Guest post by J. Drake Hamilton, originally posted at Fresh Energy blog
An administrative law judge recommended today that Otter Tail Power Company be allowed to proceed with a plan to charge ratepayers for the costs of installing certain pollution control measures on its Big Stone I coal-fired power plant. Big Stone I is a 1975 vintage, 475-megawatt facility located near Milbank, South Dakota. Otter Tail Power serves about 60,000 Minnesota customers. The planned pollution controls do not include measures that would reduce the carbon emissions from the facility.
With this project, Otter Tail Power, which currently gets more than 90 percent of its electricity from burning coal, would pass up the opportunity to diversify and clean up its energy portfolio. The company is making a commitment to 40 more years of burning coal, when there are better, cheaper, and cleaner alternatives available.
We disagree with the judge’s recommendation because the record shows that the company has better, cheaper alternatives to produce electricity.
Fresh Energy and its allies (the Izaak Walton League of Minnesota, Minnesota Center for Environmental Advocacy, and the Sierra Club) established a record in the contested case proceeding that demonstrated a number of alternative plans that would be cheaper for Otter Tail’s customers. The Minnesota Department of Commerce did not assess the impacts of two critical economic costs: the price of natural gas and the increasing cost of coal. Our analysis showed that when you analyze the cost of natural gas that is in line with current, low prices, and a higher cost for coal that is also consistent with the trend of increasing coal prices, retrofitting the Big Stone I coal plant is not the lowest cost option available. We’ve demonstrated that retrofitting a coal plant is not the best—or cheapest—emissions reduction strategy. Instead, an alternative plan that would replace coal with a natural gas-fired combined-cycle power plant is the least polluting, cheapest option.