Wisconsin PSC Backs Construction of Gas-Fired Plant

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Construction of a $700 million natural gas-fired power plant near the Wisconsin-Minnesota border was authorized by Wisconsin regulators on Jan. 16, over the objections of environmental groups who have said the plant is not needed.

Dairyland Power Cooperative and Minnesota Power would jointly own the 625-MW Nemadji Trail Energy Center, which on its current timeline is scheduled to come online in 2024. Wisconsin's Public Service Commission (PSC) voted 2-1 on Thursday to allow the project to move forward. The utilities have said the plant would enable them to move away from coal-fired power and support their integration of wind and solar generation resources.

Several environmental groups oppose the plant, including the Sierra Club, the Union of Concerned Scientists, and the Minnesota Center for Environmental Advocacy. Wisconsin's Department of Natural Resources (DNR) also opposes the plant, citing local impacts such as loss of wetlands and depletion of groundwater. The Wisconsin PSC has previously said it would not consider the environmental impacts of the project because construction of the plant is not funded by ratepayers. It said it would support construction if the plant meets the state's air quality standards.

Minnesota Power, a utility division of Midwestern energy company ALLETE, which is headquartered in Duluth, and La Crosse, Wisconsin-based Dairyland Power Cooperative want to build the plant on land between the Nemadji River and Enbridge Energy's Superior terminal, near Lake Superior at the border of Minnesota and Wisconsin. The terminal is a hub for U.S. crude oil imports, and a distribution center for the movement of crude oil across the U.S.

Bipartisan Support for Construction

Dairyland Power Cooperative is a merchant power provider, not a regulated investor-owned utility. Wisconsin law limits the PSC's oversight over merchant power plants, which are independent and sell their power to customers, usually in a competitive market.

The project has bipartisan backing from state and regional lawmakers, many of whom filed letters of support for the project with the PSC.

The project still faces headwinds in Minnesota. An appeals court there last month revoked Minnesota Power's authorization to invest in the plant, saying that state's Public Utilities Commission (PUC) must consider environmental consequences.

Minnesota's PUC in a 3-2 vote has approved Minnesota Power's part in the deal. The PUC said it would not require an environmental review because the plant is sited in Wisconsin.

Rebecca Valcq, the Wisconsin PSC's chair, was the dissenting vote Thursday against the plant. She said she was concerned about the plant's environmental impact due to its location, while noting the need for a regional facility to provide needed electricity.

"I'm not convinced our needs in the near term can be met with only wind, solar and conservation," Valcq said Thursday. "This could maybe be a great, well-run plant, but this is not the site for it."

Ellen Nowak and Mike Huebsch, commissioners who voted to support the plant's construction, said Nemadji Trail's potential benefits in supplying power to the region outweigh any environmental risks. Nowak and Huebsch said environmental questions could be addressed by the DNR.

"This is not the perfect solution to our energy needs, but it is the best solution available to us today," Huebsch said.

"I feel satisfied that, with conditions, that this is not going to be a harm to the environment," Nowak said. The DNR, though, has not issued all the required permits for the project.

Transitioning from Coal to Gas

Rob Palmberg, Dairyland's vice president of external relations, in a statement said the plant is critical to the utility's move away from coal-fired power. "As Dairyland continues to embrace solar and wind generation, Nemadji Trail's ability to respond on demand will provide key support for our cooperative's evolving energy future," Palmberg said.

The Sierra Club, meanwhile, in a statement said the plant will be "an environmental and economic disaster" that will set back "home-grown renewable" energy for years in northern Wisconsin.

More than 75% of Wisconsin's power in 2019 was produced by coal- and natural gas-fired plants. About a dozen gas-fired plants have been built in the state since 2000, and Alliant Energy's 700-MW Riverside Two plant near Beloit is scheduled to begin commercial operation this month.

Alliant's investment in the Riverside project comes as the utility also plans to ramp up its funding of renewable energy. Alliant late last year announced plans to build up to 1 GW of solar power generation in Wisconsin by 2023. Alliant has pledged to reduce its carbon emissions by 80% by 2050.

-Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).

The post Wisconsin PSC Backs Construction of Gas-Fired Plant appeared first on POWER Magazine.