‘AHEAD OF THE CURVE’

Uncertainty surrounds new federal emissions rules, but some energy companies in the region were setting their own goals for controls and renewables before the current mandates and guidelines were in place

BY LISA GIBSON

Basin Electric Power Cooperative has invested about $1.6 billion in environmental controls for its power plants, with an additional $181 million per year spent on maintenance and operation of those controls. They reduce emissions of sulfur oxides, nitrogen oxides and regional haze from coal-fired power plants, as well as some natural gas plants. And some controls were put in place before regulations and guidelines were set for certain types of emissions, putting Basin “ahead of the curve,” says Steve Tomac, senior legislative representative for the cooperative.

Similarly, Montana-Dakota Utilities Co. controls sulfur dioxide, nitrogen oxides, haze, mercury and particulate matter at its power stations, reducing some pollutants by up to 90 percent, in excess of requirements and guidelines.

“Even though we’re required to put something in place for some controls, our plants have been controlling a number of these pollutants and emissions already,” says Abbie Krebsbach, environmental director for MDU.

MDU also is a participant in the Environmental Protection Agency’s voluntary Natural Gas STAR (Science To Achieve Results) Methane Challenge Program, which seeks to significantly reduce methane leaks from natural gas pipelines in the next five years. MDU’s plan includes reducing excavation damages and working closely with contractors and the North Dakota One Call system to make sure pipelines are marked.

Basin and MDU are among power providers overachieving when it comes to environmental sustainability. While emissions control is a large piece of the puzzle for the power industry, it’s complemented by the use of renewable resources.

Forward Thinking

In 2005, Basin’s members set forth a resolution to produce 10 percent of its energy from renewable resources by 2010. “It speaks to how forward-thinking our membership is,” says Mary Miller, vice president of communications and creative services for Basin. “That was far ahead of the curve. It was just our membership saying, ‘We want to move ahead with this. We think it makes sense.’

“We’ve far surpassed that,” Miller says, adding the co-op’s portfolio includes nearly 1,600 megawatts of renewable energy, mostly wind, accounting for just more than 23 percent of its capacity. Basin also produces about 44 megawatts using recovered heat from TransCanada’s Northern Border natural gas pipeline, which produces a tremendous amount of heat when pumping the natural gas through the system. “They’re about as green as you can get,” Tomac says of the heat recovery systems. “As long as the gas is flowing through the pipeline, these little units give us some local recovered energy that’s fed into the distribution system directly.”

MDU generates about 5 megawatts of energy from Northern Border Pipeline waste heat, Krebsbach says, in addition to about 160 megawatts, or 20 percent of the utility’s electricity, from wind.

“Wind is the key renewable resource here,” Krebsbach says. The typical capacity of wind turbines in North Dakota is about 40 percent, Tomac says. It doesn’t blow every day, he adds, pointing out that the coldest and hottest days of the year typically aren’t windy.

In just the past few years, wind/natural gas combination generation has become much more feasible and natural gas prices have come down while availability has gone up, Tomac says. “It’s a whole different environment than it was even two or three years ago for the development of a less-carbon world.”

Clean Power Plan

Perhaps the most well-known, and most controversial, recent development is the EPA’s Clean Power Plan. The rule has been finalized but is in litigation. The first panel of judges is expected to weigh in this month or next.

The plan, as written, would implement carbon pollutant reductions for the power industry in stages through 2030, ultimately reaching 32 percent reduction from 2005 levels. Nitrogen oxides will see a 72 percent reduction and sulfur dioxide pollutants will decrease by 90 percent, according to the EPA.

Basin and MDU are participating in the litigation against the CPP. Tomac says compliance with the rules as written would cost Basin $5 billion. “Since 1961, we have invested and spent just shy of $6 billion on our generating assets. What that means is, in the next 15 years, we would need to almost invest as much as we did in the last 55.”

Tomac and Krebsbach agree that compliance will mean reducing coalfired power plant operations. “You’re either going to be paying for some sort of emission credits … to continue to operate them, or, if those aren’t available, you’ll have to have curtailment of facilities,” Krebsbach says. Tomac likens it to a “double mortgage” — utilities will be forced not to use coal plants for their full intended lives, but will have to continue paying for them while investing in new technologies. Some of Basin’s coal assets have expected operational lives through 2060.

The EPA says on its website that the CPP is a “historic and important step in reducing carbon pollution from power plants that takes real action on climate change. Shaped by years of unprecedented outreach and public engagement, the final Clean Power Plan is fair, flexible and designed to strengthen the fast-growing trend toward cleaner and lower-polluting American energy.” The goals are strong, but achievable, it adds, putting the U.S. in a leading position to fight climate change. Another EPA rule in litigation would require new fossil-fuel power plants to capture and store carbon dioxide.

“I know every one of us is affected differently by the Clean Power Plan,”

Krebsbach says. “It just depends on your generation mix, the age of your plants, if you’re in the midst of being challenged with the decision of putting more controls on or not. A lot of different things factor in to it.”

Tomac says that while Basin wants to be as green and environmentally sustainable as possible, it’s important to be realistic about how long it will take to make the change. “I think most utilities, Basin included, believe that we’re going to have to operate in a more carbon-constrained world. Time and flexibility are really what we’re looking for as we try to move forward. We need enough time to make the adjustments, and we need enough flexibility to continue to use the useful life of facilities we have in place as we move forward.”