×

Great River Energy to retire Coal Creek in 2022

Great River Energy announces phase out of coal resources

Submitted Photo Coal Creek Generating Station, shown with its Fly Ash Dome, will be shutting down for dismantling in the latter half of 2022.

WASHBURN – Great River Energy will close its Coal Creek coal-fired generation station near Washburn in the second half of 2022, the cooperative announced Thursday.

“We’re responding to the economics in the marketplace and making the best decision for our member cooperatives. We’re mindful of the impacts on the employees and the surrounding communities, and we’re doing what’s feasible to mitigate those impacts,” said Jon Brekke, GRE vice president and chief power supply officer.

GRE will continue to voluntarily pay $3 million a year for five years to McLean County communities and schools after the plant closes to aid in the transition.

“That’s not long enough,” said Underwood City Commission President Leon Weisenburger, who indicated the community will be devastated by the loss of jobs and coal taxes. “Underwood will not survive this.”

Coal Creek employs 260 workers, but its closure also will impact the future of the nearby Falkirk Mine, owned by North American Coal, which supplies the plant with coal and employs about 500 workers.

Weisenburger estimated 60% of Underwood’s workforce is employed at the plant or mine.

Based on information from four years ago that GRE and the mine would be expanding, Underwood invested in housing developments and infrastructure, leaving it with $4.9 million still remaining in debt, he said. The Underwood school built a $1.5 million expansion in 2016.

Weisenburger said the anticipated drop in property values and the upended housing market will impact city and school finances.

McLean County financed its jail and courthouse construction on coal severance taxes of about $40,000 a month. In addition to that amount, McLean received $255,148 in severance taxes over the previous 12 months and $225,892 in coal conversion taxes for county purposes, according to the auditor’s office. Entities with property tax, such as the schools, townships and fire districts, received $805,372 during the year from plant and mine properties.

Washburn City Commission President Larry Thomas said a number of local businesses that service the plant and mine also will be hurt by the closure.

“It’s tough news,” he said. “It’s going to be a blow, for sure. The housing market is really not the best right now in Washburn. There are a lot of homes for sale. I think it’s probably going to make it worse.”

Sen. John Hoeven, R-ND, issued the following statement with regard to GRE’s announcement: “We are disappointed that Great River Energy has decided not to continue its operation of the Coal Creek Station. The Coal Creek Station has provided affordable and reliable power to the grid for decades. We have been and will continue to work on all options to keep it in operation beyond 2022. That includes continuing to work with North American Coal and others to find another owner. At the same time, we will continue working to ensure that coal is fairly valued as a baseload source of power and to get Treasury to finalize and implement the 45Q tax credit, which is an important tool and will help to make carbon capture technologies commercially viable and help to repower the Spiritwood Station.”

GRE said there has been no interest from other operators in the Coal Creek site.

“To date, we have had no takers. One of the problems we see with anybody else thinking of buying the plant is they would see the exact same economics that we currently see,” said GRE President and CEO David Saggau. “The production costs of that particular plant are much higher than what the market values it at. The losses that we are avoiding by closure of the plant are losses that a purchaser would have to incur to take over ownership. So while we are not closing the door on the potential sale or gifting of the plant to a third party, we’re not holding out a lot of hope.”

GRE announced it plans to transform its portfolio of power supply resources in the coming years, significantly reducing member-owner wholesale power costs. The electric cooperative plans to phase out remaining coal resources, add significant renewable energy and explore critical grid-scale battery technology.

Its actions include: retire the 1,151-megawatt Coal Creek Station in the second half of 2022; add 1,100 MW of wind energy purchases at a cost of about $1.2 billion by the end of 2023; modify the 99-MW, coal and natural gas-based Spiritwood Station power plant near Jamestown to be fueled by natural gas; install a 1-MW, long-duration battery demonstration system; and support the repowering of Blue Flint with natural gas.

GRE plans to negotiate an agreement to terminate its contract with Blue Flint, an ethanol biorefinery fueled by process steam from Coal Creek Station. Blue Flint’s owner, Midwest AgEnergy, is considering using the contract termination payment from GRE to reinvest in an economical alternate source for its process heat, thereby benefiting area farmers by continuing to support the local market for corn.

Once Coal Creek is closed, it will be dismantled and the site rehabilitated. The time frame for that work is estimated at three years, and some Coal Creek employees are likely to remain beyond 2022 to be part of the plant’s decommissioning.

“In our portfolio evaluation, we’re moving in an opportunistic direction towards an evolved power supply portfolio for the economic benefit of our member cooperatives. This is a reflection of significant shifts in the wholesale market that are brought about by two primary drivers. One is sustained low natural gas prices in the Upper Midwest and throughout the country but especially in the region in which we serve,” Brekke said. “The second factor is a tremendous growth and availability of wind power resources that are cost competitive and also keep a lid on wholesale market prices.”

With GRE’s announced portfolio changes, the cooperative’s power supply resources will be more than 95% carbon dioxide-free. GRE plans to add energy and capacity as needed through upgrades at its fleet of natural gas peaking plants and purchases from the MISO energy market.

Sen. Kevin Cramer, R-ND., responded to GRE’s announcement to call on North Dakota’s leaders to work with interested stakeholders to demonstrate Coal Creek’s value.

“North Dakota leans on reliable energy sources like coal, which renewable sources like wind simply cannot compete with, to keep the power on. While GRE may be abandoning Coal Creek Station, we must look at all available options moving forward,” he said.

Jason Bohrer, president and CEO of the Lignite Energy Council, said the council is working with state and federal leaders to find another owner. Keeping the plant operating will be essential to Falkirk Mine because it hasn’t been financially feasible to ship lignite to an end user, he said.

Bohrer said the hope is that there remains a future for coal.

“However, it’s what we have been worrying about for years, which is when our government continues to create an unlevel playing field, this is the type of thing that happens. You look at a number of different ways the government has skewed power markets. It makes it harder to invest in long-term baseloads,” Bohrer said. “What they are doing has real-world consequences and it is not a good outcome for the country.”

Thomas said Washburn will face significant challenges in replacing the level of economic impact provided by the plant since it opened in 1979. But he added the community has assets with its location along a major highway and area recreational opportunities.

“Washburn was here before the power plant,” he said, “and it will be here after.”

Newsletter

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *
   

Starting at $4.62/week.

Subscribe Today