Great River Energy member co-ops should say no to the Coal Creek giveaway | Opinion

February 8, 2022 9:56 am

Power lines and power towers in northern Virginia. United States Department of Agriculture photo by Ken Hammond

On Wednesday, Minnesota electric cooperative Great River Energy’s (GRE) member co-ops will vote to decide if the utility will sell its North Dakota-based Coal Creek Station coal plant and transmission line.

This proposed sale to the Rainbow Energy Marketing Corporation might seem like a smart move for those concerned about climate change or consumer costs — but in reality, selling these assets will result in higher energy costs for consumers and contribute to the further destruction of Minnesota’s natural resources and environment. In short: Great River Energy members may end up paying tolls on a road they built themselves but sold for a fraction of its worth.

Despite what fossil fuel companies would like the public to believe, the economics of most U.S. coal plants are poor compared to renewable energy sources, and Coal Creek Station is clearly on the margin, with production costs barely cheaper than local wind contracts. GRE’s revelation that the plant lost $170 million for its 700,000 member-consumers in 2019 was unsurprising. So was the co-op’s announcement in May 2020 that it would retire the plant this year, with plans to bring cleaner wind power to members instead.  

Cheaper and cleaner power — who could ask for more? Unfortunately, this story isn’t about Coal Creek. It’s about a noteworthy power line worth $1 billion that could pave the way for new wind farms across the Upper Midwest.

The 436-mile high-voltage direct current (HVDC) line from Coal Creek to the Twin Cities was built in the 1970s — over the strenuous objections of farmers and protesters. Minnesotans paid a high cost for the line, and it can now unlock the clean power system residents want, generating wind power and economic development opportunities in North Dakota while exporting inexpensive power to Minnesota. 

Unfortunately, this win-win outcome has been opposed by some in North Dakota who see it as an existential threat. After Coal Creek’s announced retirement, local counties bullied GRE out of shuttering this uneconomic plant by refusing nearby wind permits and threatening restrictions on access to the HVDC line. Instead of persevering, GRE’s leadership caved and made the unwise decision to sell the plant and the line cheaply. “We’re basically giving it (the plant) away,” David Saggau, CEO of the energy cooperative, said in 2020.

It is clearly against the clean energy aspirations and financial interest of Minnesotans. The transaction boils down to a fire sale: It would cost $1 billion to build the HVDC line today, and GRE recently spent more than $100 million upgrading it. 

Rainbow Energy Marketing has greenwashed the deal by saying it would capture carbon to reduce Coal Creek’s emissions. But bolting carbon capture onto an old coal plant is a boondoggle, and it will fail to capture all emissions while requiring between $100 million to $1 billion in taxpayer subsidies annually. The U.S. General Accounting Office recently singled out such projects as “generally less successful” — an understatement if there ever was one. The only large U.S. coal carbon capture project ever built, Texas’ Petra Nova facility, closed after only three years, wasting hundreds of millions of dollars and reportedly suffering from frequent outages and missing its carbon sequestration goal by 17%.  

On Wednesday, GRE’s members should take the wiser course by shutting down Coal Creek and holding on to their heritage: the hard-won power line. 

Most likely, Coal Creek will go bust, either because it loses money as a stand-alone coal plant, or because the carbon capture experiment fails. Rainbow has no experience operating plants, especially one that is already losing money, and carbon capture is high risk. After failure, the valuable HVDC line will remain with a separate subsidiary or be sold off to pay Rainbow’s debts. GRE members might still be able to buy clean power from the Dakotas, but they will be paying tolls to the owner of a line they built themselves at considerable cost.  

By shutting down Coal Creek and keeping the power line, Minnesotans can choose to build a virtuous cycle of clean development with their neighbor, building prosperity at both ends of the line while descendants of the farmers who fought the power line can benefit from cleaner, cheaper energy. They should not pass up that opportunity. 

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Eric Gimon

Eric Gimon consults as a technical expert, research scholar, and policy adviser with Energy Innovation LLC, where he works with the Power Sector Transformation team to develop innovative thinking on policy solutions for clean, reliable, and affordable electric power in the U.S.