N.D. PSC votes to let Xcel shut down Benson Power

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North Dakota’s Public Service Commission  voted unanimously June 27 to approve Xcel Energy’s plan to purchase and shut down  Benson Power, LLC.

Xcel notified the City of Benson last Friday that financial closure of the deal with Benson Power’s East Coast insurance company investor owners had taken place, City Manager Rob Wolfington said.

Based in downtown Minneapolis, Xcel Energy has a single subsidiary for its electrical and gas businesses in North Dakota and Minnesota.  As that two-state subsidiary, Northern States Power Company (NSP) was the entity that petitioned the PSC for relief from the agreements governing the future of Benson Power.

The question before the North Dakota PSC was, “Is NSP’s proposal to terminate its biomass power purchase agreement with Benson Power, LLC, acquire the Benson facility and subsequently close the facility prudent?”

Loggers and suppliers of Benson Power had appealed to the PSC as their last hope of preventing the closure of the 55-megawatt power plant that burns turkey litter and wood chips.

“When I first tackled the first big binder of information on this case, I was firmly believing that I was not going to vote for this thing,” PSC Chair Randy Christmann said at the June 27 hearing. “Because why should North Dakota consumers spend almost the next decade paying additional money for something that is not used and useful, that is not even going to be in existence anymore? That just goes against my grain.

“But as I got into that information, I realized that the cost to consumers for using these projects was so high – I was shocked! But it is an example of what happens when legislators, or regulators, abandon the concept of long-term, low cost, and instead ensnare utility companies into social engineering, or economic development schemes. What happens is that the politicians get huge headlines and the consumers get huge electric bills.

“I am sad that the cost to consumers for this life vest is as high as it is, but I am pleased to help NSP customers flee these sinking ships,” Christmann said.

May 4 the North Dakota PSC received written testimony from Red Willow Management on behalf of Benson Power, LLC, suppliers and haulers, and written comments and a request for hearing from Associated Contract Loggers and Truckers of Minnesota.

The submitted written testimony was deemed to be not relevant to the North Dakota commission, that they were proceedings related to Minnesota and the impacts were associated with Minnesota and did not represent North Dakota ratepayers interests as a result of that, PSC Member Brian Kroshus said.

The construction of state-supported biomass power plants in Minnesota represent an intrusion into the power markets that didn’t benefit ratepayers, he said.

“It is an example of too many influencers that are driving the market more than the market just operating openly and deciding what the least cost resource might be,” he said. “That is really apparent here because these biomass production facilities have not been deemed economical and not beneficial to ratepayers.”

Closing down the biomass plant in Benson, along with ending biomass use at the Laurentian Energy Authority plant serving Hibbing and Virginia and at the Pine Bend facility, will save North Dakota ratepayers $24.1 million, he said.

“Sometimes you look back and think how can you actually buy a facility and then just shut it down? I think this underscores that they weren’t terribly efficient to begin with,” Kroshus said.

The City of Benson is being paid $20 million over four years for the closure and demolition of the plant. Those payments are intended for economic development to replace the jobs lost at Benson Power, the loss of the real estate taxes it paid, and the loss of the economic energy the facility brought to the area....

 

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