, and consultants for both environmental and industry groups say Minnesota Power exaggerated its needs and that the plant would result in excess capacity.
The costs of the plant would be passed on to about 145,000 customers in northeastern Minnesota as well as rural and municipal utilities in Dairyland’s four-state territory.
“The Nemadji Trail project will raise rates, the stated capacity need is in question and it will emit more carbon,” said Commissioner Katie Sieben, who voted against the project. “It’s a lose-lose for Minnesota ratepayers and the environment.”
Supporting the petition, Chairwoman Nancy Lange said she believes the addition of a natural gas plant will replace older coal-fired plants, ultimately helping the state meet its goal of reducing greenhouse gas emissions by 80 percent by 2050.
“In this day and age of carbon, this is a very challenging decision,” she said. “We have to think about risks to the climate. We have to think about risks to ratepayers.”
The Citizens Utility Board, which represents residential customers, opposed the project and criticized the way it was evaluated.
“Unfortunately, Minnesota Power customers will likely face more than $350 million in new costs for an investment that the utility could not prove it needs,” said executive director Annie Levenson-Falk. “Bypassing the normal review process, especially for a major spending decision like this, is improper and often leads to poor outcomes for consumers.”
An administrative law judge in July recommended against authorizing the project, saying it was not in the public’s best interest and that Minnesota Power failed to show the plant is “needed and reasonable.”
A subsidiary of the investor-owned ALLETE, Minnesota Power is based in Duluth, Minnesota. Dairyland, with $1.6 billion in generation assets, provides electricity for about 258,000 customers of 41 member cooperatives and municipal utilities in Wisconsin, Minnesota, Iowa and Illinois.
Dairyland Power will now need to convince the Wisconsin Public Service Commission that the plant is necessary and is the lowest-cost alternative.
The Minnesota commission earlier voted unanimously Monday morning to deny a petition from Honor the Earth seeking an environmental assessment.
Even though the plant would be in Wisconsin, the environmental group argues Nemadji Trail would affect the people, land, air, water and climate of Minnesota.
“Wisconsin gets to review the impacts in Wisconsin; Minnesota gets to review the impact on Minnesota,” said Paul Blackburn, an attorney representing Honor the Earth. “The commission should not trust that Wisconsin is going to do an environmental review that considers the impacts on Minnesota.”