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EPA challenges environmental review for proposed $700 million Minnesota Power gas plant

EPA challenges environmental review for proposed 0 million Minnesota Power gas plant

The U.S. Environmental Protection Agency has challenged an environmental review of a controversial gas-fired power plant planned for Superior, Wisconsin, saying it did not adequately evaluate carbon dioxide emissions.

The EPA made its recommendations last week to the US Department of Agriculture’s Rural Utilities Service, which recently completed an environmental review of the $700 million facility.

The plant will be 20% owned by Duluth-based Allete, the parent company of Minnesota Power, a utility serving northeastern Minnesota. Minnesota Power would build and operate the plant.

Regulators and courts in both Minnesota and Wisconsin have ruled favorably for the facility – known as the Nemadji Trail Energy Center (NTEC) – but a review process continues at the federal level.

That’s because La Crosse-based Dairyland Power, which will own 50% of the facility, is seeking financing for the facility from the Rural Utilities Service. The power cooperative has not disclosed how much funding it is seeking from the federal program.

The program provides low-interest loans to cooperatives for electricity infrastructure.

The Rural Utilities Service conducted an environmental assessment of the NTEC and concluded in May 2021 that it would not have a significant impact.

However, four environmental groups – the Minnesota Center for Environmental Advocacy, Honor the Earth, the Sierra Club and Clean Wisconsin – asked the USDA to withdraw its conclusion and conduct an analysis of greenhouse gas emissions and climate change.

The USDA’s supplemental review — with a climate analysis — was completed in June.

NTEC will pump out 2.24 million tons of carbon dioxide annually, but that will lead to a net reduction of 964,000 tons in overall greenhouse gas emissions from the upper Midwest electric grid from 2025 to 2040, the review states.

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That’s because NTEC would displace coal power – which emits twice as much CO2 – as well as production from less efficient gas generators, according to the review.

NTEC will also reduce transmission load on the upper Midwest grid, which will boost renewable energy, the USDA review said. The Star Tribune has reported that power line congestion has gotten so bad in southern Minnesota that some wind farms have had to increasingly curtail production.

However, the EPA concluded that USDA’s new review “does not fully quantify or adequately disclose the impacts of [greenhouse gas] emissions.”

The review did not calculate life-cycle greenhouse gas (GHG) emissions associated with NTEC, including for the plant’s construction and for gas extraction and transport.

“Without upstream, construction-related activities and indirect GHG emissions estimates, it is not clear that the project’s GHG emissions would be lower than GHG emissions in the no-NTEC scenario,” the EPA said in its comments.

EPA also estimated that the social cost of carbon associated with NTEC between 2025 and 2040 would cumulatively amount to $2.15 billion. The social cost of carbon takes into account economic damages.

USDA will continue to take comments on NTEC through most of August before making a final decision on the project’s environmental impact.

“EPA’s comments demonstrate that the current plan for the Nemadji Trail Energy Center is reckless,” Evan Mulholland of the Minnesota Center for Environmental Advocacy said in a statement.

“In a climate crisis, the last thing we should be doing is adding more pollution by building new fossil power plants.” Environmental groups are asking the USDA to deny funding to NTEC.

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In a statement, Dairyland Power said NTEC will provide reliable power generation to support the expansion of wind and solar power plants. Minnesota Power said it will continue to work through regulatory and permitting reviews.

In 2018, the Minnesota Public Utilities Commission (PUC) approved Minnesota Power’s participation in NTEC, a decision that environmental groups appealed.

In August 2021, the Minnesota Court of Appeals ruled that the PUC correctly found that NTEC is necessary and “serves the public better than a renewable resource alternative.”

In May, a Dane County Circuit Court judge upheld NTEC approval by Wisconsin regulators. Environmental groups have appealed this decision to a higher court in Wisconsin.

North Dakota-based Basin Electric Power Cooperative will be the third partner in NTEC, owning 30% of the plant.

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