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Power company wants more leeway

Minnesota Power on Monday said it shouldn't be rushed into closing its older, smaller coal-fired power plants - including its Taconite Harbor site - until more research is done on the environmental benefits and economic impacts to customers.

The Duluth-based utility filed its comments with the Minnesota Public Utilities Commission on its Baseload Diversification Study conducted the last year, firing back against environmental groups and even the state Department of Commerce that have called for fast action to close the plants.

In its comments, Minnesota Power asks for more time to conduct a more comprehensive study that will better weigh the costs of closing the plants versus keeping them open by switching to natural gas or adding expensive new pollution control equipment for coal.

The plants in question are the Laskin Energy Center in Hoyt Lakes and the Taconite Harbor Energy Center in Cook County.

"We want to come in with a special filing in April (2013) that will have more information and will include a recommendation to the commission on whether we should re-fuel the plants, re-mission them or whether we should close them,'' said Margaret Hodnik, vice president of regulatory and legislative affairs.

"We think it's way too soon to simply say that closing these plants is the best option," she said. "The study we conducted just doesn't have all the information we need to make the best decision for our customers."

This is the first such Baseload Diversification Study ever compiled in Minnesota and it's never been clear if or when the PUC might take action. In recent weeks both Ottertail Power and Xcel Energy also have been ordered to undergo similar reviews of their power plants.

The PUC last year ordered Minnesota Power to study the idea of closing plants and replacing them with other energy sources, such as natural gas, in the state's first baseload diversification study. The utility did that work and came up with a broad range of possibilities depending on what additional federal regulations are expected in the future.

Environmental groups have been using the process to pressure Minnesota Power to shutter its oldest coal plants and move to other fuel sources such as natural gas, or renewable energy such as solar and wind. That will help move the company toward reducing emissions, especially mercury and climate-changing carbon dioxide.

In May, the Minnesota Department of Commerce reached the same conclusion as environmental groups, though for different reasons. The state agency's Division of Energy Resources said its review of the issue concluded that the PUC should demand Minnesota Power shut down its Laskin 1 and 2 plants in Hoyt Lakes and Taconite Harbor 3 plant "no later than 2016. Further, the commission should require MP to shut down its Boswell 1 and 2 coal-fired generating plants by 2020 unless circumstances change in the near future."

The Commerce Department looked more at the old plants' effect on consumers and industries that pay monthly electric bills. The conclusion, even by Minnesota Power's internal study, is that the cost of upgrading the old plants to expected pollution-control regulations in the future might be too high, and that the environment and ratepayers would be better off if Minnesota Power switched to other sources of electricity, namely natural gas.

But ordering the plants to be shut down at this point "without a thorough and systematic analysis could put customers at unnecessary risk of higher rates and potential service reliability impacts and have a negative socio-economic effect on host communities,'' Minnesota Power's comments noted.

Utility officials say it's clear that public sentiment, as well as state and federal regulations, are moving utilities away from burning coal. But they note Minnesota Power has been already moving down that road, moving from 95 percent coal in 2005 to 74 percent by next year. Company officials say they have invested about $500 million in wind energy, biomass and hydropower improvements.

Minnesota Power officials noted the utility already has been moving to install pollution control on its coal-burning units to meet state and federal regulations. That includes more than $355 million in the last six years to reduce emissions, such as sulfur dioxide, nitrogen oxides and mercury by more than 70 percent systemwide.

In May, plans by Minnesota Power to expand a coal ash landfill near the Taconite Harbor power plant were panned by environmental groups.

The groups, including the North Star Chapter of the Sierra Club and the Minnesota Center for Environmental Advocacy, said not only can coal ash be toxic on its own, but the particular dump shouldn't be expanded because the power plant may be shut down in the near future.

Minnesota Power applied for a U.S. Army Corps of Engineers Permit to fill 6.7 acres of woodland wetlands along the Two Island River to hold future coal ash created when coal is burned to make electricity at the Taconite Harbor Energy Center.

In January, the Taconite Harbor plant was listed among coal-fired power plants and taconite processing centers as the largest sources of greenhouse gas emissions in northeastern Minnesota. It was on a list of the nation's largest sources of carbon dioxide, methane and other gases.

Minnesota Power's Clay Boswell plant in Cohasset and Taconite Harbor plant were among the state's 10 largest emitters - with U.S. Steel's Minntac plant in Mountain Iron and Cliffs Natural Resources' Northshore Mining in Silver Bay.

It's greenhouse gases like carbon dioxide from burning fossil fuels that most scientists who study the issue say are contributing to climate change, with high levels of human-caused gas trapping heat near the surface of the Earth and spurring a warming climate.

Last summer, the MPCA investigated complaints from Schroeder residents of a chalky ash raining down on property near the Taconite Harbor center.

A stubborn white ash covered homes, lawns and vehicles and would not wash away.

Minnesota Power said the plant experienced a tube leak in its furnace that released a large amount of steam, which it believed released an excessive amount of coal ash.

The leak was fixed and the mishap was not a reportable violation because the amount of coal ash released did not exceed any permit limits. The company said the ash was not harmful to humans.