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Minnesota Utility Co-op Rejects 10-Year Coal Agreement

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  • Sep 6, 2021 5:30 am GMT
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Fossils Use Resource Adequacy Concerns to Delay Grid Decarbonization

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Minnesota’s largest collective cooperative utility wants to cancel its membership with its main electrical supplier in “a clash over costs and carbon” that is revealing divides in how community energy groups see the role of coal. 

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“The issues being raised by Connexus are indicative of an emerging clash among electric cooperatives, as some co-ops want to see a swift transition to clean energy, while many others are skeptical about the wisdom of a shift away from fossil fuels,” reports Inside Climate News.

Connexus Energy stood alone among 28 co-ops served by Great River Energy when it voted to close, rather than sell, North Dakota’s Coal Creek Station. Great River had initially aimed to close the plant following years of financial losses and high operating costs. However, pressure from North Dakota officials to preserve jobs—along with a plan to retrofit the plant with carbon capture technology—persuaded Great River to sell the plant instead.

The agreement would bind members of the co-op to continue purchasing power from the coal plant for the next 10 years. 

Following the vote, the Connexus board of directors wrote to its members to explain that they opposed the sale “because Great River was backsliding in its efforts to reduce emissions and because the sale of the plant was a worse deal financially than what Great River had previously estimated as the cost of closing the plant,” reports Inside Climate.

Connexus now wants to withdraw its membership “because of long-standing concerns about high electricity prices from Great River and a restrictive contract that limits Connexus’ ability to buy its own renewable energy.” The utility has tried to develop renewable energy projects to lower prices for its consumers, but it is limited to sourcing no more than 5% of its energy from its own purchases under its contract with Great River. 

The contract between the two companies runs until 2045, and both parties need to agree to any changes in their relationship. Connexus says it doesn’t want to cut ties altogether and intends to continue working with Great River as a customer. 

Connexus is not the only utility finding itself out of sync with cooperatives as it tries to procure power from alternative sources: two members of a Colorado co-op recently withdrew their membership for similar reasons.

“Tensions over the pace of the energy transition are increasingly common as some electric cooperatives, mainly in suburban areas, are seeking more control, often as part of a push to embrace the transition to clean energy,” writes Inside Climate.

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