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Sierra Club wants review of North Dakota power plant sale

July 1, 2021 GMT

BISMARCK, N.D. (AP) — An environmental group wary about the sale of North Dakota’s largest coal-fired power plant by a nonprofit Minnesota electric cooperative wants officials in that state to review the deal, saying ratepayers are being left in the dark.

Bismarck-based Rainbow Energy Center LLC said it reached an agreement Wednesday to acquire the Coal Creek Station in west-central North Dakota from Maple Grove, Minnesota-based Great River Energy. The acquisition also includes the purchase of associated transmission lines that run from central North Dakota to Minnesota by an affiliate of Rainbow Energy.

Terms of the deal were not disclosed.

“This smells like a backroom deal that benefits the North Dakota coal lobby, not regular Minnesotans,” Margaret Levin, director of the Minnesota chapter of the Sierra Club, said in a statement. “It also sounds like Minnesota customers may remain on the hook for paying for power from this economic loser of a plant for years to come.”

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Rainbow Energy said the deal still requires state approval of permit transfers and the greenlight by the Federal Energy Regulatory Commission, which regulates utilities, power generators and pipelines.

The Sierra Club, a San Francisco-based group that wants to curb the use of fossil fuels, wants to extend the review to the Minnesota Public Utilities Commission and the state attorney general.

Minnesota officials did not immediately respond to questions from The Associated Press on Thursday.

Great River Energy announced last year that it would close the power plant near Underwood and replace most of its energy with new wind farms in Minnesota. The company said at the time the facility would be shuttered in the second half of 2022. The plant that has operated for more than 40 years employs 260 workers.

Great River said the plant lost $170 million in energy sales in 2019. The company had offered to sell the sprawling plant near Underwood for just one dollar.

Great River supplies electricity to 28 rural Minnesota cooperatives, serving about 1.7 million people. The 1,150-megawatt plant will be replaced by a similar amount of wind energy by the end of 2023, after a $1.2 billion investment, the company said.

Great River spokeswoman Therese LaCanne told the AP Thursday that the deal still requires approval from the cooperatives.

LaCanne said she expects the cooperatives will vote on the sale “very soon.”

“Co-op member owners are supposed to be active participants in the decision-making of their cooperative utility,” said Levin, of the Sierra Club.

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Rainbow Energy buys surplus power from utilities and resells the electricity to other companies. As an energy marketer, it did not own electric wires, power stations or other utility infrastructure.

In announcing the deal, Great River said it intended to buy power from the plant “as a reliable steppingstone in our power supply transition.”

The deal also includes a transmission line that runs from the plant more than 400 miles east to Minnesota. Great River has said a $130 million upgrade finished in 2019 to the line was one of the company’s most significant capital investments in years.

Stacy Tschider, Rainbow Energy’s president, said the facility already has underground carbon storage space on 45,000 acres (18,210 hectares) the site and the company would incorporate carbon capture technology within five years at the plant, a move he called vital to the future of the facility.

Wayde Schafer, the organizer for the North Dakota chapter of the Sierra Club, said he’s skeptical the company can cost-effectively capture and store carbon emissions from the plant.

“Unless taxpayers and ratepayers kick in a boatload of money, this really can’t fly,” Schafer said.

North Dakota has seven coal-fueled electric power plants. The state’s lignite mines in west-central North Dakota produce close to 30 million tons of fuel annually. North Dakota’s vast lignite reserves are second only to Australia’s.

Plans to reduce or eliminate coal from energy portfolios, along with mounting regulations to curb the climate change effects of burning the fuel, increased renewable power and cheap natural gas has hurt the state’s lignite industry in recent years.

The Legislature this year passed a sheaf of pro-coal measures that include loans, grants and millions of dollars in tax breaks.

The state’s coal industry is destined to the way of the buggy whip, Schafer said.

“They are trying everything and anything and it shows how desperate they are,” Schafer said. “But it’s futile. They are just delaying the inevitable.”