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Wisconsin approves Nemadji Trail gas-fired power plant

Wisconsin regulators on Jan. 16 verbally approved the proposed 625-MW Nemadji Trail Energy Center but said the final written order would contain conditions meant to mitigate the project's environmental impact.

The Wisconsin Public Service Commission voted 2-1 to grant a certificate of public convenience and necessity, or CPCN, for the combined-cycle, natural gas plant proposed to be built in Superior, Wis., by ALLETE Inc. subsidiary South Shore Energy and Dairyland Power Cooperative. South Shore Energy, formed to own ALLETE's portion of the project, and Dairyland will share ownership of the plant, which is slated to come online in 2025.

Explaining his decision to grant the CPCN, Commissioner Mike Huebsch said the facility's environmental impact would not be "undue" or "disqualifying."

"The value of the energy provided by this plant, the economic impact to the neighboring communities, individual workers and their families, as well as the conditions that we have the authority to compel upon this project to help mitigate the concerns raised by opponents, make the Nemadji Trail Energy Center worthy of approval," Huebsch said.

Commission Chairperson Rebecca Cameron Valcq disagreed, however. Even though a diverse mix of energy resources is needed to ensure reliability, she said, the record did not support issuing a CPCN for the facility.

"When I look at it through the public interest determination, and I couple that with the environmental concerns related to slope erosion, groundwater, stormwater impact, secondary wetland impacts and all of the other things that are under our purview, I don't think we should grant a CPCN," the chairperson said.

Along with backing the plant, the commission also approved a 3.7-mile, 345-kV line to connect the project to the American Transmission Company LLC system.

Written decisions on the power plant (Wisconsin PSC docket 9698-CE-100) and the tie line (Wisconsin PSC Docket No. 9698-CE-101) are expected to be issued at a later date.

The plant will be run as a merchant facility. Dairyland will sell electric power generated by the project at market-based rates to investor-owned utilities, cooperatives, power marketers and others for resale in Wisconsin and the region, Huebsch said.

ALLETE subsidiary Minnesota Power Inc. will buy about half of the plant's capacity through agreements with South Shore Energy.

The project still needs regulatory approvals and permits from the City of Superior, the Wisconsin Department of Natural Resources and the U.S. Army Corps of Engineers.

Dairyland, which provides wholesale power for 41 distribution cooperatives and municipal utilities in Minnesota, Wisconsin, Iowa and Illinois, said the plant will play an important role in supporting renewable energy resources.

"Because of its ability to provide reliable back-up to intermittent sources of power, Nemadji Trail is a critical part of our resource diversification strategy," Rob Palmberg, Daiyland's vice president, external and member relations, said in a statement.

But others disagree.

Matt Earley with the Sierra Club said in a statement that building the plant would be "an environmental and economic disaster." He added that the group would continue to fight the plant.

Minn. court says regulators should consider environmental review

Meanwhile, the Minnesota Court of Appeals overturned a decision by utility regulators in that state to approve Minnesota Power's role in the plant. The court, in a ruling issued Dec. 23, 2019, said the Minnesota Public Utilities Commission needs to consider the environmental effects of the facility.

The commission in 2018 approved a plan for the utility to construct, operate and purchase about half of the plant's capacity through agreements with affiliate South Shore Energy.

In its decision, the commission denied a petition for an environmental assessment worksheet, or EAW, for the project, finding that the Minnesota Environmental Policy Act does not apply to the affiliated-interest agreements and that it lacked jurisdiction to order an environmental review for a power plant in Wisconsin.

But the court said the act does apply to the affiliated-interest agreements and that the commission can order an environmental review for a project located outside of Minnesota.

"The commission's express authority to regulate construction of power plants in Minnesota, and to order environmental review before approving their construction, does not negate its authority to approve or reject Minnesota Power's agreements with its Wisconsin affiliate regarding the construction, operation, and output of [the Nemadji Trail Energy Center]," the court said. "Nor does it negate the commission's authority to order an EAW to inform that decision."

The court said the commission needs to determine whether the plant "may have potential for significant environmental effects," and, if so, to prepare an environmental review before reconsidering the affiliated-interest agreements.