Great River deal to sell key power line to the Twin Cities gets regulatory OK

Great River Energy on Thursday gained regulatory approval to sell a key power line to the Twin Cities, the last big hurdle for the controversial deal to offload its massive North Dakota coal plant.

Maple Grove-based Great River, Minnesota's second largest electricity supplier, is selling the operation to affiliates of Bismarck, N.D.-based Rainbow Energy Marketing. The last step for approval is a second OK from Great River member cooperatives because the deal has changed slightly.

Great River disclosed Wednesday it plans to build a large wind farm near the power plant, a move that could alleviate concerns that the power line will be dedicated to coal. It also will operate and maintain the 436-mile power line for 20 years, double the time from the original deal.

"I think in the record here we have a commitment to build a 400-megawatt wind farm," said Joe Sullivan, a member of the Minnesota Public Utilities Commission (PUC). "That is pretty significant."

The PUC voted 5-0 to transfer the power line's permit to Rainbow after the company provided adequate financial commitments for decommissioning in case the power line ceases to operate.

Great River announced in May 2020 it would close Coal Creek — North Dakota largest coal-fired power plant — as it pivots to more wind and natural gas generation. Great River said the 1,100-megawatt Coal Creek plant had become such a money loser that it couldn't be sold for even $1.

But the state of North Dakota rallied to save Coal Creek, part of its economically important coal mining and power production industry. After the state stepped in, Great River received more than 20 bids for Coal Creek and the transmission line, agreeing last year to sell them to Rainbow for about $225 million — the power line's book value.

Great River is a wholesale power cooperative that sells electricity to 28 retail cooperatives that in turn serve around 700,000 Minnesotans. Rainbow, an arm of Bismarck-based United Energy Corp., is an energy trader, marketing electricity throughout the United States for over 25 years. It has managed, but not owned, power plants.

"We are serious as a heart attack in getting this across the finish line," Stacy Tschider, Rainbow Energy's president, said in an interview.

But he must wait until at least May for the member cooperatives to vote.

Only one of Great River's retail co-ops voted against the sale last year: Ramsey-based Connexus Energy, its largest member. But the PUC received hundreds of complaints about the sale, many from retail co-op members who felt their co-ops had not been transparent with them.

Changes to the Coal Creek deal prompted more lack-of-transparency complaints from retail co-op members at Thursday's PUC meeting.

A new wind farm near the power plant will only make the $225 million power line deal seem even more lopsided in favor of Rainbow, Sam Villella, a Connexus customer-member, told the PUC. "The [power] line we paid for is being sold for a massive discount that will only increase."

The PUC, though, has much less say in co-op deals than deals by regulated utilities such as Xcel Energy or CenterPoint.

The Coal Creek deal has been panned by some retail co-op members and Minnesota clean-energy advocates who feel Great River is selling at a bargain-basement price — and because the transmission line would continue carrying carbon-intensive coal power under Rainbow's ownership.

Rainbow plans to slash its carbon emissions by "capturing" them and storing them underground — a project estimated to cost $1.5 billion to $1.7 billion. However, carbon capture is a relatively nascent technology that's economically challenging; it has seen its share of failures.

Great River will buy essentially all of Coal Creek's power output until early 2023. For eight years thereafter, Great River will buy about one-third of Coal Creek's production, or 350 megawatts.

Great River and Nexus Line, a Rainbow Energy subsidiary that will own the power line, recently agreed to allocate 400 megawatts of the line's capacity to a planned wind farm near the coal plant, according to a PUC filing. The wind farm would open by the end of 2025, Great River said.

Great River would not disclose further details about the wind farm, including its location. But it's likely to be at least partly in McLean County, an irony given the tortuous history of Coal Creek over the past two years.

Great River's original plan was not only to close Coal Creek, but to build a $1.5 billion wind-power project that would have connected into the power line at the coal plant.

That plan was ditched after McLean County, the power plant's host, placed restrictions on new wind farm developments, a move aimed at keeping hopes alive for the coal plant. The plant employs 240 people, while an adjacent coal mine that supplies it has well over 400 workers.

Now that the coal plant's future is secured, look for McLean County's wind moratorium to be lifted.

"We are going to be working with all interested parties to get the renewables they want going forward," Ladd Erickson, McLean County state's attorney, said in an interview. "We have been waiting for this [Minnesota PUC] process to be done down there. I have meetings with wind developers next week."