Minn. power plant that burns turkey poop faces closure

Burning Minnesota turkey litter for power can be traced to a 1994 legislative compromise over nuclear waste.

As Xcel Energy sought permission to store radioactive waste in above-ground dry cask storage at its Prairie Island plant, those who opposed nuclear saw an opportunity to boost renewable energy in the state. The deal struck at the Legislature included a requirement that Xcel generate or buy 125 megawatts of biomass energy.

For the past decade, about 50 megawatts of that mandate has come from a plant in western Minnesota that burns turkey litter and other biomass, such as wood chips. But this week, the plant's 45 employees were told the plant could close, said Reed Anfinson, owner and publisher of the Swift County Monitor-News.

"Biomass is no longer the attractive fuel it once was," he said.

A decade ago, Benson Power, formerly known as Fibrominn, was a point of Minnesota pride — the first of its kind in the country. Then Gov. Tim Palwenty lauded the plant in his State of the State speech in 2006, the same year Nancy Pelosi, the Democratic leader in Congress, toured it.

Pawlenty called Benson "a really innovative town," adding, "Anytime you create something everyone needs from something nobody wants, you're getting somewhere."

The plant gave area turkey farmers a new market for manure and created work for truckers who deliver some 500,000 tons of biomass to the plant annually. The plant accounts for a quarter of the city's current property tax revenues, said Anfinson, who also serves on the city's economic development authority.

"We have a huge financial interest in it continuing to operate," he said.

Xcel has about 10 years left on a contract to buy the power at a premium, but the utility wants out.

"The costs to rate payers are near $100 million a year, the environmental benefits are minimal, and it just hasn't worked," said Rep. Pat Garofalo, R-Farmington and chairman of the House energy committee.

Xcel officials declined to be interviewed for this story, but said in a statement that biomass power costs up to 10 times more than new wind power.

"As one of the industry leaders in reducing carbon emissions at a low cost to our customers, we want to pursue new and emerging technologies that are cleaner while still providing good economic value for customers," the statement read.

Earlier this month, Garofalo's omnibus energy bill would have ended the biomass mandate and allowed Xcel to renegotiate its contracts. But Garofalo agreed to remove the language — at least temporarily — to allow biomass backers to negotiate a compromise.

A story Anfinson wrote in the Monitor-News about the debate got some attention from someone else: contract loggers and truckers from the Iron Range. The industry, hit hard by a decline in paper and lumber production, was benefiting from Xcel's contract with the Laurentian Energy Authority to buy biomass power generated in Hibbing and Virginia.

"This legislation caught everybody off-guard," said Scott Dane, executive director of the Associated Contract Loggers and Truckers of Minnesota.

Dane said many of the companies he represents have made large investments based on knowledge that the contracts would last another 10 years.

"I talked to a logger that just bought a new chipper in February to support the Laurentian Energy Authority project. He spent $375,000 to buy a new chipper," Dane said. "The impacts to loggers would be catastrophic."

Talks are ongoing at the Legislature, but no one disputes that energy economics have changed dramatically since the biomass mandate was first put in place.

Rep. Alice Hausman, DFL-St. Paul, was on the conference committee responsible for the 1994 nuclear waste compromise. She said lawmakers have loosened requirements to help the industry along, but it still lags behind other technologies.

"Even today, wind and solar the economics have absolutely proven themselves. I think biomass is still struggling," she said.

Xcel's early venture into wind energy was successful, and the utility has since become a wind energy powerhouse. Xcel leaders say wind has been so cheap and reliable that they're investing in more and expect it to generate a third of the utility's electricity by 2021.

That's bad news for the communities selling Xcel biomass power. Anfinson, who years ago visited biomass plants in the U.K. to report back on whether burning turkey litter was a smelly operation, said the communities are working to get what they can out of negotiations.

"These communities where biomass plants were built made huge commitments themselves financially to the future of that power, based on promises made to them by Xcel Energy and promises made by the Minnesota Legislature," he said.