Hibbing is something of a rarity when it comes to electricity. Since 2021, most of the city’s power has been generated by burning wood chips and mulch — up to 9,000 tons a month — largely from a local pallet manufacturer. The plant allows the small municipal utility to support northeastern Minnesota’s logging industry and also avoid buying electricity from large for-profit companies.
“The independence of the city is something that is very important to our ratepayers and that’s why we have the lowest cost of energy of anybody in the area,” said Luke Peterson, general manager of Hibbing Public Utilities.
And because state law counts biomass as renewable energy, Hibbing has likely already met a newly updated goal for 55% renewable electricity more than a decade before a 2035 deadline.
But the plant, and the city, is now in limbo. A landmark climate law passed in February by Democrats who control the Minnesota Legislature requires electric utilities to be 100% carbon-free by 2040. And the regulations do not say whether a renewable wood-burning plant will be considered carbon-free.
It’s a conundrum that could force Hibbing to find new power sources. It also illustrates how smaller utilities in Minnesota are grappling with the carbon-free standard, which has been a fierce point of political debate at the Capitol.
While large, investor-owned utilities like Xcel Energy that serve big cities are often the main focus of attention in the shift away from fossil fuels, cooperative and municipal utilities will need to hit carbon goals, too.
[image_credit]Courtesy of Hibbing Public Utilities[/image_credit][image_caption]Since 2021, most of the Hibbing’s power has been generated by burning wood chips and mulch — up to 9,000 tons a month — largely from a local pallet manufacturer.[/image_caption]
Political debate arises over smaller utilities
Democratic lawmakers tried for years to pass a bill steering electric utilities toward a 100% carbon-free grid, arguing it is crucial to prevent the worst impacts of climate change.
After winning full control of Minnesota’s government in the 2022 elections, they wasted little time in making that dream a reality. Despite cries from Republicans that DFLers were moving too fast, the House and Senate approved the measure two weeks after its first hearing.
While large, for-profit utilities like Xcel Energy and Minnesota Power generate and distribute much of the state’s electricity, 1.7 million Minnesotans are served by nonprofit electric cooperatives and another roughly 391,000 are served by municipal utilities.
Under the law, smaller utilities will need to be 60% carbon-free by 2030, 90% by 2035 and then 100% in 2040. The bill does include “off ramps,” which allow a utility to ask the state’s five-member Public Utilities Commission to let it break standards if it can’t meet those benchmarks without risking affordability or grid reliability. Electric utilities also can buy energy credits to offset their use of carbon-emitting power.
There are more than 120 municipal electric utilities in the state — from Ada to Worthington — serving primarily cities in Greater Minnesota. Many have joined together with other city utilities in bigger electric systems known as “power agencies.”
As lawmakers debated the 100% bill, Republicans questioned whether the state should move ahead if cooperative and municipal utilities had issues with the bill.
[image_credit]REUTERS/Nicole Neri[/image_credit][image_caption]Gov. Tim Walz[/image_caption]
Four days later, Kent Sulum, director of government relations and senior counsel for the Minnesota Municipal Utilities Association, testified at a Senate hearing that the organization wasn’t opposed to the concept of the bill. But he said municipal utilities had “serious concerns” about the feasibility of reaching 100% carbon-free energy.
“Some of the initial studies show 80% is a doable figure,” Sulum said. “After that, things get very murky and very expensive.”
Sulum said many city utilities only generate power in times of emergency or to pump extra power into the regional grid when demand is high. But under the new law, Sulum said those utilities would have to buy credits or clean power that will be “greatly expensive” for small communities.
“The cost is higher,” Sulum told MinnPost. “You don’t have shareholders to pass it along to.”
Backup diesel is one question
One of those small utilities is in Princeton, home of Republican Sen. Andrew Mathews, who said during the Senate floor debate before the bill passed that Xcel Energy is the “least likely entity” to ask the PUC for an “off ramp” exception. The large utility already has a huge source of carbon-free nuclear power, for instance, when new nuclear is off limits to others because of a moratorium in Minnesota.
Keith Butcher, the general manager of Princeton Public Utilities, said the city gets electricity through the 18-member Southern Minnesota Municipal Power Agency, which in 2020 announced it planned to be 80% carbon-free by 2030.
But Princeton also has roughly 12 megawatts of diesel power. The newest generator was designed as a marine engine for use on a cruise ship, Butcher said.
