Building New Gas Plants will leave Minnesota ratepayers on the hook for hundreds of millions of dollars in stranded costs

By Jessica Tritsch, Senior Campaign Representative, Beyond Coal Campaign

We are in the midst of a climate crisis, yet Minnesota utilities are proposing to build new fossil fuel plants instead of planning for a 100% clean & equitable energy future. Minnesota Power has proposed to build the 525-625 MW Nemadji Trail Energy Center in Superior (shared with Dairyland Power in WI). And Xcel Energy has proposed to build an 800 MW Sherco fracked gas plant and gas pipeline in Becker, MN on the site of the Sherco coal plant, which is planned for retirement.

Not only is fracked gas a risk for our climate and communities located near fracking - it is a risk for Minnesota customers. New information released by the Sierra Club shows that both proposed fracked gas plants in Minnesota will leave customers on the hook for hundreds of millions of dollars in stranded costs! A fossil fuel power plant is considered stranded when the cost to keep it running is more than the cost of building and operating new clean energy resources.

Click here to download the fact sheet. Sierra Club compared the costs of building new fracked gas plants vs the cost of meeting the same needs with a clean energy portfolio using a methodology and algorithm developed by Rocky Mountain Institute.

Here’s what we found:

Proposed gas plantProposed capacity / in-service yearGas plant costClean energy portfolio costTotal savings - clean energy portfolio
(net present value)
Gas plant stranded year*
Nemadji Trail Energy Center 625 MW / 2024 $52/MWh $38/MWh $231 million 2032
Becker/ Sherburne replacement 800 MW / 2027 $55/MWh $46/MWh $360 million 2037

*Stranded year: The year in which the cost of building and operating a new clean energy portfolio (that provides the same services as a gas plant) becomes cheaper than the future operating costs of the gas plant.

  • Clean energy is cheaper: Both the Nemadji Trail Energy Center and Becker/Sherburne replacement proposed combined cycle gas plants are more expensive than clean energy portfolios (CEP) that provide the same energy, peak capacity, and ramping characteristics. That means clean energy is just as reliable as fossil fuels, but with a lower price tag. Building those CEP’s instead of the proposed gas plant would save ratepayers across Minnesota and Wisconsin nearly $600 million. Clean energy is not only cost competitive in the midwest today, but avoids the risks associated with building new gas. While the explosion in fracked gas has created a glut in the market today, analysts predict that market prices will rise.

  • Gas plants will be stranded assets: Even if these gas plants are built, they will be stranded by CEP’s within a decade. That is, building new clean energy will be cheaper than the costs of operating the gas plant in less than 10 years. Any sensible utilities commission would be forced at that time to switch to the clean energy option since it would be cheaper for ratepayers on a going forward basis. Unfortunately, the ratepayers will still be straddled with debt from these gas plants that could have been easily avoided. We find that the Nemadji Trail Energy Center and Becker proposed plants would be stranded within 8-10 years when comparing against CEP’s. This would be well before the intended life of these gas plants.

  • Clean energy is imperative for stopping climate change: In order to meet climate goals, we need to go further than simply replacing one fossil fuel, coal, with another, like gas. Switching to clean energy achieves larger, more impactful emissions reductions. Nemadji Trail Energy Center’s projected greenhouse gas emissions are 1.7 million metric tons per year and Becker Sherburnes are 1.5 million metric tons per year, including estimated upstream emissions due to leakage.

Nemadji Trail Energy Center vs CEP - cost comparison ($/MWh)Becker / Sherburne vs CEP - cost comparison ($/MWh)

We don’t need these fracked gas plants. Join Sierra Club in opposing building new fracked gas infrastructure in Minnesota. Visit to sign a petition for Xcel’s proposed gas plant.