North Dakota's largest coal-fired power plant will shut down in 2022 unless new buyer can be found
The announcement came after failed attempts by Great River Energy, which serves 1.7 million electricity customers in Minnesota and parts of Wisconsin, to sell or even give away Coal Creek Station.
UNDERWOOD, N.D. — North Dakota’s largest coal-fired power plant will close in two years -- eliminating 740 jobs -- unless buyers can be found to rescue Coal Creek Station and along with it the nearby Falkirk Mine.
Plans call for Coal Creek Station to shut down in late 2022 and be replaced by wind power and by converting another plant in the state to natural gas, the latest casualty in a string of closures as power companies find alternatives more attractive than coal.
Great River Energy, an electricity distribution cooperative based in Maple Grove, Minn., announced Thursday, May 7, its plans to close the 1,151-megawatt Coal Creek Station and to add 1,100 megawatts of wind energy purchases as well as convert the 99-megawatt Spiritwood Station power plant near Jamestown to natural gas by 2023.
Word of Coal Creek Station’s impending closure marks the third announcement in recent years of intentions to shut a coal-fired power plant in North Dakota, where the hulking plants dot the shores of Lake Sakakawea, whose waters cool the generators.
The fate of nearby Falkirk Mine, whose sole customer is Coal Creek Station, now hinges on whether a buyer can be found for the power plant — something Great River Energy has been unable to accomplish, even after offering to give the plant away, but remains open to the possibility.
North Dakota leaders said they are working to find new owners for the plant, which employs 260 workers. Falkirk Mine, which provided 7.4 million tons of coal to the power plant in 2019, employs 480.
“While this news is disappointing, Lt. Gov. Sanford and I are more determined than ever to find a path forward for Coal Creek Station that preserves high-paying jobs and keeps North Dakota’s most efficient and updated coal-fired plant on the grid to ensure baseload power capacity for our state and the region,” Gov. Doug Burgum said in a written statement. “We remain committed to bringing stakeholders to the table to evaluate all options and find opportunity in this uncertainty.”
North Dakota’s congressional delegation also vowed to work to keep the plant open under new owners, and Sen. John Hoeven, R-N.D., said he continues to work on tax credits to make carbon capture and underground storage and enhanced oil and gas recovery more commercially viable.
Falkirk Mine’s owner, North American Coal, issued a statement announcing that it is engaged with others to find new owners for Coal Creek Station.
“We believe Coal Creek Station is an efficient, economic and attractive generation and capacity asset, and the continued long-term operation of the facility is in the best interest of our employees, the local community, region and state,” said J.C. Butler, president and CEO of North American Coal and its parent company, NACCO.
Coal Creek Station, a stalwart of the cooperative’s power generation since it began operating in 1979, is the largest generation facility in the portfolio of Great River Energy, which delivers electricity to 1.7 million people in Minnesota and parts of Wisconsin.
“This is a decision that’s in the best economic interest of our members,” said Jon Brekke, a Great River Energy vice president and chief power supply officer, who acknowledged that the shutdown comes at a cost to families and communities in central North Dakota's McLean County, where the plant employs 260 workers.
To soften the financial blow, Great River Energy will voluntarily continue to make payments to local governments equal to the approximately $3 million it pays in annual property taxes for five years after the plant closes.
Jason Bohrer, president and CEO of North Dakota’s Lignite Energy Council, didn’t try to put a positive spin on news that the wrecking ball awaits Coal Creek Station unless a buyer is found.
“It’s a huge deal for the state of North Dakota,” he said. “I don’t remember a time that we’ve lost 750 workers all at once,” adding that many workers at the power plant and mine earn annual paychecks of $75,000 to $100,000.
“The oil industry ebbs and flows but the coal industry has always been rock solid,” Bohrer said. “That makes it hurt twice as much. It’s also 800 moms and dads who are going home today with horrible news for themselves and their families.”
Lower-cost alternatives, including natural gas, which often is used in plants that generate electricity to serve periods of peak demand, and wind power, meant that electricity produced from burning coal no longer is competitive in the marketplace, said David Saggau, Great River Energy’s president and CEO.
“We’re moving in an opportunistic direction,” Brekke said. “This is a reflection of significant shifts in the wholesale market.”
The cooperative determined that converting Coal Creek Station into a gas-powered peak power plant was not economically feasible, since it would run only during periods of high demand, but it is feasible to convert the much smaller — and newer — Spiritwood Station to run on natural gas.
Great River Energy expects it will take about three years to dismantle Coal Creek Station, a period during which an undetermined number of employees will be kept on.
The wind energy replacements for Coal Creek Station will consist of four wind farms in Minnesota and one in South Dakota. Sites in North Dakota and Wisconsin also were considered.
A leader of Laborers International Union of North America Local 563, whose members maintain the plant, said the news that Great River Energy plans to shut the plant was expected, but still came as a blow.
“What is happening at Coal Creek is the same shift we are seeing all over the country as the price of natural gas continues to come down due to hydraulic fracturing, and as renewable technologies continue to improve, creating an affordable alternative for coal-fired power production,” said Joe Fowler, the business manager for the union local, which has more than 11,000 members in North Dakota and Minnesota.
“This is why LIUNA has ramped up training in North Dakota, in an effort to diversify our members’ skill sets and help them move into other areas within the construction industry to offset the loss of income that comes with closing of these types of power plants,” he said.
Keith Otto, a union member who has worked at the plant for 12 years, has watched the number of workers decline over the years and realized a future working in a coal-fired power plant didn’t look promising as operators cut their budgets.
“Personally, I will expand my skills into pipeline and water and sewer construction,” he said.