Otter Tail case lays naked how Minnesota and North Dakota have a look at renewable vitality otherwise – Uplaza

Otter Tail Energy Co. should exit a big North Dakota coal plant by 2032—no less than so far as its Minnesota prospects are involved, state regulators dominated Might 30 throughout a contentious assembly.

Looming over the Minnesota Public Utilities Fee’s choice had been the starkly totally different vitality insurance policies of Minnesota—which is pushing onerous on clear vitality—and North Dakota, which is concentrated on preserving its coal business and a fleet of coal-fired energy vegetation.

At difficulty: Fergus Falls-based Otter Tail solely owns 35% of the facility plant, known as Coyote Station. So the plant might run at partial capability after 2031.

Otter Tail’s two largest energy mills—Coyote and one other in South Dakota—are co-owned by corporations past the purview of the PUC. About half of the utility’s prospects are also within the Dakotas.

Some PUC commissioners made clear they imagine Otter Tail ought to exit high-cost Coyote Station by 2029. Otter Tail says that is not possible given the pursuits of the plant’s co-owners.

“I just find this to be a massively frustrating conversation,” PUC Commissioner Joe Sullivan mentioned at a gathering. “I sympathize with Otter Tail, you have two different jurisdictions that look at the world differently. But if [Coyote Station] were in Minnesota, we’d say, ‘Otter Tail, it’s time to pull out.'”

The Coyote Station plant, Sullivan added, is “uneconomic.”

Coyote Station, exterior Beulah, N.D., can be a very soiled coal plant, emitting way more sulfur dioxide, nitrogen oxide and mercury than any coal plant in Minnesota. It is depreciable life runs by means of 2040.

The PUC dominated on Otter Tail’s newest long-term useful resource plan, which each and every Minnesota investor-owned utility should file each few years. In 2021, Otter Tail submitted a useful resource plan calling for a sale of its stake in Coyote Station by the top of 2028.

On the time, Otter Tail mentioned the plant had develop into too expensive for patrons and would not be wanted because the utility provides extra renewable vitality. However final yr, Otter Tail reversed course on the 2028 date, saying it wanted to maintain its Coyote Station stake indefinitely because of growing “uncertainties and risks.”

Nevertheless, the corporate proposed to make use of its Minnesota stake within the plant solely when the Midwest’s foremost grid operator declares an emergency. Such emergencies happen throughout storms and warmth waves when energy demand immediately spikes.

The Minnesota Division of Commerce usually agreed with Otter Tail’s Coyote Station plan, whereas the Minnesota Lawyer Common’s Workplace didn’t. Each characterize prospects earlier than the PUC. A number of clear vitality teams additionally opposed retaining Coyote Station open past 2028.

Beforehand, Otter Tail formally amended its proposal, saying it will exit Coyote Station by 2031—establishing an finish date for the primary time after the skepticism from the PUC and clear energy teams.

“We have limited options as to how we can extricate ourselves from the Minnesota portion of the plant,” Cary Stephenson, an Otter Tail lawyer, instructed the PUC. “If we have a date that is too early, then it creates a fire sale situation.”

Some PUC members expressed reservations about Otter Tail’s plans for Coyote Station. “All of the commissioners have really deep concerns about what you brought to us,” mentioned PUC Chair Katie Sieben.

However the PUC permitted a 2031 Coyote Station exit—with a number of circumstances—by a 4 to 1 margin. Sullivan solid the “no” vote.

The PUC additionally permitted Otter Tail’s proposal for a liquified pure gasoline storage facility at its gas-fired Astoria energy station in South Dakota. The plant is aimed toward enhancing reliability when energy demand spikes; Otter Tail declined to reveal its price.

The PUC additionally permitted a further 200 to 300 megawatts of renewable energy for Otter Tail, to be put in earlier than 2030. And the PUC instructed Otter Tail to roll out 20 to 75 megawatts of battery storage by the late 2020s. Clear vitality teams had lobbied for the battery storage, not Otter Tail.

Some commissioners had been irked that Minnesota ratepayers might find yourself paying all the price of the brand new renewables. An Otter Tail consultant instructed the PUC that North Dakota regulators didn’t wish to cowl the prices of any new renewables earlier than 2030.

2024 StarTribune. Distributed by Tribune Content material Company, LLC.