[image_credit]Senate Media Services screen shot[/image_credit][image_caption]State Sen. Andrew Mathews said during the Senate floor debate that Xcel Energy is the “least likely entity” to ask the PUC for an “off ramp” exception.[/image_caption]
Now, however, the diesel is mainly for periods of high demand, when the regional grid operator Midcontinent Independent System Operator — known as MISO — asks for help keeping up energy supply across its interconnected market.
Butcher said Princeton ran diesel during two polar vortexes in recent years. In one, the diesel generators operated for more than 30 hours straight. He said diesel and other similar fossil fuel production may be a small percentage of electricity produced, but in times of extreme cold or heat when the grid needs support, they’re really important for “broader, societal” grid stability.
Are there alternatives to diesel?
Perhaps. Yet Butcher said there are downsides to other options, like a lack of available hydro or the intermittent nature of wind and solar, especially in extreme weather. “If you’re saying you want us to be 100% (carbon-free) at 3 a.m. on Jan. 21 when the temperature is -21 degrees out, I don’t know how to do that,” Butcher said.
Two utilities are far ahead of climate goals
There are municipal utilities, however, that are close to 100% carbon-free energy, or believe they are already in compliance with the state’s 2040 goal.
That includes Moorhead and Detroit Lakes, which are in the district of DFL Sen. Rob Kupec. During the same Senate floor debate, Kupec used the cities as examples of why he would vote for the bill. “This is doable,” he said.
Moorhead Public Service gets about 53% of its electric power, most of it directly from hydro through dams on the Missouri River, a resource not broadly available across the state. Their allocation comes from a federal wholesaler called the Western Area Power Administration.
The rest of the city’s electricity mix is provided by the power agency Missouri River Energy Services, which also has some carbon-free electricity. In total, the electric power supply for Moorhead Public Service is about 85% carbon-free.
[image_credit]Senate Media Services screen shot[/image_credit][image_caption]State Sen. Rob Kupec, during the same Senate floor debate: “This is doable.”[/image_caption]
Detroit Lakes has a power supply that is 80% carbon-free, said utilities general manager Vernell Roberts. That’s also thanks in part to a large allocation of hydropower from the Missouri River. “We value that WAPA allocation dearly,” Roberts said.
Both Moorhead and Detroit Lakes also have a large share of power from what they describe as “market purchases.” Those purchases include fossil fuels, but the emissions count only against the seller, not the buyer, the officials said, so in their view the cities can deem the electricity as carbon-neutral.
The legislation does factor in the level of carbon emissions in purchases from MISO, however.
Still, Roberts and Schmidt had concerns about the 100% standard. Schmidt said he worries the price of energy credits will rise dramatically as demand for them grows because of the climate law.
But, like Butcher from Princeton, Schmidt said he worried generally about the stability of the whole grid as large plants that generate consistent energy from coal and natural gas are retired.
Detroit Lakes even published a letter urging lawmakers to slow down and rethink the 100% bill as it moved through the Legislature. Roberts said he believes the grid can get to between 80-90% carbon-free energy with new wind, solar and energy storage resources.
But he said storage projects could take a tremendous amount of time. For instance, he said Missouri River Energy Services has proposed pumping water uphill using renewable power like solar and wind to store it for release during periods of high electricity demand, an idea Roberts said could take up to 20 years to get permitted and built.
Roberts also said he’s concerned the market won’t build wind and solar, or transmission lines to carry it, fast enough to meet demand given retiring fossil fuel plants and higher demand from things like electric vehicles and heat pumps.
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Hibbing in limbo, hoping for clarity
Hibbing is not part of a power agency, but instead runs independently. Peterson, the utility’s general manager, said city residents like the multiple benefits the biomass plant can bring.
For instance, Hibbing is not as connected to larger electric markets that can spike prices during events like a polar vortex. The city first opened the wood-burning plant in 2007 as part of a deal with Xcel Energy for storing nuclear waste in the state. But it was idled for three years because Xcel, which bought power from the Hibbing plant, said the electricity was too expensive.
The city re-started operations for its own customers in 2021, after an extreme cold snap led to higher gas prices. In addition to its electricity output, the plant produces heat for about 1,000 customers. Most of that heat is used by hospitals, schools and large public buildings.
Peterson said Hibbing is also free from the profit-driven model of other utilities and can bring value to the region through buying wood waste. He said some movement toward 100% carbon-free energy “is better than none.” But Peterson, too, had gripes about the bill, which he said was more geared toward those larger utilities that can build infrastructure and recoup costs from ratepayers. He also said lawmakers didn’t take a closer look at the upside of systems like in Hibbing. And Peterson argued other countries, like Finland, have relied heavily on biomass to reach its climate goals.
But the biggest question mark for Hibbing is whether their biomass will ultimately be considered carbon-free or carbon-neutral.
