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Gas-plant debate moves from Minnesota to Wisconsin

Energy News Network

SUPERIOR, Wis. (AP) — Clean-energy advocates will get a second chance to block the proposed construction of a natural-gas plant in northern Wisconsin, although the odds of prevailing are not in their favor.

After winning approval from Minnesota’s utility commission in October, plans for the 550-megawatt, $700 million Nemadji Trail Energy Center are expected to go before Wisconsin regulators next year. If built, the gas-combustion turbine plant would be owned by Wisconsin’s Dairyland Power Cooperative and a subsidiary of Allete, the parent company of Minnesota Power. Work on it could get underway as early as 2020, according to Dairyland officials.

When considering the project, Minnesota regulators were plunged into a debate over whether the plant was even needed in the first place. In Wisconsin, in contrast, the Public Service Commission will only be considering whether the proposed project site, in the city of Superior, is appropriate.

Various Wisconsin clean-energy and environmental organizations are likely to oppose or question the plant. None, though, has yet taken a formal stance, mostly because Dairyland Power has not filed the paperwork needed to initiate an appearance before the Public Service Commission.

Opponents of the plant haven’t got any easy fight ahead of them. The Wisconsin regulators are all appointees of Gov. Scott Walker, a Republican, and have generally shown themselves to be unmoved by environmental arguments.

“This has been discussed and has been in the news a long time,” said Martin Day, division administrator with the commission’s Division of Energy Regulation. “The outside politics have been worked up in this process.”

Dairyland and Minnesota Power have said the plant would help them increase their use of renewable power and meet expected growth in electrical demand. Those arguments eventually won over Minnesota regulators, who sided with the utility 3-2 even though various clean-energy advocates and a group of industrial customers contended the region’s power needs could be better met by using renewable energy or increasing energy efficiency, or by building a smaller plant.

Such arguments are likely to hold little sway in Wisconsin. Because of statutory limitations, regulators in this state will only be able to consider whether the proposed site for the plant is appropriate. Even so, the size of the proposed plant will mean Dairyland will have to file a more detailed Certificate of Public Convenience and Necessity, said Jim Lepinski, chief engineer of the PSC’s Division of Energy Regulation.

At Dairyland’s preferred site in Superior, the company’s plans for the new plant will most likely necessitate getting the Public Service Commission’s approval of a proposed relocation of a natural-gas plant. Once a project application is submitted and deemed complete, the commission will have 180 days to take action or request an 180-day extension. Since the project will also require an environmental-impact statement and entail complicated financial arrangements, the process could take nine months to a year “at best,” Lepinski said. Throughout it all, the public will have several opportunities to comment.

This past decade has seen Wisconsin regulators approve only one natural-gas plant: the $700 million Alliant Energy project, which was an addition to an existing plant near Beloit in southern Wisconsin.

Minnesota Power has argued its proposed new plant would help it to get more energy from renewable sources by serving as a backup at times when the sun is shining brightly enough or the wind blowing hard enough to meet energy needs. Dairyland Power, which serves electric cooperatives in Wisconsin and Minnesota, makes the same argument.

“We’re trying to diversify our portfolio into things other than coal, and that is wind, solar, hydro and certainly gas,” said Rob Palmberg, Dairyland vice president of strategic planning.

Palmberg acknowledged Dairyland still depends heavily on coal. It gets only 16 to 17 percent of its total generation coming from renewable sources, although it is on track to get 20 percent soon, he said. The company’s website shows coal, however, is expected to still be the fuel used for half of the company’s energy production in 2027.

The new plant is not likely to result in the retirement of any coal plants. “I would say no, not in the short run, but it does provide us options for new wind and solar contracts,” Palmberg said. “Our resources are aging, there are cost pressures on them, and this allows us some options for what we want to do with those facilities.”

For Dairyland, a new natural-gas plant would also give it the sorts of options it had once had with a plant in Alma. That plant, which closed in 2011, could have its power generation increased and decreased quickly.

Another reason for the plant is increasing demand for power. One member of Dairyland in Illinois and three in Minnesota members are adding service territory in places that used to get power from Alliant Energy. “They add significant load to our system,” Palmberg said.

The site in Superior is well suited to serving both Dairyland and Minnesota Power since it lies near both a gas source and 345-volt transmission line, Palmberg said. The plan would also stand near the Nemadji River, a fact that has given rise to environmental concerns. But it would not touch the water and is not expected to have an effect on nearby wells.

That said, there is no consensus yet on the questions of whether natural-gas plants, by providing a backstop renewable generation, are the best way to encourage the use of clean energy. A recent report sponsored by the Minnesota Department of Commerce suggests wind and solar could be used to provide 70 percent of the power transmitted on the electric grid and that natural-gas plants could be relied on far less than now.

Katie Nekola, general counsel for Clean Wisconsin, said her organization will “fight this thing,” in part by drawing on some of the same arguments made against the plant in Minnesota.

“We have no more time for fossil fuels,” she said. “Natural gas as bridge to renewable energy has expired and we need to invest in battery storage, renewables and other zero carbon options.”

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