By Joe Smyth | @joesmyth

Minnesota’s Attorney General thinks utility ratepayers should not be forced to fund the Lignite Energy Council, a coal industry group that has opposed clean energy policies in Minnesota and supported policies that subsidize the coal industry in North Dakota and nationally.

The Minnesota Attorney General (AG)’s office submitted testimony to the Minnesota Public Utilities Commission last month objecting to Otter Tail Power’s efforts to charge its ratepayers for dues it pays to the Lignite Energy Council. The AG’s office explained that the Lignite Energy Council does not benefit electric ratepayers in Minnesota, and is instead focused on promoting North Dakota’s coal industry.

There are two issues with the LEC [Lignite Energy Council] dues. The first is that LEC is an organization that supports North Dakota’s $18 billion lignite industry and does not provide any direct benefits to Minnesota electric ratepayers. The second is that LEC engages heavily in public affairs and legislative activities in North Dakota, Minnesota, and with the US Environmental Protection Agency (“EPA”) to advocate for the lignite industry and coal based electricity. LEC’s activities are in direct opposition to Minnesota’s carbon-reduction goals and renewable energy standards.

By Joe Smyth | [email protected] | @joesmyth

Coal-heavy power supplier won’t let its member cooperatives leave, which one co-op calls a “financial suicide pact”

By Joe Smyth | [email protected] | @joesmyth

The generation and transmission association that provides electricity to large swaths of the rural West and Upper Midwest is facing increasing pressure from its member cooperatives and lenders about its reliance on coal, challenges to its rates in proceedings at the Federal Energy Regulatory Commission, and efforts by some member cooperatives to end their contracts in order to purchase wholesale power from other providers.

Those challenges facing Basin Electric reflect the growing tension between some of the electric cooperatives that provide electricity to much of rural America, and the generation and transmission associations that sell wholesale power to those co-ops largely generated with increasingly uneconomic coal plants. 

As one co-op director put it, “Across America, the generation and transmission model is being challenged by the distribution cooperatives who own them. We want more flexibility and local control to help us manage and even reduce costs.

Tri-State Generation and Transmission Association announced last month that it will close its coal plants in Colorado and New Mexico and build a gigawatt of new wind and solar projects, in a move that its CEO said will “transform Tri-State as a power supplier.”  Tri-State CEO Duane Highley explained that replacing coal with renewable energy will reduce costs as well as carbon emissions, as the power supplier submits its plans to Colorado regulators this year.


Wind and solar prices “way, way below” two cents help accelerate coal retirements
At a press conference in the Denver State Capitol with Colorado Governor Jared Polis, Highley explained how the dramatic declines in renewable energy prices enable Tri-State to reduce costs by replacing coal plants with new wind and solar projects:

“This is what's amazing and why this is an exciting time for our business. We've seen the cost of renewables plummet. From the first renewable project we signed 10 years ago, we're seeing like an 85% reduction in the cost of solar energy. And because the wind and solar energy now comes in prices lower than the cost of generating with any fossil fuel, coal or gas, it provides us with an opportunity, if you want to call it a "green energy dividend," that those savings in energy costs can be used to help us accelerate the retirement of coal and pay for that accelerated retirement, without negative rate impacts.”

Highley’s comments confirmed what a variety of analysts have found over the last two years. A pair of reports by Moody’s Investors Service in 2018 found that “most municipal and G&T cooperative-owned coal power plants have operating costs greater than the all-in cost of renewables,” including Tri-State’s coal plants, and highlighted how “high quality renewable resources” in Tri-State’s and Basin Electric’s service territories “may enable these utilities to reduce rates for their customers where the price of new renewables undercuts that of existing coal.” A report by the Rocky Mountain Institute later that year found that Tri-State’s member co-ops could save hundreds of millions of dollars by replacing coal with renewable energy.

Tri-State did not provide pricing details about its new wind and solar projects, but Highley told Colorado legislators at an energy hearing last July that its previous request for proposals “resulted in costs well below two cents for both wind and solar, I mean well below, I mean way, way, below. Lower costs than what we can get at variable cost from operating any fossil fueled unit. So I'm expecting that to be the case again.”

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Tri-State will build a gigawatt of new wind and solar, reaching 50% renewable by 2024
Tri-State announced 304 megawatts of new wind projects and 715 megawatts of new solar projects in Colorado and New Mexico. Tri-State said that by replacing coal plants with those new renewable projects, along with existing wind, solar, and hydroelectric projects, “by 2024, 50% of the energy our cooperative consumes will come from renewable resources.”

The new wind and solar projects that Tri-State announced will be built in the service territories of seven of Tri-State’s member co-ops, and two of the solar projects will be built at coal facilities that Tri-State will close.