Minnesota Power Resource Study Informs Long-Term Energy Planning Process
February 06 2012 - 5:00PM
Business Wire
Minnesota Power, a division of ALLETE (NYSE: ALE), today filed a
study with the Minnesota Public Utilities Commission that examines
how pending EPA regulations, predicted regional energy growth and
customer cost impacts will play key roles in how the company will
provide reliable and affordable electric power in the future.
“The base load diversification report is another important step
in our continuous long-range planning process,” said Allan Rudeck
Jr., Vice President of Minnesota Power Strategy and Planning. “Over
the next five to seven years, Minnesota Power will be making
decisions that have long-term consequences for the supply and cost
of electric power. Minnesota Power is committed to maintaining an
ongoing dialogue with our stakeholders throughout all stages of
resource planning.”
The study examines the cost and reliability impacts of retiring
or continuing to operate Minnesota Power’s Laskin Energy Center,
Taconite Harbor Energy Center and Boswell Energy Center (in Hoyt
Lakes, Schroeder, and Cohasset, Minn., respectively) coal-fired
facilities through 2034 amidst a range of proposed EPA
regulations.
The study provides perspective on the impact that stricter EPA
regulations would have on the future of some of the company’s base
load generation. The intent of the study was to consider a range of
planning scenarios and explore potential impacts, not to draw any
hard conclusions on the future of the company’s plants. The
information will be used to help shape Minnesota Power’s next round
of long-term planning, which will be detailed in its next resource
plan in the summer of 2013.
Among the study’s key findings:
- Minnesota Power’s environmental
investments in recent years have resulted in significant benefits
at reasonable cost. Costs of anticipated controls to meet new EPA
requirements impact Minnesota Power’s smaller and oldest units the
most.
- Investments at the company’s largest
unit, Boswell 4, are showing environmental and economic benefits
for customers for the long-term planning period.
- Coal based generation shutdowns would
carry significant costs to customers, including those associated
with transitioning to new energy supply options.
Rudeck noted that the timing of the study aligns with the
company’s long term resource strategy of reliably and cost
effectively meeting customer needs while reshaping its portfolio to
reduce emissions. Minnesota Power is developing a more diverse,
flexible and efficient energy supply through additional renewables,
such as wind and hydropower, and is on course to achieve a more
balanced coal, non-coal energy mix.
“While we’re adding wind and hydro to our portfolio, we’ve also
made substantial progress in ensuring cleaner, more efficient
baseload facilities,” Rudeck said. “Cleaner and affordable aren’t
mutually exclusive goals, but we can’t accomplish both without
making smart investments in our existing generation plants.”
The company has invested more than $355 million in the past six
years to reduce emissions, such as sulfur dioxide, nitrogen oxides,
and mercury by more than 70% system-wide at its Laskin, Taconite
Harbor and Boswell facilities.
“Taking early action on emission reductions has put us in a
better position to meet new federal standards,” said David
McMillan, Executive Vice President of Minnesota Power. “We know
that environmental regulations will increase costs to our
customers, and that knowledge has driven us to make the proactive
investments we’ve made to date. For now, we believe we’ve taken the
best steps we can to keep our energy affordable into the
future.”
The company engaged a wide range of stakeholders in the study
process, and their feedback helped further shape the scope of the
work. Input was received from the Department of Commerce—Division
of Energy Resources, the Minnesota Pollution Control Agency, the
Izaak Walton League, Fresh Energy, the Minnesota Center for
Environmental Advocacy, large industrial customers and community
members where Minnesota Power has coal-based generation.
“Some observers believe they know what new sources of
electricity Minnesota Power should be using for the next 25 years,”
McMillan said. “The fact is that the impacts of energy supply
decisions last for decades and successful resource planning is a
sophisticated process of balancing cost, reliability and
environmental benefit. Minnesota Power has a long track record of
strong environmental stewardship while providing a reliable,
economic power supply. We will continue to wisely assess and act on
power supply issues while involving all of our different
stakeholders – including residential and business customers.
Minnesota Power’s priorities will continue to include helping this
region’s economy while maintaining a great quality of life.”
Minnesota Power, a division of ALLETE, Inc., supplies electric
service to 144,000 residents, 16 municipalities and some of the
largest industrial customers in the United States.
The statements contained in this release and
statements that ALLETE may make orally in connection with this
release that are not historical facts, are forward-looking
statements. Actual results may differ materially from those
projected in the forward-looking statements. These forward-looking
statements involve risks and uncertainties and investors are
directed to the risks discussed in documents filed by ALLETE with
the Securities and Exchange Commission.
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