Cheap natural gas a challenge for cogeneration plant

Stacy A. Cook, Vice President and General Manager of Koda Energy, at the combined heat and power biomass plant in Shakopee, Minnesota. (Photo by Craig Lassig for Midwest Energy News)

Stacy A. Cook, Vice President and General Manager of Koda Energy, at the combined heat and power biomass plant in Shakopee, Minnesota. Photo by Craig Lassig for Midwest Energy News. (click to enlarge)

When airborne dust ignited a silo explosion last spring at a biomass cogeneration plant in Minnesota, it was a major setback for the pioneering energy facility.

But the blast’s impact on Koda Energy’s bottom line was a blip compared to the prolonged strain of operating in an energy market that’s been turned upside down by fracking and cheap natural gas.

When a tribal government announced a partnership in 2006 to build the $60 million plant with one of the world’s largest malting companies, Rahr Malting Co., they were coming off a winter when spot prices for natural gas topped $13 per million Btu.

By the time the power plant began operating in May 2009, natural gas prices had plunged below $4. A few years later, in the spring of 2012, spot prices would briefly dip below $2.

Ruptured Michigan pipeline to reopen with twice the capacity

WIND: Ikea plans to build a wind farm in Illinois large enough to produce 65 percent more electricity than the retailer’s U.S. operations consume, while a new industry report says policy uncertainty caused wind industry growth to slow in 2013. (Chicago Tribune, USA Today)

EFFICIENCY: At an Ohio panel discussion, business leaders say combined heat and power has strong potential in the state, but regulatory hurdles and legislative efforts to gut efficiency laws are creating barriers. (Midwest Energy News)

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PIPELINES: A ruptured Michigan pipeline responsible for a major 2010 spill has been rebuilt and is weeks away from restarting at double the capacity. Meanwhile, President Obama quickly rejected a call by 11 Democrats to issue a decision on the Keystone XL pipeline by May 31. (InsideClimateChristian Science Monitor)

RELIABILITY: A climate group’s report says severe weather has doubled the frequency of major power outages over the last decade, and Ohio and Michigan are among the hardest hit states, while a U.S. Senate committee heard testimony on electric grid security vulnerabilities. (The Columbus Dispatch, USA Today)

ELECTRICITY: Columbus, Ohio, is exploring whether the city should pursue municipal energy aggregation, and a Michigan lawmaker will take part in a live chat Monday about his customer-choice bill that would open the state’s electricity market to more competition. (Columbus Business First, MLive.com)

UTILITIES: FirstEnergy CEO Anthony Alexander called for a renewed focus on fossil fuels this week in a speech to the U.S. Chamber of Commerce in Washington, D.C. (GreenTechGrid)

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OIL/GAS: A new reports finds a wide variety of compensation for Ohio landowners’ oil and gas rights, with signing bonuses ranging from $5,800 per acre to as little as $10 per acre. And a North Dakota commissioned study sees the state’s oil production peaking between 1.2 million and 1.5 million barrels per day. (Columbus Business First, The Forum of Fargo-Moorhead)

FRAC SAND: A Minnesota appeals court has 90 days to rule on a challenge to the first permitted frac sand mine in Winona County. Opponents say the county should have required further study before allowing work to begin. (Minnesota Public Radio)

COMMENTARY: Not all biomass is created equal, and our energy policies must distinguish among the good, the bad and the ugly. (NRDC Switchboard)

Is Minnesota the next battleground in the tar sands fight?

Connie Bonniwell of Robbinsdale, holds a protest sign during a 2013 Public Utilities Commission meeting in St. Paul. (AP Photo / Star Tribune / David Joles)

Connie Bonniwell of Robbinsdale, Minnesota holds a protest sign during a 2013 Public Utilities Commission meeting on an Enbridge pipeline expansion. (AP Photo / Star Tribune / David Joles)

Marty Cobenais has been to every state along the proposed Keystone XL pipeline route, organizing resistance to the project from Montana to Texas.

