Legislature done with Benson’s $20 million in place

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Truckers, loggers and other suppliers of Benson Power, LLC, could be getting $40 million in compensation as Xcel Energy looks to shut down the biomass power plant.

$40 million for Benson Power suppliers on governor’s desk

Minnesota’s 2018 Legislature adjourned late Sunday night leaving the $20 million in payments scheduled to come to City of Benson over the next four years to compensate for the loss of Benson Power, LLC, in place.

The first $4 million payment is scheduled to come by June 30. After that, $6.5 million payments are scheduled to be made by June 30, 2019, and June 30, 2020. A final $3 million payment is due by June 30, 2021.

City officials were concerned that efforts to compensate truckers and suppliers of Benson power for lost income would cause changes to the City of Benson’s legislation affecting the payment amounts or timing of the payments.

Suppliers and trucking firms point out that they made significant capital investments to serve Benson Power’s need for turkey litter and woodchips, the biomass combination that fuels the 55-megawatt power plant. Those investments were made based on a Power Purchase Agreement Xcel Energy signed with Benson Power that guaranteed it would buy its electricity until 2028.

Xcel had argued that buying the biomass-generated electricity was costing its customers hundreds of millions of dollars more than power generated from wind, solar and other sources of power. If it could get out of the Power Purchase Agreement, millions in savings would be realized by its customers, it told legislators.

In Benson’s case, Xcel expects to save a net $345 million over the next 11 years for its ratepayers. That savings comes after it pays $106 million to buy the plant from its East Coast insurance company owners, pay the City of Benson area community more than $22 million, and pay millions to demolish the plant returning the site to a bare lot.

Part of the payment to Benson includes paying annual real estate taxes of more than $765,000 to the city, District 777 and Swift County for two years after the power plant has been removed.

Agreeing with Xcel’s position, Minnesota’s 2017 Legislature cleared the path for Xcel to buy and shut down Benson Power by letting it end the Power Purchase Agreement (PPA). In an order issued in January, the Minnesota Public Utilities Commission (PUC) approved Xcel’s plans.

The PUC order stated: “The Commission hereby approves Xcel’s proposal to terminate the PPA with Benson Power, LLC, acquire the plant, and close the facility.”  It further says, “The Commission finds that the transaction to temporarily acquire the Benson facility is consistent with the public interest and otherwise meets the requirements of…” state statute.

An appeal by suppliers of goods and services to Benson Power for a delay in the closing was denied by the PUC in March.

Benson’s $20 million earmarked for future economic development efforts was given to help replace the tax base being lost, the 45 jobs leaving the community, and the $8 to $10 million in annual economic activity that power plant represents to the area.

The money for the payments to the city are coming from a special fund the Legislature set up back in 1994 when Xcel reached an agreement with the Native American tribe on Prairie Island for the storage of spent nuclear fuel casks. Millions of dollars flow in to the Renewable Development Fund (RDF) from Xcel’s customers as part of the deal and were dedicated to promoting renewable energy technology, stimulating research into renewable energy, and enhancing the infrastructure for delivering renewable energy.

Truckers, loggers and suppliers of Benson Power sought their own payments from the RDF during the 2018 legislative session.

District 17 Sen. Andrew Lang, R-Olivia, and District 17A Rep. Tim Miller, R-Prinsburg, sponsored legislation that would provide $40 million in payments. While Miller’s bill stalled in the House, Lang’s was approved in the Senate. Now it is part of the massive 900-plus-page omnibus energy and finance bill sitting on Democratic Gov. Mark Dayton’s desk.

There is a chance that Dayton could veto the bill because there are things in it he doesn’t like, City Manager Rob Wolfington told the Benson City Council at its meeting Monday night. However, he added, there a lot of good things in the bill Dayton supports. The governor has 14 days from Monday to sign the bill, veto it, or let it become law at the end of the period without his signature.

Whether the bill becomes law, or is vetoed, will not have an impact on the $20 million scheduled to come to Benson, Wolfington said....

 

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Pictured: Truckers, loggers and other suppliers of Benson Power, LLC, could be getting $40 million in compensation as Xcel Energy looks to shut down the biomass power plant.

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