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As co-op considers closing Coal Creek, concerns play out in zoning spat

As co-op considers closing Coal Creek, concerns play out in zoning spat

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Coal Creek Station

An aerial view of Great River Energy's Coal Creek Station near Underwood. 

In the months since Great River Energy announced that Coal Creek Station faces serious financial problems, anxiety has spread through North Dakota’s coal country.

The Minnesota-based power cooperative is considering installing 800 megawatts of wind energy in the area in the event that it shuts down the coal plant. That amount of electricity is equal to the power capacity of about four average North Dakota wind farms.

Sometime this year, GRE plans to announce what’s in store for the future of Coal Creek, which has operated between Washburn and Underwood for 40 years. With a capacity of more than 1,100 megawatts, it’s the largest coal-fired power plant in North Dakota and supports hundreds of jobs, including those at the Falkirk Mine next door. The facility has operated at a loss amid market challenges, as it competes with cheap natural gas and renewable energy.

While GRE has remained tight-lipped about its plans, co-op president and CEO David Saggau spelled out one option -- to replace at least some of the facility’s output with wind power -- in a recent letter to McLean County commissioners. The letter came in response to proposed changes to the local zoning code, and it explained that GRE is thinking of connecting new wind farms to its existing transmission line that runs from Coal Creek to Minnesota.

“We are aware that GRE’s recent announcement regarding Coal Creek Station has caused great concern in the County and among its residents,” Saggau wrote. “We hope our proposed investments can ease the burden in the event Coal Creek Station is retired.”

The uncertainty surrounding the fate of Coal Creek came to a head late last month at a county commission meeting, where commissioners approved the zoning amendments. The changes put new restrictions on the development of wind farms in the area.

“We have some legacy power lines, and we’re looking at an industry that’s basically saying we’ve got to have a dramatic increase in them,” said McLean County State’s Attorney Ladd Erickson, who wrote the amendments.

As more wind farms pop up in the area, he envisions more power lines criss-crossing the landscape, becoming problematic for industries such as agriculture and recreation. Like coal, those industries are major economic drivers in the region.

Erickson said he’s concerned crop dusters could have trouble spraying fields, and that power lines could impact recreation around the Missouri River. Lake Sakakawea and Lake Audubon, created by the damming of the river, draw visitors from across the country.

“That’s bread and butter stuff for us,” Erickson said. “They’re not going to come here for wind turbines and power lines.” 

The new zoning rules require that any transmission lines connected to wind turbines in North Dakota are placed at least one mile away from the lakes and river, effectively preventing them from crossing the water bodies.

The wind farms GRE is considering would include “associated transmission lines that would cross the Missouri River and would not be possible with a one-mile setback,” Saggau wrote in the letter to commissioners.

Wind industry supporters worry the ordinance could drive future wind development out of coal counties to other states, causing North Dakota landowners to lose out on lease payments and sending tax dollars elsewhere.

The group North Dakotans for Comprehensive Energy Solutions estimates that 800 megawatts of new wind power would result in local landowners collecting $5 million in lease payments each year and counties receiving $4 million annually in taxes.

“It would be good to keep 800 megawatts of wind energy in our state and use existing infrastructure,” said Tammy Ibach, director of the group, referring to the high-voltage direct current transmission line that begins at Coal Creek.

GRE recently spent $130 million upgrading the line, completing the work last year.

The zoning debate

The zoning changes extend beyond the rule about power lines crossing the river, and they could soon become the subject of a lawsuit.

Saggau, in his letter to commissioners, called the one-mile setback “invalid” and noted that “this type of exclusionary zoning is regularly struck down by courts.”

GRE spokesperson Lyndon Anderson said last week that the co-op is “currently assessing the impact of the county’s decision.”

Erickson, as he was writing the amendments, was already anticipating a legal challenge.

“I informed the commissioners: Just expect we’re going to get sued,” he said.

Saggau has indicated that the county’s zoning decision will not influence GRE’s plans for Coal Creek.

“Closing McLean County to the transmission from wind projects will not keep Coal Creek Station open,” he wrote. “If GRE decides to retire Coal Creek Station, we will do so even if we are unable to complete our projects in North Dakota.”

The co-op offered the county $15 million over five years to help offset lost coal tax revenue if it closes the power plant, but Saggau said it would rescind the offer if the commission approved the zoning changes.

“I’m not saying it was a bad gesture, but it’s not anything that would have us change a decision,” Erickson said. “It’s not going to change the economy or help the schools or cities to any degree.”

The amendments also require that the commission approve a siting plan for new transmission lines. They allow the county to issue a moratorium up to two years on new lines or electrical generation facilities if officials need time to study their impact “on the health, safety, morals, public convenience, general prosperity, and public welfare of the citizens of McLean County.” And they indicate that the county reserves the right to hold up a site permit “until any or all lands that are under mining control are released from their bonds and returned to private ownership.”

State officials like Lt. Gov. Brent Sanford watched the zoning dispute play out.

While he understands where the zoning changes came from, he said they’re “not friendly” toward future energy investment in the county. They could cause a company to think twice about approaching the county with a project idea, he said.