He’s been arrested twice for civil disobedience during Keystone XL protests in front of the White House.

Now, the Bemidji man believes it’s time for pipeline activists around the country to turn their attention to his own backyard in northern Minnesota.

A trio of major pipeline projects proposed by Canadian fuel transporter Enbridge have been moving forward in Minnesota, mostly below the national radar.

“We need the national attention in Minnesota,” Cobenais said. Minnesota has sent busloads of protestors to Nebraska and Washington, D.C., he said. Now, “they should be here with us, too.”

Minnesota lawmakers look to boost wind energy exports

(Photo by PXLated via Creative Commons)

(Photo by PXLated via Creative Commons)

A legislative reform moving ahead in Minnesota aims to better position the state to become a wind energy exporter.

Minnesota has long been a wind energy leader. The state has nearly 3,000 megawatts of installed wind capacity, ranking it seventh in the nation.

Almost all of it’s been built for Minnesota customers. The state exports relatively little wind energy compared to neighboring Iowa or North Dakota.

It’s not for lack of resources. Minnesota has enough land and wind to conceivably generate nearly 500,000 megawatts of wind power.

“We have more [potential] wind energy in the state than we can develop ourselves, and we should use that resource,” said Ben Gerber, energy policy manager for the Minnesota Chamber of Commerce. “If we didn’t develop this it would be like North Dakota only developing the oil they needed in their state to meet their own needs.”

Over the last several months, Gerber worked with the wind industry and environmental groups to identify and target a potential regulatory barrier that may be deterring developers from trying to sell Minnesota wind energy into other states.

In bid against gas, Minnesota regulators say solar can proceed

This solar array near Slayton, Minnesota provides power for Xcel Energy. Geronimo Energy proposed similar projects to help meet peak energy needs. (Photo by CERTs via Creative Commons)

This solar array near Slayton, Minnesota provides power for Xcel Energy. Geronimo Energy is proposing similar projects to help meet peak energy needs. (Photo by CERTs via Creative Commons)

A proposed $250 million distributed solar project appears to have held its own in a Minnesota regulatory process that put it in competition with three natural gas options.

The Minnesota Public Utilities Commission on Thursday ordered Xcel Energy to pursue a power-purchase agreement with a Twin Cities solar developer to meet part of its projected generation shortfall later this decade.

Geronimo Energy’s 100 megawatt solar proposal will be paired with one or more natural gas projects, to be determined later, to provide up to 500 megawatts of new generation Xcel expects to need by 2019.

The agreements would be subject to further review by the PUC.

“It’s a big win for us,” said Betsy Engelking, a vice president at Geronimo Energy. “We participated in an RFP against natural gas and we were selected.”

Sierra Club says Minnesota utility violating pollution rules

The Boswell Energy Center near Cohasset, Minnesota. (Photo © Steve Roberts, used with permission)

The Boswell Energy Center near Cohasset, Minnesota. (Photo © Steve Roberts, used with permission)

The Sierra Club is repeating a threat of a lawsuit against a northern Minnesota utility, alleging thousands of pollution violations at its coal-fired power plants.

Minnesota Power is the latest Midwest utility to face a legal threat from the Sierra Club over alleged soot or particulate violations under the Clean Air Act. The environmental group has filed similar complaints against St. Louis-based Ameren and Detroit’s DTE Energy.

A letter of intent delivered to Minnesota Power late last week says the company committed more than 12,000 air quality violations at three facilities between 2009 and 2013.

“We clearly dispute what they’re claiming,” said Minnesota Power spokesman Pat Mullen.

Minnesota takes step to link energy loans with utility bill

(Photo by ilovebutter via Creative Commons)

(Photo by ilovebutter via Creative Commons)

Minnesotans may soon be able to pay for insulation, energy-efficient appliances, and even solar panels through a line item on their utility bill.

A proposal to encourage on-bill repayment of energy loans is advancing in the Minnesota Legislature with bipartisan and utility support.

