Regulators OK Minnesota Power plan to retire coal by 2035, add renewables over next 15 years
The Duluth-based utility would add up to 700 megawatts of renewable energy and set a plan for the future of Boswell Energy Center.
DULUTH — State regulators approved Minnesota Power's plan to end its use of coal and add more renewable energy sources.
Under the plan, unanimously approved by the five-member Minnesota Public Utilities Commission on Thursday, the Duluth-based utility would add up to 700 megawatts of renewable energy — 400 megawatts of wind and 300 megawatts of solar — over the next 15 years.
The company will also retire its last two operating coal-fired power plants. Unit 3 at the Boswell Energy Center in Cohasset will retire in 2030 and Unit 4 will retire in 2035. The company is required to consider replacing the units with other energy sources or storage technologies and help with the area transition from such a significant employer and tax base.
Boswell Unit 3 provides 335 megawatts and Unit 4 provides 468 megawatts of energy. Both burn coal.
The most significant measures of the plan were agreed to by the company and intervening clean energy organizations, labor unions and the city of Cohasset and Itasca County earlier this week.
Minnesota Power has a goal of going coal-free by 2035 and carbon-free by 2050.
Commissioner John Tuma compared the plan to the University of Minnesota Duluth hockey team making it to the Frozen Four.
"So you guys take this seriously," Tuma said to the company.
He said the integrated resource plan — a filing that outlines the next 15 years of the company’s expected energy demands and sources — approved Thursday will help set the company up for its next integrated resource plan, which will be even greener.
Minnesota Power will submit its next plan by March 1, 2025. It will examine whether Boswell Unit 4 can be retired in 2030, five years earlier than the timeline in the plan approved Thursday.
"The idea that we are going to be moving to a coal-free and more carbon-free iteration, I think, fits within the direction that this commission has taken for a long time," Tuma said. "Doing it in a smart, cost-effective and reliable way is the hallmark that has been set up here by all the stakeholders that have been involved."
In her opening remarks to the PUC, Jennifer Cady, director of regulatory affairs at Minnesota Power, said the plan "leverages the benefits of new federal legislation for increased amounts of renewables and storage projects in our region," referring to the recently passed Inflation Reduction Act and last year's Infrastructure Investment and Jobs Act.
The plan also gives the company time to adopt technology that is still under development and plan for the future of the Boswell site.
"If we chart every component of our future system today, we will be locked into the options available to us now with the rapidly changing industry," Cady said. "A plan that allows time for technology to develop is one that ensures we remain open to the best options available for our system in the best interest of our customers to include refueling or replacement options at Boswell like renewable energy, energy storage, biomass or even hydrogen."
Commissioner Katie Sieben, chair of the PUC, said the Inflation Reduction Act "certainly seemed to have a major role to play in bringing the parties together in this agreement."
In his remarks to the PUC, Andy MacDonell, Cohasset city councilor and mayor-elect, said the city supported the plan because it includes planning for the future of Boswell. But he also acknowledged it was a difficult decision because Cohasset relies heavily on Boswell.
The late mayor Greg Hagy told regulators in 2020 that 170 people work at Boswell and that it represents 70% of the city's tax base. It also makes sizable portions of the Itasca County and Grand Rapids school district tax bases.
"Even if everything does go right, the scale of this transition is such that we may never fully be able to replace the impact of Boswell," MacDonell said. He said the city may only retain about one-third of the tax base.
Minnesota Power's next integrated resource plan will include a study of the possibility of replacing Boswell Unit 3 with a synchronous condenser after its coal use is retired. A synchronous condenser helps maintain consistent power to the grid and is considered vital as renewables are added.
It would use existing infrastructure at the Boswell site and Sieben said it was "a large asset" that "helps the host community."
Additionally, Sieben said the PUC may explore legislative efforts to support the "tax implications" of Boswell's retirement.
"It's difficult for legislators to see just how devastating that can be for communities," Sieben said. "And if we can help amplify that for the Legislature to invest in host communities that are transitioning, I think that would be really helpful."
In a joint release, the intervening clean energy organizations — Minnesota Center for Environmental Advocacy, Clean Grid Alliance, Fresh Energy and Sierra Club — celebrated the plan.
"The development is an important win for ratepayers and the general public as clean energy is affordable, reliable and essential to confronting the climate crisis and protecting public health, and was therefore a key component in the agreement reached between (clean energy organizations) and Minnesota Power in the days prior to the PUC vote," the groups said in the release.
The agreement also pushed additional consideration of the Nemadji Trail Energy Center natural-gas-fired power plant planned for Superior to future regulatory filings. The plant has long been opposed by environmental groups as it would still release methane, a potent greenhouse gas.
This story originally did not list one of the clean energy organizations. It was updated at 5:20 p.m. Nov. 10 with all four groups: Minnesota Center for Environmental Advocacy, Clean Grid Alliance, Fresh Energy and Sierra Club. The News Tribune regrets the error.