News & Updates

What Coal Plant Closures Mean for Minnesotans

by | Apr 19, 2018 | Energy, Infrastructure, Jobs & Wages

In the last few years, several coal plants in Minnesota have either shut down their boilers, idled them, or converted them to another fuel source. These closures have followed national and international trends, where coal-fired electricity loses on cost to natural gas and renewables. What economic impacts will Minnesotans feel?

Sherburne County Generating Station (Sherco). Creative Commons.

The Becker, MN Sherburne County Generating Station, or Sherco, is the largest power plant of any kind in the state. It boasts three boilers and a total capacity of 2,238 megawatts (MW)—enough to power roughly 1.67 million homes. Hundreds of train cars from the Powder River Basin in Montana deliver up to 30,000 tons of coal to the plant per day—but fewer train cars will pull up to the plant in the near future.

In its 2016-2030 Resource Plan, Xcel Energy proposed to replace the smaller boilers, Units 1 & 2, with a combined-cycle natural gas plant. The Minnesota Public Utilities Commission (PUC) agreed to the closures, but left the question of a gas replacement open. Unit 2 will shut down in 2023, and Unit 1 in 2026. Unit 3, which is owned in part by the Minnesota Municipal Power Agency, will continue operation.

In February of last year, the state legislature circumvented the PUC to add a gas plant at Sherco to replace the retiring coal boilers. The 786 MW, $800 million plant will create roughly 150 jobs, 30 of which will be permanent. The Becker plant closure and replacement will lead to a short-term net loss of 150-160 jobs—and it would seem that the loss will be higher once construction of the gas plant is complete.

Xcel began replacing coal with combined-cycle natural gas at the Black Dog Power Plant in Burnsville in 2002, and stopped burning coal there entirely in 2015. Those coal generators, which were built in the 1950s, did not have adequate pollution controls to comply with the federal Clean Air Act. The lost coal generation was replaced with natural gas and solar.

The second largest utility in the state, Great River Energy (GRE) plans to ramp down the output from Coal Creek Station, which is in North Dakota but transmits power to GRE’s 28 Minnesota member cooperatives. The plant is the largest in North Dakota at nearly 1,200 MW. Spokespersons for the company have said that market forces, not regulations, have been behind the slowdown at the plant, which was built after the Clear Air Act.

The Minnesota cooperative also plans to shut down its much smaller, 189 MW Stanton Station, also in North Dakota, and not renew a contract with Dairyland Cooperative’s 379 MW Genoa generating station in Wisconsin. The Stanton plant employed 68 full-time and contractor positions; 28 of those transferred to other jobs within GRE, some retired, and some hit the job market. Closures like the one in Stanton have moved forward despite a push by the federal Department of Energy to pursue small coal power plants.

Minnesota Power, which serves northeastern parts of the state, plans in 2018 to shut down the two smaller boilers at its Boswell plant, which for the time being will still produce upwards of 1,000 MW with the two remaining, larger units. The investor-owned utility also converted a coal plant in Hoyt Lakes to natural gas. In total, Minnesota Power has replaced 335 MW of coal generation in recent years. The closures will eliminate the need for 30 jobs, which Minnesota Power plans to mitigate through retirements and transfers.

Coal generation of all stripes has waned across the country. Even though the state has no coal reserves—and has therefore been spared declines in mining employment—Minnesota has not been immune. As of the end of 2016, 1,722 people worked in coal-fired generation in the state, according to the Department of Energy 2017 U.S. Energy and Employment Report, which does not reflect the Sherco conversion in Becker, GRE’s conversions at North Dakota plants, or Minnesota Power’s shutdowns at the Boswell plant.

The same report notes 412 jobs for Minnesota in natural-gas-fired generation, and 5,766 in wind and solar. The state relies on coal for 39% of its electricity, natural gas for 12%, renewables for 25%, and nuclear for 23%.

Can the people in disappearing coal-generation jobs find work in natural gas plants, or in wind and solar? Will the sources that replace coal generation also replace the lost jobs?

We can extrapolate from the state’s generation mix and job numbers by generation what these stories tell us in anecdotes: some coal job skills are readily transferable to natural gas jobs, but fewer of the latter are available for the same number of megawatts. There may be more jobs in wind and solar per megawatt, but coal-job skills do not necessarily transfer. Some of the job losses may be mitigated through retirements and transfers, but not all.

Researchers at the University of Massachusetts Amherst have proposed a national program for pensions, relocation, and retraining for workers in fossil fuel industries. Some have argued that $10 million devoted to a program like this one could ameliorate the job losses at Sherco, for example. In the context of a billion-dollar project, those costs would be minimal—but to those losing a job, such efforts could prove essential for the future.

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