WHAT IS BEING PROPOSED?
Two utilities, Minnesota Power in Minnesota and Dairyland Power in Wisconsin, have asked regulators for permission to build a $700 million new fracked gas power plant, the Nemadji Trail Energy Center (NTEC), in Superior, Wisconsin. The proposed gas plant would be built along 31st Ave E, between Grand Ave and E 10th St. As seen on the map to the right, the proposed site is in Superior, Wisconsin, near Duluth, Minnesota, and Lake Superior. The utilities must receive approval by regulators in both Wisconsin and Minnesota, because the plan is a joint venture between utilities from each state.
CONCERNS ABOUT PROJECT COSTS
Minnesota Power and Dairyland have not proven that this gas plant is needed to meet customer’s electricity needs and they have not thoroughly looked at alternatives, like low-cost energy efficiency, renewable energy, and storage. Because of the plant’s high and unnecessary cost, environmental groups, industrial customer groups, student groups, and consumer groups were aligned in opposition to the plant. Likewise, the Administrative Law Judge overseeing the hearing in Minnesota recommended the Minnesota Public Utilities Commission reject the proposal. In fact, a 2019 study published by Rocky Mountain Institute examined 88 proposed gas plants around the country and found that 90% of them, including NTEC, would provide electricity that costs more than if the utilities instead invested in wind, solar and energy efficiency. A November 2019 analysis, conducted by the Sierra Club using the Rocky Mountain Institute's methodology, came to similar conclusions.
CONCERNS ABOUT CLIMATE IMPACTS
If Minnesota Power and Dairyland Power succeed in constructing this proposed gas plant, they would commit the Northland to burning fossil fuels for decades to come. To break even on paying back its costs, the plant would need to operate at least into the 2050s -- past the point that scientists tell us our electricity grid must be carbon-free. In addition to the economic shortcomings, this plan would also seriously harm efforts to truly reduce greenhouse gas emissions and address the climate crisis.
First, extracting fracked gas releases methane into the atmosphere. Methane is a greenhouse gas that traps more heat than CO2, although it also breaks down more quickly than CO2. Still, experts agree that methane is 30 to 80 times more potent than carbon dioxide, depending on the timeline being examined.
In addition to methane releases during extraction or transportation, burning fracked gas for power produces greenhouse gases as well. While burning coal continues to be the most environmentally dangerous source of electricity, burning fracked gas is by no means a source of “clean” energy, especially when compared to renewable sources like wind or solar. When both carbon and methane emissions are considered, the latest science shows that the build-out of gas infrastructure will prevent us from reducing greenhouse gas emissions to the level necessary to avoid the worst impacts of climate change.
CONCERNS ABOUT WATER IMPACTS
Constructing the plant would require the utilities to destroy nearly 20 acres of wetlands along the Nemadji River. Wetlands are critical resources for reducing flooding risks for communities, and those risks have increased as climate scientists predict more heavy rain events due to climate change. The proposed plant would be located at the top of a steep slope with a historically high risk of erosion, potentially causing stormwater runoff. The utilities also estimate they would need to pump almost 3 million gallons of water a day to operate the plant, rivaling the total daily water usage of the City of Superior. The Wisconsin Department of Natural Resources has said that pumping that amount of groundwater may not be sustainable and it is uncertain whether permits for high-capacity wells could be issued.
CONCERNS ABOUT CORPORATE TRENDS
Even if gas-fired power was able to compete financially with renewable energy sources, there’s a growing trend of Minnesota-based companies moving away from fossil fuels and towards clean energy for environmental reasons. In 2019, nine Minnesota-based companies--including General Mills, Best Buy, and Target--called upon lawmakers to address climate change. Similarly, 3M has announced their goal of moving to 100% renewable electricity in all its facilities, beginning with its headquarters in St Paul. In Wisconsin, Advocate Aurora Health has committed to powering its facilities with 100% renewable energy, and dozens of other companies have been honored as “Green Masters.”, Building a power plant that generates electricity by burning fracked gas, as Minnesota Power and Dairyland Power are proposing, runs the risk of conflicting with corporate commitments to go green.
PROPOSAL STATUS: MINNESOTA
This plant was initially approved by the Minnesota Public Utilities Commission (PUC) in a 3-2 vote, despite the Administrative Law Judge’s recommendation that the proposal be rejected. On Monday, 12/23/2020, the Minnesota Court of Appeals overturned the Minnesota PUC’s approval. The Court’s decision requires the Minnesota PUC to assess the impact of pollution the plant would create over its forty year lifespan, including greenhouse gas pollution, air and water pollution and other impacts. Minnesota Power has appealed this decision to the Minnesota Supreme Court; the Court will decide whether to accept the appeal this year.
PROPOSAL STATUS: WISCONSIN
In Wisconsin, the Sierra Club and others have repeatedly raised concerns about NTEC’s environmental impacts--Clean Wisconsin opposed the project, citing impacts to wetlands, the unsuitability of the site, and stormwater runoff risks. The Red Cliff Band of Lake Superior Chippewa Indians also opposed the proposed plant, and the Wisconsin Department of Natural Resources (DNR) raised concerns about impacts to groundwater supply due to the large amount of water needed to operate the plant., Public hearings were held by the PSC in Wisconsin in late October, 2019, where the public expressed concern about the environmental and financial impact of the proposed fracked gas plant.
The PSC, however, ultimately decided not to consider the full scope of climate impacts associated with the plant. In early 2020, Dairyland and South Shore Energy, a subsidiary of Minnesota Power, received approval for the proposed gas plant from the Wisconsin Public Service Commission (PSC). Sierra Club and Clean Wisconsin filed an appeal to in Dane County Circuit Court on Friday, February 28, 2020, for review of the PSC’s decision to approve construction.
The DNR has not yet issued permits needed for the proposed plant. A hearing for the facility’s air permit was held in January, 2020, and another hearing for NTEC’s water permit has yet to be scheduled. More information from the DNR is available at https://dnr.wi.gov/topic/WaterUse/ntec.html.
LOOKING AHEAD
Currently, regulators in both Wisconsin and Minnesota are reviewing plans for the proposed gas plant. The timeline on those reviews is still evolving.
ADDITIONAL BACKGROUND INFORMATION AND RESOURCES
- Sierra Club, Building New Gas Plants will leave Minnesota ratepayers on the hook for hundreds of millions of dollars in stranded costs
- Rocky Mountain Institute, “A Bridge Backward? The Risky Economics of New Natural Gas Infrastructure in the United States”
- Utility Dive, “'Eyes wide open': Despite climate risks, utilities bet big on natural gas”
- New York Times, “As Coal Fades, Natural Gas Becomes the Climate Battleground”
- The New England Journal of Medicine, “The False Promise of Natural Gas”
CONTACT
For additional information, please contact
Renner Barsella, Deputy Press Secretary, at renner.barsella@sierraclub.org
Rebecca Kling, Deputy Press Secretary, at rebecca.kling@sierraclub.org