Bismarck energy company officially buys North Dakota's largest coal-fired power plant
Bismarck-based Rainbow Energy Center finalized the purchase of Coal Creek Station nearly a year after reaching an agreement to acquire the 1,150-megawatt power plant.
UNDERWOOD, N.D. — For Dwight Hanson, Coal Creek Station represents much more than a power plant.
He worked as a maintenance mechanic at the plant for 33 years before retiring in September. His son and son-in-law both work in the adjacent coal mine, sustaining five children of their own.
Hanson lives a few miles down the road in Washburn, a central North Dakota city of 1,200 that depends on the local coal industry for jobs and economic prosperity.
Put simply, the plant and mine are the anchor keeping the people Hanson loves in the place he knows best. But two years ago, the plant's future and Hanson's way of life was in serious doubt when the facility's owner announced it planned to shut down the operation.
"You see all these small towns that just have... a gas station, a bar and a church, and that's what would’ve probably happened to Washburn." Hanson said. "It would just basically become a ghost town.”
Despite changing attitudes toward fossil fuels and the declining reliance on coal nationally, the plant looks to have found a path forward.
With the handing over of a symbolic shovel, North Dakota's biggest coal-fired power plant officially started an era under new ownership on Monday, May 2.
Bismarck-based Rainbow Energy Center finalized the purchase of Coal Creek Station nearly a year after reaching an agreement to acquire the 1,150-megawatt power plant. Nexus Line, a subsidiary of Rainbow Energy, bought a transmission line delivering electricity from the Underwood plant to Minnesota's Twin Cities.
Minnesota-based Great River Energy, the plant and transmission line's previous owner, announced in 2020 it would close the plant that had become a financial burden and pivot to more environmentally responsible wind energy.
The impending shuttering of the plant — and likely the nearby Falkirk coal mine — set off an all-out effort by state and local leaders to find a new buyer for the facility. On Monday, they celebrated the plant's new lease on life along with hundreds of industry higher-ups and coal workers.
“This is truly a landmark day and a huge win for the 650 workers here at Coal Creek and Falkirk Mine, for the residents of McLean County, for the entire state of North Dakota and for U.S. energy security and electrical grid reliability,” Gov. Doug Burgum said.
Stacy Tschider, president of Rainbow Energy Marketing Corporation, declined to disclose the terms of the agreement to buy the plant and transmission line.
Under the deal, Great River Energy will buy electricity from Rainbow Energy for the next decade: 1,050 megawatts for the next two years and 300 megawatts for the eight years to follow.
In addition to preserving jobs and the local economy, the continued operation of the plant marks a victory for Republican state leaders who maintain that coal-generated power must overcome economic barriers to keep providing Americans with a reliable, low-cost source of energy.
Rainbow Energy's plan for keeping the plant economically viable revolves around an ambitious proposal to capture and store harmful greenhouse gas emissions underground. If the company pulls off the plan, it would qualify for lucrative federal tax credits.
Industry and state leaders hope the still-emerging carbon capture technology will provide an avenue to make coal more environmentally friendly, bringing the source of energy back in favor after years of gradual decline.
"When we crack the code on carbon capture for coal-fired electricity, not just this country will follow — the world will follow," said U.S. Sen. John Hoeven, R-N.D. "So, let's do it."
Burgum said North Dakota hit the "jackpot of geology" that allows it to pioneer carbon capture projects. The state has several other high-profile carbon capture endeavors in early development stages, most notably the $1.45 billion Project Tundra attached to another central North Dakota coal plant.
However, the successful implementation of carbon capture at Coal Creek would cut down the amount of power the plant could generate. To make up for some of the lost capabilities, Great River Energy plans to purchase power from a proposed 400-megawatt wind farm near the plant.
During last year's legislative session, state lawmakers passed bills that will provide tax breaks to coal plants and carbon capture enterprises.
The state is also directly helping Rainbow Energy. Last week, the state Industrial Commission authorized the North Dakota Transmission Authority to sell $150 million in bonds and offer the proceeds as a loan to Nexus Line to put toward the purchase of the transmission line from Great River.
Not everyone is thrilled by the plant's survival. Environmental groups have advocated for the plant's decommissioning and warned that the state could be committing its resources to a dying industry, according to previous Forum reporting.
A representative of the Sierra Club did not immediately respond to Forum News Service's request for comment.
Rainbow Energy's commitment to coal "secures our future," said Amber Hanson, Dwight's daughter.
Wearing a shirt reading "We Stand with ND Coal," Amber watched over the event Monday that she catered as the general manager of the Captain's Cabin restaurant in Washburn.
The "trickle-down effect" of the plant keeps the businesses, schools and "small town community feel" alive in Washburn and other nearby cities, she said.
"This is a big deal," she said.