Minnesota Power, a division of ALLETE Inc. (NYSE: ALE), said May 8 at the annual shareholders meeting that the utility is moving forward with new emissions controls for the coal-fired Boswell unit 4.
The region’s largest electric generating unit will undergo a major environmental retrofit that will reduce emissions while helping to ensure competitively-priced energy for decades to come, the company said. ALLETE Chairman, President and CEO Al Hodnik made the announcement.
“This capstone event of our six-year environmental control effort will transform Boswell 4, the workhorse of our generation fleet, so it continues to provide reliable, safe and affordable electric power to our customers,” Hodnik told ALLETE shareholders. “We can use cost-effective technology to greatly reduce emissions and keep our largest and newest base load plants operating for many more years. This will allow us to serve the growing energy needs of our customers economically and reliably, while meeting our environmental responsibilities.”
Boswell 4 is capable of producing 585 MW. Minnesota Power owns 80% of this unit with the balance owned by WPPI Energy. Minnesota Power’s portion of the project is estimated to be $350m-$400m over the next several years. WPPI Energy will pay the cost of its share of the project. Multi-emission reduction project plans and permit applications will be filed with federal and state regulators in June.
With requirements for a 90% mercury reduction on Boswell 4 by 2018 already in state statute, Minnesota Power has been analyzing a unit 4 retrofit as pending U.S. Environmental Protection Agency regulations affecting coal units across the nation are finalized. Technology choices, resource needs, economic projections, customer cost impacts and project execution were key factors in this assessment. The EPA’s issuance of the Mercury and Air Toxics Standards rule for mercury reduction in December 2011 was a key factor in the timing of Minnesota Power’s decision.
Over the past six years, Minnesota Power has invested about $350m to reduce emissions by about 70% overall on its system, with most of this investment applied to Boswell Unit 3, the company’s second largest generator. The Boswell 4 project will increase overall emission reduction to around 85%.
In conjunction with achieving greatly reduced emissions and increased operating efficiencies in its coal-fired fleet, Minnesota Power also is adding renewable energy to its portfolio. The company will meet future energy needs with a more diverse, lower-emitting power supply that lessens coal-fired generation to about 50% of its total resource base. This transition to significantly reshape Minnesota Power’s fleet is well underway and will be facilitated by the Boswell 3 and 4 reinvestments and through previously announced major additions of wind energy and hydro power.
A major environmental retrofit was recently completed on Boswell Unit 3, somewhat protecting it from near-term shutdown, said Minnesota Power in a Feb. 6 report to the Minnesota Public Utilities Commission on system resource planning. Minnesota Power said in that report that it continues to evaluate requirements to reduce emissions at Boswell Unit 4 and investment in environmental control technology at this facility is showing itself to be beneficial to Minnesota Power customers for the long-term planning period. Boswell Units 1-2 continue to be economic resources for Minnesota Power customers until extreme levels of environmental capital requirements are in place, the report added.