Potential new owner in talks to save North Dakota's largest coal-fired plant
North Dakota officials have made saving the power plant a top priority, and Thursday's announcement marks a big step in the year-long process aimed at salvaging the plant.
BISMARCK — North Dakota’s largest coal-fired power station, which is due to close next year, appears to be on the brink of landing a new owner in a bid that would rescue the plant from shutting down.
Coal Creek Station, the 1,100-megawatt power plant near Underwood, was slated for closure by its current owner Great River Energy last year, as the economics of the coal industry have faced mounting pressure from natural gas and ascendant renewable energy sources like wind power. But North Dakota leaders have made saving Coal Creek a top priority, and state officials announced Thursday, March 25, that Great River Energy has moved into exclusive negotiations with a prospective new owner for the plant.
“They’re so close, they’re like inside of the 5 yard line,” said Lt. Gov. Brent Sanford, who has taken the helm in state efforts to find new ownership for Coal Creek.
North Dakota officials and Great River Energy have both been mum on the identity of the interested party, but they said the prospective buyer's intentions to pursue carbon capture projects attached to the plant are a crucial factor in the considerations.
If the sale goes through, Great River Energy said in a statement that the new owner would purchase the power plant along with the attached high-voltage transmission line. The new owner would also preserve the several hundred jobs associated with the operation, jobs that have heightened the political will to save the plant. Coal Creek itself employs almost 250 people, while the attached Falkirk Mine, operated by North American Coal, supports several hundred more jobs.
Coal Creek and other North Dakota coal plants have come under the looming threat of closures as utility providers and power grid operators are increasingly transitioning away from coal to natural gas and wind power. Mandan's Heskett Station is also slated for closure later this year , to be replaced by a natural gas facility.
And even Coal Creek, sometimes called the Cadillac of North Dakota coal plants, looked to be on the chopping block after Great River Energy announced last May plans to close the facility and replace much of its generation with wind farms. Amid existential concerns about the future of coal power, North Dakota officials have looked to rescue Coal Creek Station and ward off a domino effect of other coal plant closures. In the Legislature, lawmakers are considering a proposal to extend tens of millions of dollars in tax breaks to the coal industry, on top of a low interest loan program reaching into the hundreds of millions of dollars that could go to low-emissions technology like carbon capture.
But the longer-term viability of this mission likely hinges on advances in carbon capture and storage, expensive emerging technology that North Dakota leaders hope will make coal power cleaner and more economically sustainable.
“There is no future for lignite plants without the ability to sequester carbon,” said Ladd Erickson, the McLean County state’s attorney, who has been involved in efforts to save Coal Creek Station. “If you want to eliminate the issue and have long-term certainty, you have to capture carbon. That’s the direction North Dakota is going.”
North Dakota has looked to become a national leader in carbon capture and storage. Just last month Sen. John Hoeven, R-N.D., announced plans for the construction of a major pipeline network to transport sequestered carbon from other states for storage in western North Dakota.
The announcement of exclusive negotiations for Coal Creek was broadly celebrated among North Dakota leaders on Thursday. Gov. Doug Burgum heralded “wonderful news” for workers and communities tied to the plant and noted that the purchase could double as an important development in the state's ambitious carbon capture goals.
Hoeven similarly called Thursday’s announcement “a big step forward.”
“At the same time,” the senator added, “Coal Creek presents yet another opportunity for North Dakota to crack the code on carbon capture technologies, allowing us to continue utilizing our abundant coal resources while reducing emissions.””
Hoeven and Sen. Kevin Cramer, R-N.D., are supporters of tax incentives to make carbon capture and storage economically viable, and part of a bipartisan coalition of senators who on Thursday announced new legislation to advance federal carbon capture tax credits.
Coal Creek Station can be a global pioneer in demonstrating on a commercial scale the feasibility of capturing and storing carbon, said Brad Crabtree, vice president of carbon management for the Great Plains Institute.
“This project would be of global significance,” he said. “This could put our state and region on the map globally as a climate and technology leader.”
Parties involved in the possible transaction have kept most specifics close to the chest, but the identity of a new owner should come out in the next two months, if a deal is finalized. The effort to save Coal Creek Station faces a June 1 deadline, the date when a plant owner must notify the electric grid operator if the facility will continue to generate power.
“June 1 is a hard date,” Erickson said. “That’s a requirement.”
A statement from the governor’s office noted the national sweep of the ownership search, and three of North Dakota's largest utility providers, Basin Electric, Minnkota Power and Montana-Dakota Utilities each told The Forum that their companies are not involved in the negotiations.
“They’ve got a broader expertise in the energy marketing world and operating in other jurisdictions,” Sanford said of the prospective buyer. “I think people might be surprised when they find out who it is.”