Coal’s decline has come to Minnesota

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Over 110 coal plants have announced retirement throughout the U.S. since January 1, 2010, according to the Sierra Club’s Beyond Coal campaign. These planned shutdowns have happened primarily in other parts of the country and in the eastern portion of the Midwest, in places like Illinois and Ohio.

But last week the Rochester Public Utilities’ board of directors announced that it would phase out the oldest operating coal-fired power plant in the Minnesota over the next three years, decommissioning its Silver Lake plant in 2015.

In addition, the Minnesota Public Utilities Commission (MPUC) recently contemplated whether to retire three aging coal-fired units operated by Minnesota Power in the northern part of the state. While the Commission decided to hold off on a final decision until March, it voted in favor of the belief that the three generators are no longer economical to run.

A combination of factors has led to the rising demise of coal-fired power plants across the country: the cost of delivered coal has increased in the U.S. by an average of 11.4% every year from 2004 to 2011; cheap natural gas and wind electricity on the power market has undercut coal’s previous economic edge, particularly when it comes to peak load generation sources; and, new regulations from the federal government mean that older, smaller and dirtier coal-fired units face mandatory upgrades costing millions of dollars, meaning shutdowns become the logical economic choice.

In the not-so-distant past, coal was seen as the cheapest and most reliable energy generation source out there. Renewables like wind and solar, and even fellow fossil fuel natural gas were seen as costly alternatives that would drive up utility costs for ratepayers. But Minnesota’s Department of Commerce predicts that ratepayers in northern Minnesota will pay $65 million more in electricity bills through 2024 if the three Minnesota Power coal units continue to run.

In Rochester, the president of the city’s Public Utilities’ board stated that it will be cheaper for the city to purchase electricity elsewhere on the open market than continue producing its own at the Silver Lake coal plant. With new high voltage transmission lines going up throughout the state as part of the CapX2020 project, purchasing electricity this way will be easier in the coming years.

Coal’s demise has come to Minnesota. That doesn’t mean we should shutdown every coal plant in the state today, because we wouldn’t be able to turn on the lights tomorrow. But thoughtful and careful planning, like the MPUC is doing regarding Minnesota Power’s plants, will allow our state to phase coal out and build a new energy generation structure to replace it.