CUB files comments on Minnesota Power’s risky power plant investment

Published May 24, 2022

Minnesota Power, the electric utility serving much of northeastern Minnesota, filed its latest Integrated Resource Plan (“IRP”) in February 2021. An IRP is a roadmap that public utilities use to analyze and model various strategies for meeting electricity demand over the next 15-year time horizon. Ideally, the IRP planning process allows utilities to publicly identify, with input and comments from interested stakeholders, the strategy that allows the utility to meet those demands in the most efficient and cost-effective way possible. Nearly six years have passed since the Public Utilities Commission (“PUC”) approved Minnesota Power’s previous IRP. A lot has changed in that time, making this latest IRP filing particularly important. This blog post summarizes comments CUB has filed to date on Minnesota Power’s 2021 IRP.

As we noted in a previous blog, Minnesota Power is unique among public utilities in that its customer base includes a relatively high concentration of large, industrial customers — such as paper mills and taconite mines — and a comparatively low proportion of residential and commercial customers. Minnesota Power has also announced a commitment to delivering 100 percent carbon-free energy by 2050. In combination, this creates interesting challenges and opportunities for the utility and stakeholders participating in this docket. Those challenges include: (1) navigating how and when best to retire the Boswell Energy Center – Minnesota Power’s only remaining coal plant; (2) how to account for and address market fluctuations affecting the energy demands of Minnesota Power’s large industrial customers; and (3) reassessing the need for the Nemadji Trail Energy Center (“NTEC”), a yet-to-be-built natural gas plant in northern Wisconsin that Minnesota Power would partially own.

CUB engaged expert consultants from Strategen to help us review the modeling and analyses Minnesota Power performed to support their 2021 IRP. In the initial comments we filed on the docket, we identified certain flaws in Minnesota Power’s modeling. In our view, the company’s modeling was too limited and did not fully examine all resource options that could help the company meet its 100 percent carbon-free goal while providing reliable and affordable electricity to customers. Specifically, we argued that the company’s modeling inappropriately assumed that natural gas resources will be the best replacement for retiring coal facilities, and that the company did not adequately consider whether additional investments in renewable resources, storage, and other advanced technology would be more cost-effective. Additionally, flaws in Minnesota Power’s modeling led to unrealistic projections about how much it would run the Boswell Energy Center.

Relatedly, we also argued that Minnesota Power did not adequately consider the risk to consumers of making a long-term investment in the new NTEC natural gas facility. We believe it is inconsistent of Minnesota Power to, on one hand, commit to 100 percent carbon-free energy by 2050 and, on the other hand, begin construction on a brand new natural gas facility that would not be operational until 2025. Plus, the costs of natural gas have increased considerably since Minnesota Power filed its 2021 IRP, and those increased costs are not accounted for in the company’s modeling. 

Ultimately, we noted in our initial comments that we plan to examine alternative modeling presented by other parties participating in this docket. We plan to make recommendations based on that review in our reply comments, which are due on June 29, 2022. We will share another blog post then describing our recommendations.

You, too, can comment on Minnesota Power’s IRP!

The IRP and its various attachments are available on Minnesota Power’s website. You can also find it, along with filings made by other parties in the IRP docket, on the Public Utilities Commission website by searching for Docket Number 21-33 here.

If you wish to file your own comments about Minnesota Power’s future electricity generation mix, you can do so in the following ways:

  1. Email your comments to consumer.puc@state.mn.us. Please make sure you include the docket number and the name of the utility whose IRP you wish to comment on.
  1. Use SpeakUp! on the Commission’s website – click on “Open Discussions” to search for the correct docket.
  1. Using the Commission’s eFiling system – www.mn.gov/puc, select eFiling, and follow the prompts to create an account to file comments.
  1. Mail your comments to Minnesota Public Utilities Commission, 121 7th Place East, Suite 350, Saint Paul, MN 55101.

Please note that your comment, including your name and any other personal information you include, will be part of the public record.

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Author: Brian Edstrom

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