House Majority Leader Jamie Long, a DFLer from Minneapolis who was prime sponsor of the 100% bill in the House, said lawmakers intentionally did not weigh in on whether a wood burning plant should be considered carbon-free.
He wanted to give the PUC flexibility to determine what meets the climate standards since the commission regulates the electric sector in Minnesota and has expertise on the matter. The law can give a utility partial credit for carbon-free power, however, meaning if the PUC decided a technology was 95% carbon-free, that utility would need to offset less through buying energy credits.
Asked if he considered the Hibbing plant to be carbon-free, Long said: “That’s an important question for the Public Utilities Commission.”
“I think that it would probably be something that would depend on the source material and how it’s produced,” Long said. “You do have carbon coming out at the end from burning wood. So it would be a question of whether or not a utility wants to make an argument that there is a sink on the other side and that is therefore a carbon-reducing or carbon-free technology.”
Peterson, meanwhile, said he hopes legislators tweak the law. “I’m trusting our state policymakers to make clear that biomass is net-zero,” he said.
You have to have base power to run when the sun don’t shine and wind don’t blow. They could have converted coal plants to cleaner, reliable natural gas. Instead they want to put expensive battery back up stations. Do those kids in Africa know they will have to work even harder?
We will see business leave or chose to expand out of state. Our power will be expensive and unreliable.
The DFL voted for a utopian dream that will be expensive and unreliable. When XCEL can’t meet that goal, they will need to pay for indulgences(carbon credits) giving money to progressive energy groups. That’s the real scam.
Minnesota will lose at least one representative, maybe two, when the next census comes along.
not so fast, Andy. This bill has deliberate off-ramps (Frentz’s terms) for small energy generators to craft their way to this goal. Princeton and others see this as a threat to their energy producers but I see it as a positive way forward. There’s lots of wiggle room it is and in the words of one Senator, it’s “doable.” Let’s get it done, Minnesota. We’re going to look back at this moment as truly historic in the pursuit of non-fossil-fuel energy sources.
Julie, unfortunately the off-ramp language is not specific and therefore does not give the Minnesota Public Utilities Commission (PUC) the necessary direction to determine what are significant impacts to energy costs and reliability. Just a couple of months ago in December, MISO posted an emergency alert regarding a possible grid imbalance that may result in utilities being required to take immediate action and shed load. This is something that I have never seen before. I am therefore concerned that the legislature didn’t do the hard work to define “significant”. We need to recognize that this is a long-term issue and that PUC membership changes as power flips back and forth between the parties. Whatever the PUC decides at some future date will be viewed as partisan by those that disagree with it. Ultimately, to protect the integrity of the PUC, I believe the PUC should enforce state policy, not define it.
The concerns raised here are not just because it is viewed as a “threat to their energy producers.” We are truly concerned about reliability especially during extreme weather events. As a utility we make resource acquisition decisions based on cost, reliability, and risk. Many of those of us mentioned in this article are the ones that make sure the lights are on whenever a customer wants it. We are not lawyers and accountants that simply talk about annual averages on paper. Many of us are lineworkers, operators, managers, and engineers that work on making the system work every second of every day. A common rebuttal that I hear is that a utility can simply buy renewable energy credits (RECs). That can work when the goal is 50%, 60%, even 90%. But 100% is an absolute number. It is both a floor and a ceiling because electricity supply must meet demand at all times. One cannot generate excess energy in the summer and sell it in the winter. Any RECs would have to come from other states or other industries. This strategy therefore means that utilities will not 100% carbon free, they are simply subsidizing other ratepayers or other industries through accounting offsets. I just don’t see how raising electricity prices to fund carbon reduction in other industries is equitable.
Of course, it is vitally important for us to address the climate change issue and the electric industry has done a lot — and we are doing more. Minnesota municipal utilities can be a part of the solution and do our share, but we can’t solve this world-wide problem on our own. Creating such an absolute and non-negotiable 100% requirement on just one sector of the economy feels arbitrary and capricious. In fact it could also become counter-productive if reliability and affordability are jeopardized and customers (at least those that can afford it) resort to their own back-up generation using gasoline, diesel, propane, or natural gas. Those resources are not carbon-free and they are not regulated like electric utilities.
This is a complicated issue and one that deserves a deliberative and thoughtful approach. We shouldn’t be afraid of giving the topic the time needed to adequately address these real world impacts.
Yes, expect businesses to leave the state for many related reasons. 3M is laying off many and when they weigh the impact the state government’s over-reaction to PFAS, may decide to leave and change their name to “Xstate”MM. The DFL has already made it clear they don’t want any mining in MN.
