Montana-Dakota Utilities to close uneconomical coal plants in favor of gas and wind
Energize Weekly, February 27, 2019
Montana-Dakota Utilities (MDU) said it will close three aging coal-fired generation units in the next three years, replacing the capacity with cheaper natural gas-fired and wind generation.
“Low-cost power available on the market, due to low-cost natural gas and increasing wind resources, as well as rising costs to operate these facilities, led to the decision to retire the coal plants,” the company said in a statement.
The closures are slated for the end of 2020 at the Lewis & Clark Station in Sidney, Mont. and the end of 2021 for units 1 and 2 at the Heskett Station in Mandan, N. D. The coal supplier for the two plants faces a pending bankruptcy proceeding.
MDU is planning to construct an 88-megawatt (MW) natural gas peaking plant at the Heskett Station pending approval from the North Dakota Public Service Commission.
MDU estimated that building a new natural gas turbine and buying wind power from the wholesale market would cost half as much as continuing to run the Heskett and Lewis & Clark coal-fired units.
The utility purchases wholesale power through the Midcontinent Independent System Operator (MISO), which covers all or parts of 15 states and one Canadian province.
The company said it believes a second combustion turbine at Heskett will be cost effective since the site has the required infrastructure and a natural gas supply already serving an existing gas-fired unit, which went online in 2014. The new unit could come online as early as 2023, MDU said.
The two coal stations have 77 employees. When the units are shuttered, about 10 workers will be needed to operate natural gas units at Heskett and Lewis & Clark. The company said it will offer retraining for employees seeking to fill open positions in other areas of its operations.
The first coal-fired unit at Heskett went online in 1954, while the first coal-fired unit at Lewis & Clark began generating in 1958. A second coal unit went into operating at Heskett in 1963. The Heskett units have a combined capacity of 100 MW. The Lewis & Clark unit has 44 MW of capacity.
“The plants have served our customers well, providing low-cost energy for many years, operating roughly twice as long as expected when they were constructed in the mid-1950s and early 1960s,” Nicole Kivisto, MDU president and CEO, said in a statement. “The age of the plants, low-cost competition on the market, and the ongoing cost to operate the plants all have contributed to the plants being too expensive to operate much longer.”