Minnesota Power will close coal plants by 2035 under new agreement

Minnesota Power would close its two coal-fired power plants — one by 2030, the other in 2035 — and add significantly more renewable power than originally planned under an agreement with clean energy groups.

The two big coal plants in Cohasset, dubbed the Boswell Energy Center, are currently the Duluth-based utility's largest electricity sources.

"We are expediting the renewables and [electricity] storage we will be adding to the system to help with the transformation [away from coal]," said Julie Pierce, Minnesota Power's vice president of strategy and planning.

The Minnesota Public Utilities Commission (PUC) on Thursday is set to debate Minnesota Power's long-term resource plan. On Monday, the utility filed with the PUC an agreement with clean power groups, which also included studying the closure of the second Boswell generator earlier than 2035.

In addition, Minnesota Power, which serves 145,000 customers in northeastern Minnesota, agreed to double the amount of wind power it had planned to add to its system by 2030 to 400 megawatts; increase by 50% its planned solar additions to 300 megawatts by 2030; and roll out batteries to store 100 to 500 megawatts of electricity by 2026.

Pierce said plans for increased renewables and storage got a boost from the recent Inflation Reduction Act and 2021's Infrastructure Investment and Jobs Act. The latter beefed up federal spending on the power grid; the former provided a trove of new tax subsidies for renewable energy projects.

The Inflation Reduction Act's expansion of tax credits for energy storage particularly made Minnesota Power feel "comfortable" adding batteries to its resource plan, said Allen Gleckner, lead director for clean electricity at research and advocacy group Fresh Energy in St. Paul.

Minnesota Power "is taking the steps to really accelerate renewables and storage on its system," Gleckner added. "They have certainly been doing that, but this takes it to the next level."

After 2030, Minnesota Power's remaining generator in Cohasset would be the only large coal-fired power plant operating in the state. Xcel Energy, the state's largest electricity provider, has committed to closing five Minnesota coal generators by 2030, starting next year.

However, figuring out how to fully replace all of its lost coal electricity — while remaining a reliable electricity provider — will remain a task for Minnesota Power in its next long-term resource plan, slated for 2025.

Utilities in Minnesota every few years must submit a long-term power generation plan to state regulators, focusing on the next five years but considering the next 15. The plans are often contentious, with sparring between utilities and clean energy and ratepayer groups.

The agreement filed Monday was between Minnesota Power, a subsidiary of Allete, and four clean energy groups: Fresh Energy, the Minnesota Center for Environmental Advocacy, the Sierra Club and Clean Grid Alliance.

The city of Cohasset, Itasca Economic Development Corp. and four labor unions also signed on to the agreement. Boswell Energy is a regional economic anchor, employing about 300 people and creating maintenance jobs for hundreds of building trades workers.

All of the parties agreed "on a common goal, which from the beginning has been a cleaner energy future," Pierce said.

The Minnesota Department of Commerce was not part of the agreement. Commerce has proposed retiring one Boswell coal generator in 2025 and the other in 2030.

The agreement would remove from the resource plan the prickly issue of Minnesota Power's planned $700 million gas-fired power plant in Superior, Wis. However, the plant's fate is still playing out in other regulatory proceedings, primarily with the federal government.

Minnesota Power would own 20% of the Superior plant and manage it. The company says the facility is needed to help replace lost coal power and maintain reliability — making sure the lights stay on, in other words, as more intermittent renewable energy comes online.

The PUC approved Minnesota's Power's participation in the plant in 2018. The Minnesota Court of Appeals last year shot down an appeal of the PUC's decision by clean energy groups.

The organizations — along with the Minnesota Attorney General's Office — were trying to quash the plant through Minnesota Power's resource plan.