This is the game that environmental advocates play (note that I said “advocates”, not necessarily “scientists”, although they want us to believe it is all science-based). They have a distant, philosophically based end-point goal in mind and wear blinders with respect to anything that deviates from a straight line process to that goal – regardless of whether it is really best for the environment, and certainly not whether it is best for people. They may point to the latest “study” that supports their goal, suggesting it is the “best” science, but not recognizing that science is a iterative process, with repeated “studies” and real experiments necessary to show that what they advocate really is the best, most complete science, and that it does the least harm to people and the environment.
Expect that, at some point, they will realize that we, as living, breathing, biological organism, emit CO2 continuously – day and night; and, therefore, demand that by 20XX we will all need to wear carbon-trapping face masks.
“Those purchases include fossil fuels, but the emissions count only against the seller, not the buyer, the officials said, so the cities can deem the electricity as carbon-neutral.”
Huh? So you can buy dirty power, but claim it is as green as a field in mid-June?
Seems like there is an opportunity for someone to build a huge coal plant and sell the power to all these small municipalities. Everyone wins. The coal plant makes money, the rate payers get cheap juice and the city managers can pretend they are saving the Earth.
Yes, it’s called carbon credits, and you can buy them to feel better about dumping all the CO2 in the atmosphere when you feel guilty about flying in a jet to your vacation in Hawaii.
Hibbing has no chance of getting a wood burning power plant included in green renewable energy. Lefties in Mpls would never allow a small town to run their PUC the way they see fit. Hibbing had steam heat from PUC, I remember seeing alleyways with no snow and fog rising in the middle of winter from steam lines a couple feet under ground.
good reporting here…way to go, Walker!
Slow train wreck. Hard not to watch.
Biomass gives off carbon and methane and could take 100 years to remove the carbon from the atmosphere, so not carbon free and not renewable–in the timeframe we have to stop/slow the effects of climate change. “Overall, for each kilowatt hour of heat or electricity produced, using wood initially is likely to add two to three times as much carbon to the air as using fossil fuels.” “But when Drax’s boilers burn wood, they release 15% to 20% more carbon dioxide than when they burn coal, Climate Central’s analysis found — amounting to millions of tons of CO2 per year for what people are calling a “renewable” power source. Even Bill McKibben of 350.org says biomass is a bad idea–“If you burn a tree, you put a lot of carbon into the atmosphere right away, trapping heat at precisely the moment that we desperately need to be cooling the earth.” For more context and sources of these quotes see the numbered points below. I also note that there are no air quality monitors in Hibbing, MN from the MPCA, World AQI Map or the Purple Air Map. That’s interesting.
Here is a really cogent, 1.5 min video from Fern.org: What is bioenergy? A global problem: https://youtu.be/mRAGzdOqNas A few resources for you below….
1) Below is from 2021: https://www.commondreams.org/news/2021/02/12/500-scientists-demand-stop-tree-burning-climate-solution
The destruction of forests, which are a carbon sink, creates a “carbon debt.” And though regrowing “trees and displacement of fossil fuels may eventually pay off this carbon debt,” the signatories say that “regrowth takes time the world does not have to solve climate change.”
“Trees are more valuable alive than dead both for climate and for biodiversity.”–Letter from 500+ Scientists What’s more, burning trees is “carbon-inefficient,” they say. “Overall, for each kilowatt hour of heat or electricity produced, using wood initially is likely to add two to three times as much carbon to the air as using fossil fuels.”
Another issue is that efforts using taxpayer money to sustain biomass burning stymies what are truly renewable energy policies.
“Government subsidies for burning wood create a double climate problem because this false solution is replacing real carbon reductions,” the letter states. “Companies are shifting fossil energy use to wood, which increases warming, as a substitute for shifting to solar and wind, which would truly decrease warming.”
2) Below is from 2015: https://burningissues.org/car-www/science/Climate/Europe's%20biggest%20source%20of%20'renewable'%20energy%20is%20trees%20-%20Tech%20Insider.html
Climate Central looked specifically at Drax Power Station in England, which is the largest power plant switching from coal to wood in Europe. But when Drax’s boilers burn wood, they release 15% to 20% more carbon dioxide than when they burn coal, Climate Central’s analysis found — amounting to millions of tons of CO2 per year for what people are calling a “renewable” power source. The theory is that planting more trees can capture the carbon that’s released when trees are
burnt and cut down for biomass. But the problem is that takes a lot longer than current EU definitions assume for that process to actually come full circle. A report from the Natural Resources Defense Council says it could take up to a century to repay the carbon debt that’s released when trees are burned for electricity.
