FF plant likely open until 2020 [UPDATED]Published 12:36pm Thursday, October 4, 2012 Updated 12:36pm Thursday, October 4, 2012
Producing about 20 percent of the energy used by Otter Tail Power customers, the coal-fired power plant on Hoot Lake will likely remain open until 2020 before the transition to natural gas.
“As it looks today, natural gas will be a plentiful resource at a reasonable price,” said resource planning manager Brian Draxten. “While we have added a lot of wind for heat generation, we rely pretty heavily on coal. Natural gas will help us become more diversified in our heat generation. It also helps to stop and start generation more quickly.”
Otter Tail Power filed a Baseload Diversification Study Wednesday morning, and while three scenarios are being considered, the company has recommended “Scenario 2020,” said public relations director Cris Oehler.
This plan would require $10 million in equipment to be added to the Hoot Lake plant to meet upcoming mercury and air toxics standards by 2015. In 2020, the Hoot Lake plant would be replaced by a $226 million natural gas plant, said Draxten.
The other two scenarios in consideration are “Scenario 2015” and “Scenario 2040.” In Scenario 2015, the Hoot Lake plant would be retired, and the $226 million switch to natural gas would be made in 2015 to avoid the costs of complying with mercury and air toxics standards. Scenario 2040 would involve refurbishing the Hoot Lake plant for $125 million to continue operations for the foreseeable future, and no transition to natural gas would be made until at least 2040, said Otter Tail Power representatives.
There are 42 employed at the Hoot Lake plant, and a natural gas plant would take about half as many workers to operate. Draxten said it would be easier on employees if the transition would happen in 2020 rather than 2015.
There are other advantages to allowing for five more years before the change is made as well. Otter Tail Power already has to spend $490 million in 2015 to upgrade a coal-fired plant in Big Stone, South Dakota. Delaying the transition until 2020 would prevent a quick spike in energy costs for customers, Draxten said.
The 2020 Scenario would bring about a 30 percent rate increase by about 2021, said Draxten.
The location and resources at the Hoot Lake plant would make the site a strong consideration for a future natural gas plant, said supply engineering manager Bill Swanson.
Some environmentalist groups claim the company should shut down the Hoot Lake plant as soon as possible.
Sierra Club Beyond Coal Organizing Representative Jessica Tatro said in a news release, “Otter Tail Power’s proposal to spend millions on dirty fossil fuels completely misses the mark. We need to take this opportunity to diversify our energy mix and to expand investments in renewable energy technologies that can provide power and jobs without the dangerous and harmful effects of burning fossil fuels like coal.”
Draxten said this is not the case. The Hoot Lake plant meets all regulations set by the environmental protection agency, and it is ahead of pace to meet the requirements that will be in place in 2015.
There will be a public comment period in the coming months, and Otter Tail Power representatives hope the three state regulatory bodies in Minnesota, North Dakota and South Dakota will approve Scenario 2020 by the first quarter of 2013.