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Bismarck company buys North Dakota coal-fired power plant

June 30, 2021 GMT

BISMARCK, N.D. (AP) — A Bismarck energy marketer that sells wholesale electric power announced Wednesday it will purchase North Dakota’s largest coal-fired power plant from a Minnesota company that had intended to close it if a buyer could not be found.

Rainbow Energy Center LLC said it reached an agreement to acquire the Coal Creek Station in west-central North Dakota from Maple Grove, Minnesota-based Great River Energy. The acquisition also includes the purchase of associated transmission lines that run from central North Dakota to Minnesota by Nexus Line LLC, an affiliate of Rainbow Energy.

Terms of the deal were not disclosed.

North Dakota’s Legislature this year passed a sheaf of pro-coal measures that include loans, grants and millions of dollars in tax breaks, though it is unclear how those may be utilized.

“We have not received any money from the state,” Rainbow Energy President Stacy Tschider said on a conference call. “We have the capital to fulfill the closure of this deal later this year.”

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Great River Energy announced last year it would close the power plant near Underwood and replace most of its energy with new wind farms in Minnesota. The company said at the time the facility would be shuttered in the second half of 2022. The plant that has operated for more than 40 years employs 260 workers.

Great River said the decision to close the plant was driven by economics. The company also said it would convert its Spiritwood Station plant near Jamestown from lignite coal to natural gas, moves that would mean its power will be 95% free of carbon dioxide blamed for global warming.

Great River supplies electricity to 28 rural Minnesota cooperatives, serving about 1.7 million people. The 1,150-megawatt plant will be replaced by a similar amount of wind energy by the end of 2023, after a $1.2 billion investment, the company said.

Rainbow Energy buys surplus power from utilities and resells the electricity to other companies. It previously did not own electric wires, power stations or other utility infrastructure.

Rainbow is a subsidiary of Bismarck-based United Energy Corp, which also is involved in oil and gas production and exploration.

Rainbow Energy said in a statement it is “uniquely positioned to actively pursue customers that purchase power on the open market, which includes power purchased by Great River Energy.”

Great River CEO David Saggau said in a statement that “purchasing energy and capacity from Rainbow was not in our original plan, but it will serve as a reliable steppingstone in our power supply transition.”

Closure of Coal Creek also threatened North American Coal’s Falkirk Mine that supplies lignite to power plant employs about 500 workers.

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Lignite Energy Council President Jason Bohrer said the deal announced Wednesday “provides a lifeline to communities and families.”

North Dakota has seven coal-fueled electric power plants. The state’s lignite mines in west-central North Dakota produce close to 30 million tons of fuel annually. North Dakota’s vast lignite reserves are second only to Australia’s.

Plans to reduce or eliminate coal from energy portfolios, along with mounting regulations to curb the climate change effects of burning the fuel, increased renewable power and cheap natural gas has hurt the state’s lignite industry in recent years.

Tschider, Rainbow Energy’s president, said the facility already has underground carbon storage space on 45000 acres (18210.87 hectares) the site and the company would incorporate carbon capture technology within five years at the plant, a move he called vital to the future of the facility.

Great River Energy closed its Stanton Station coal-fired power plant in Mercer County in 2017, saying the half-century-old factory was no longer economical. The plant was demolished a year later.

Bismarck-based Montana-Dakota Utilities plans to retire the coal-fired electric generation units at its Heskett Station near Mandan next year and replace the replace the units with a new natural gas facility.