Minnesota utilities on track to exceed goals of Obama's climate plan
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A national response to climate change, outlined on Tuesday by President Barack Obama, called for doubling the country's renewable electricity by 2020, more land for wind and solar projects, and new federal rules on carbon emissions from power plants.
The president laid out a national goal to reduce the greenhouse gas emissions that contribute to climate change by 17 percent by 2020, but Minnesota already has a more ambitious goal of 30 percent by 2025. Minnesota utilities have already taken some steps that will go beyond the administration's rules.
Utility companies have already been meeting Minnesota mandates for renewable electricity and yearly energy savings. The most recent legislative session even set a new requirement specifically for more solar energy.
Those actions position the state well to lead in a national effort. That's one reason why the state's big utilities -- especially Xcel Energy -- want the new Environmental Protection Agency rules on carbon emissions from power plants to give credit for early action.
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It's a matter of fairness, says Frank Prager, Xcel's vice president of environment and public policy.
"If we've already done the most cost-effective renewable energy projects, or if we've already retired the least-efficient coal plants, or if we've already captured the value of the best conservation programs," Prager said, "then if the EPA comes along and demands additional reductions from us, even though we did those things in Minnesota, then we're going to be in a position where we're going to have to charge our customers more because they did the right thing years ago."
In the last few years Xcel retired two coal plants. It plans to close one more.
Now Xcel wants to make sure the regulations are as flexible as possible, and include credit for reductions made before the national rules go into effect.
The company is about to release a study of its largest coal plant, Sherco, evaluating whether to retrofit the plant to control pollution or replace the generators with efficiency programs and cleaner fuels such natural gas or a renewable energy.
Minnesota's second-biggest generator of electricity, Great River Energy, based in Maple Grove, resists the idea that the Clean Air Act is the way to cut carbon pollution. Great River Energy produces power for 28 distribution cooperatives in Minnesota and Wisconsin, serving about 1.7 million people.
Currently, 70 percent of Great River Energy's production is from coal. And its Spiritwood coal plant, near Jamestown, N.D., mothballed since it was finished early last year, is scheduled to come online next year.
Great River Energy spokesman Randy Fordice said Spiritwood will be a combined heat and power plant, which fits in with an earlier goal of the Obama administration.
Great River Energy achieves Minnesota's conservation and renewable goals, but the co-op has also invested heavily in coal. It patented a process called DryFining.
"It uses waste heat to dry moisture-heavy lignite coal, so it burns more efficiently," Fordice said.
He said Great River Energy will participate in the rule-making process the EPA will now begin, and that the co-op wants the agency to include economic and societal implications in its analysis.
That brings up the disruptions and added expense that may be inevitable for any coal-dependent region or utility, under new federal regulations.
The University of Minnesota's Institute on the Environment's managing director Lewis Gilbert said those challenges will be real. He likens it to biological evolution.
"If your niche goes away, you go extinct, and something else, better suited to the niches that come into being, flourishes," Gilbert said. "I think part of what our economy needs is the creation of new niches for new ways of generating energy to emerge."
Gilbert said the utilities, industries and regions that embrace the transition to a lower-carbon economy will be winners. But he worries about the iron mining industry, which uses a lot of electricity and which was recently exempted from the state solar standard.
The state's forest industry will be in a good position, he said, if some coal generation is replaced by biofuels.
As for environmental groups, they are generally applauding Obama's initiative. Fresh Energy's director of science policy, J. Drake Hamilton, called it the latest in the administration's "steady and responsible steps" to reduce pollution.