And that’s if new trees are planted to replace the ones that were cut down. So while wood biomass is technically renewable, it’s not on a scale that’s fast enough to make up for the pollution burning it causes in the short term.
3) Below from 2021: https://news.mongabay.com/2021/02/500-experts-call-on-worlds-nations-to-not-burn-forests-to-make-energy/
• Last week, more than 500 top scientists and economists issued a letter to leaders in the US, EU, Japan, South Korea, and the UK, urging them to stop harvesting and burning forests as a means of making energy in converted coal burning power plants.
• The burning of forest biomass to produce electricity has boomed due to this power source having been tolerated as carbon neutral by the United Nations, which enables nations to burn forest biomass instead of coal and not count the emissions in helping them meet their Paris Climate Agreement carbon reduction targets.
• However, current science says that burning forest biomass is dirtier than burning coal, and that one of the best ways to curb climate change and sequester carbon is to allow forests to keep growing. The EU and UK carbon neutrality designations for forest biomass are erroneous, say the 500 experts who urge a shift in global policy:
• “Governments must end subsidies… for the burning of wood…. The European Union needs to stop treating the burning of biomass as carbon neutral…. Japan needs to stop subsidizing power plants to burn wood. And the United States needs to avoid treating biomass as carbon neutral or low carbon,” says the letter.
However, “We urge you not to undermine both climate goals and the world’s biodiversity by shifting from burning fossil fuels to burning trees to generate energy.”
In the EU alone, nearly 60% of renewable energy already comes from forest biomass, amounting to millions of metric tons of wood pellets burned annually. The United Kingdom, The Netherlands and Denmark are among the leading consumers of biomass for energy and heat, while Japan and South Korea are now converting coal-fired power plants to burn wood pellets.
Under the EU’s second Renewable Energy Directive (REDII) — tolerated by the United Nations under the Paris Climate Agreement — emissions from burning forest biomass are not counted at all. This significant carbon accounting loophole underreports emissions data at a time when global temperatures are rising fast, causing accelerating drought, devastating storms, destructive wildfires and sea-level rise nearly everywhere on earth.
4) Below from 2016: https://grist.org/climate-energy/burning-trees-for-electricity-is-a-bad-idea/ By Bill McKibben founder of http://www.350.org
The latest of these sad sagas involves burning trees for electricity. Sometime before the end of the year, the U.S. Senate may vote to force the EPA to count industrial biomass operations as, by definition, carbon-neutral: that is, the government would be forced to conclude that an industrial-sized wood-fired power plant is just like a solar panel or a wind turbine, a way to generate electricity without contributing to climate change.
The theory is, if you cut down a tree and burn it, another will grow in its place, and it will soak up the carbon you just burned. Voilà, no impact. When I first heard it, it sounded great to me (especially since I’ve spent much of my life getting up during the night to stoke the woodstove).
The trouble with the theory is, it turns out to be wrong, at least relative to the crisis we face. If you burn a tree, you put a lot of carbon into the atmosphere right away, trapping heat at precisely the moment that we desperately need to be cooling the earth. A slowly growing new tree won’t suck it all back up until after we’ve broken the back of the climate. And it turns out that wood is remarkably inefficient, even compared to coal: It’s a serious pulse of carbon you’re pushing into the air.
Wood Chips…they provide heat to downtown St. Paul deal is provided by District Heating. i bet they have a plan for dealing with how they define “wood chips.”
I was in the Legislature in “07-’08 when we passed our first Renewable Energy Standard, the strongest in the country at that time. We had huge apprehension on how and if it would work out so besides excluding Coops we wrote “off ramps ” for our four public utilities. It turned out that they were all able to comply, Xcel did it three years earlier that required.
BUT that was at the beginning of the process to reduce and eliminate emissions. This new legislation is for reaching the endpoint, a 100 reduction. It’s going to be much, much harder, I think, than most people understand. Lots of things are going to go wrong. I think when we hit 30%-50% electrified transportation, we are going to run into all kinds of resource, generation and transmission limitations, and consumer backlash, all of which will undermine public support. The same thing will happen as we try to electrify homes and commercial buildings, especially heating systems.
I have reluctantly come to the conclusion that we are going to need natural gas longer and more of it that many climate change advocates will like. We should recognize that now and work on eliminating the emission of natural gas during it’s transmission and mining, where the real problems are. I think we should focus more on hybrid cars and less on EVs. So much of this is tough calls and we need sound judgement and not pie-in-the-sky rhetoric.