“They might never come to the table and ask if this is something that the local government would be interested in taking part in,” he said.

Looking to the future

The zoning matter served as a catalyst for a number of issues that government officials, energy companies, workers and residents will need to work through as they contemplate Coal Creek's future.

“It really amplified the reaction,” said Sanford, who has been involved in numerous conversations about the plant.

Sanford sees multiple options for GRE that have emerged throughout the course of his discussions since the co-op said earlier this year that it’s looking for solutions to the facility’s financial woes.

It’s possible, Sanford said, that the coal plant won’t need to shut down -- maybe the co-op can find a new owner. He added that a natural gas plant could go in near the site and make use of both the existing transmission line and abundant natural gas from the Bakken oil fields.

Also at stake are two ethanol plants -- one next to Coal Creek and another in Jamestown. Their operations, in part, are based on lignite coal that’s processed at the power plant. Saggau addressed that matter in his letter, saying the co-op could help the facilities convert to running on natural gas.

“This is a very robust conversation, to say the least,” Sanford said.

He hopes to see GRE, and potentially other energy companies, step up to make solutions happen.

“I don’t want to see it be an exit,” he said. “I’d like to see it be a collaborative transition.”

Ibach, with the pro-wind group, suggests that McLean County commissioners and others with a stake in the fate of Coal Creek meet with GRE to ask, “What is it you’d like to do in our county? How can we continue to be business-friendly?”

“I think great conversations can happen and should happen, versus making a statement that makes it appear as though they’re closed for business,” she said.

One group, the Laborers International Union of North America Local 563, hopes to fill some of the jobs that could come if GRE invests in new power generation in the area. Its members work in construction on wind farms, gas plants and pipelines.

“Shutting down new development is not the answer,” wrote Pamela Trhlik, director of governmental affairs and new business development for the Laborers District Council of Minnesota and North Dakota, in a recent letter to McLean County commissioners.

Trhlik used to serve on the commission, including when it enacted its previous zoning ordinances. She urged the board to reject the amendments last month.

“As coal plants retire, we will need to create strong, high-paying jobs,” she wrote. “We can do that by helping organizations like Great River Energy make new local investments as their energy production focus continues to change.”

Another group rallied around the meeting, even streaming it live on its Facebook page.

Faces of North Dakota Coal suggested its followers host watch parties to show commissioners their support for the zoning changes, as public attendance was discouraged because of the coronavirus pandemic.

“I’d like to see more counties bring that discussion to the table,” said Mark Pierce, who founded the group.

Contemplating economic changes

Pierce started the pro-coal Facebook page one year ago “to humanize the industry.”

It took off earlier this year after GRE made it clear that Coal Creek was in trouble. The page now has more than 2,300 “likes” as Pierce shares photos of local coal workers and their families, news articles and other items of interest to people who follow coal developments in North Dakota.

He understands the anxiety people in the area feel about the Coal Creek situation as they realize they need to make plans for their own future.

“I have a brother who worked at Coal Creek who has since taken another job,” he said, adding that cousins and friends of his still work at the plant.

Pierce lives in Beulah in Mercer County, where he works at a mine. He said he cannot fathom what his town or others such as Underwood, Washburn, Hazen and Center would look like without coal.

Great amenities exist in his community, he said, such as a recreation facility called the Energy Wellness Center that opened two years ago with an indoor track, weights and a hardwood basketball court.

“It’s the kind of thing that you don’t expect to see in a town like Beulah,” he said.

013119-nws-erickson.jpg (copy)

McLean County State's Attorney Ladd Erickson testifies to a North Dakota legislative committee in 2019.

Erickson, the state’s attorney, is also thinking about what losing Coal Creek could mean for the area.

“If the decision is made to close it in the short term, we’re going to have to reshape our economy here,” he said.

People who work there and elsewhere in the coal industry are vital to their communities, serving on city and county commissions, school boards and volunteer fire departments, he said. He doesn’t want to see them leave the region.

One way to keep some of them would be to ensure that mine land, if it’s no longer needed to pull coal out of the earth, is reclaimed and put back into use, potentially for first-time farmers, he said.

“We’re going to have to ensure that we can maximize the agricultural economy, and that’s family farming,” Erickson said, adding that the county will need to focus on enhancing its recreation industry as well.

He said wind farms, even with the money they contribute to landowners and local taxes, do not carry the same sort of economic impact. The jobs they generate are primarily temporary, for the construction of the turbines, and don’t help the region’s housing market or bring more families to the area with kids to fill schools, he said.

“Green energy is a penny on the dollar to those other industries,” he said.

Pierce, as he has followed the latest developments in coal country closely, recognizes that there’s a lot of worry. At the same time, he sees optimism as people come together to talk about the future for Coal Creek and the region.

“If people don’t engage, whatever the result, they’re blindsided by it,” he said. “Getting people engaged in the discussion has been a huge positive.”

Reach Amy R. Sisk at 701-250-8252 or amy.sisk@bismarcktribune.com.

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