Almost one year following the private equity acquisition of Minnesota Power, the Minnesota Public Utilities Commission (PUC) rejected the utility’s request to build a large, costly new gas plant to meet future energy demand and ordered the company to invest in more renewables than planned, the most affordable path forward while keeping the grid reliable. Sierra Club and our allies are taking a moment to celebrate this win for Northland communities and our climate!
Sierra Club teamed up with our coalition of clean energy organizations, including Minnesota Center for Environmental Advocacy, Clean Grid Alliance, and Fresh Energy, to provide expert testimony and alternative resource modeling in Minnesota Power’s Integrated Resource Plan, a long-term plan that maps out how the company will provide its customers’ power needs. Our expertise and recommendations were taken seriously by the Commission, ultimately shaping the regulators’ final decisions. We appreciate that this plan puts affordability first by ensuring Minnesota Power’s customers are not locked into paying for a costly new gas plant without exploring cleaner, more cost-effective options.
How we got here:
Last year, Minnesota Power had been required to redo its previously filed long-term plan after the Commission approved its private equity acquisition by BlackRock, the world's largest asset manager. Specifically, the utility was supposed to come up with a plan without a large, new fossil gas plant and make good on its clean energy promises given its newfound access to capital. (Flashback to when we argued Minnesota Power’s claims were deceptive and the public didn’t buy it.)
So, what did Minnesota Power do? Proposed yet another plan with a large, new fossil gas plant. The Commission did not like that and came down hard on the utility. At our coalition’s urging, the Commission ordered Minnesota Power to take near-term actions to build additional clean resources beyond what the utility proposed and denied plans for new fossil fuels.
Sierra Club and our partners showed that the utility can meet future power demands with new solar, wind and storage as well as demand response and new customer programs. We argued for additional transparency measures in order to account for possible new large load customers like data centers. And we advocated that Minnesota Power plan for the long overdue retirement of the biomass-burning Hibbard plant in West Duluth. The Commission ordered all of this and more:
No massive new gas plant
- The Commission denied Minnesota Power's proposal to build a large new 750 MW combined cycle gas plant, concluding that it was premature to approve such a resource 9 years in advance of when the utility claims it would be needed.
- The Commission raised questions about how that plant would undermine Minnesota Power's compliance with the carbon-free by 2040 law, noting that committing to a massive gas plant now could preclude using a cleaner technology later.
- Instead, the company was ordered to explore cleaner options in its next Integrated Resource Plan to avoid new gas, including renewables, storage, transmission, and market purchases.
More clean energy investments
- The Commission ordered Minnesota Power to build a lot more renewables and batteries in the next 5 years than they were planning on. Our coalition advocated that the company procure 600 MWs of carbon-free resources by 2030, doubling the wind resources and battery storage in Minnesota Power’s original plan.
- Minnesota Power will also need to add 100 MWs of demand response by 2028 and develop up to 150 MWs of carbon-free energy with new customer programs by 2030.
- As is the order to look into VPPs and other distributed resources.
- The Commission ordered the company to spend down the Clean Tech Fund (a part of the acquisition settlement) by 2030.
- Lastly, Minnesota Power will need to look at virtual power plants (distributed solar) as well as hybrid renewable/battery systems as a distinct generation source in its next plan.
Goodbye dirty energy
- The Commission ordered Minnesota Power to truly center the 100% carbon-free electricity standard moving forward.
- Minnesota Power is allowed to convert one of its coal-burning units at the Boswell plant in Cohasset to gas by 2030, but includes ratepayer protections for any costs associated with the refuel.
- The cease-coal date at the other Boswell coal-burning unit remains at 2035, and the Commission pushed Minnesota Power to assess a retirement plan that includes new transmission lines combined with new solar, wind, and batteries to replace it.
- Minnesota Power must plan to close the biomass Hibbard plant in West Duluth, with a goal to do that by 2032. Once closed, Twin Ports communities will be able to breathe a little easier.
Managing data centers and new load
- The Commission’s order requires Minnesota Power to improve transparency around new large loads like data centers that are coming into its service territory.
- The company cannot propose new generation without a verified demand, which will cut down on speculative planning and over-building unnecessary generation.
Overall, the Commission’s decision preserves many more options for Minnesota Power to comply with the state’s carbon-free energy standard, which requires electric utilities to provide 100% carbon-free electricity by 2040.
Importantly, all of this happened against a backdrop we can’t ignore: growing community opposition to the Google data center proposal in Hermantown backed by Minnesota Power and a northwoods summer full of 90-degree days and wildfire smoke. Climate action is urgent and communities are telling corporations and billionaires to either play by our rules or get out of the way. We have a better future to build.