Such arrangements are already allowed in the state and were used in the 1980s and ’90s, but utilities say they need more legal protection before they would consider reintroducing a program, according to the bill’s supporters.

The legislation that received a hearing in a House energy committee last week would clarify that the bank that lends the money is responsible for any unpaid loans, not the utility’s shareholders or ratepayers.

Minnesota becomes first state to set ‘value of solar’ tariff

A rooftop solar installation in Minneapolis. (Photo via Sundial Solar/Minnesota Solar Challenge: Creative Commons)

A rooftop solar installation in Minneapolis. (Photo via Sundial Solar/Minnesota Solar Challenge: Creative Commons)

Minnesota utility regulators on Wednesday approved the nation’s first statewide formula for calculating the value of customer-generated solar power.

The Minnesota Public Utilities Commission voted 3-2 in favor of a proposal aimed at settling the perennial debate over how much solar power is worth to a utility and its ratepayers, as well as society and the environment.

“I think that consensus is really beginning to emerge,” said Lynn Hinkle, policy director for the Minnesota Solar Energy Industries Association. “There’s no doubt what happened today was a step forward.”

Investor-owned utilities will now have the voluntary option of applying to use the value-of-solar formula instead of the retail electricity rate when crediting customers for unused electricity they generate from solar panels.

Bill to block EPA carbon rules faces hurdles in Senate

IOWA: As Iowa faces a potential surge in distributed generation, advocates and some legislators are concerned the state isn’t prepared. (Midwest Energy News)

GRID: A new study from GE Energy Consulting finds the PJM Interconnection could move to 30 percent renewable energy by 2026 with no impact on reliability and a potential decline in energy costs. (EnergyWire)

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EPA: A bill to block proposed EPA carbon regulations passed the House on Thursday but faces hurdles in the Senate, where its odds likely hinge on whether sponsors can convince Democrats from coal-rich states to join the cause. (The HillE&E Daily)

SHALE: Oil and gas production in Ohio continues to soar, with 2013 production roughly double the previous year’s total, but the state shouldn’t hold its breath for a new refinery to be built in the state, industry officials said at an annual meeting Thursday. (The Plain Dealer)

FRACKING: An Ohio company is scrapping plans to recycle crushed rock and shale leftover from fracking because drilling companies are unwilling to pay the trucking and processing costs, it says. Meanwhile, county officials in Wisconsin are wary about a new bill that curbs local governments’ ability to regulate frac sand mining. (The Columbus Dispatch, LaCrosse Tribune)

PIPELINES: As environmental groups in Minnesota prepare to fight a proposed Enbridge pipeline replacement project, Wisconsin Gov. Scott Walker toured Enbridge’s facilities in Superior, Wisc., on Thursday and called the company’s expansion plans a “tremendous opportunity.” And 29 Nebraska lawmakers signed a letter of support this week for the Keystone XL pipeline. (Minneapolis Star Tribune, The Associated Press, Omaha World-Herald)

OIL-BY-RAIL: The National Transportation Safety Board will hold a two-day forum next month on safety issues related to shipping crude oil and ethanol by rail. (The Kansas City Star)

ETHANOL: South Dakota Gov. Dennis Daugaard on Thursday announced that the state will begin testing higher-blend E15 ethanol in part of the state’s vehicle fleet. (The Associated Press)

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SOLAR: The U.S. solar industry grew by 41 percent in 2013, bringing the nation’s photovoltaic solar capacity to more than 12,000 megawatts, according to a new annual report from the Solar Energy Industries Association. (ClimateWire)

OPINION: As Keystone XL supporters attempt to link the issue to the chaos in Ukraine, Bloomberg Businessweek associate editor Matthew Phillips writes that the argument is “tenuous at best,” and that the pipeline would do little to change Ukraine’s current situation. (Bloomberg Businessweek)

Are utilities’ concerns about aging infrastructure overblown?

(Photo by Robert Carr via Creative Commons)

(Photo by Robert Carr via Creative Commons)

A recent survey identified aging infrastructure as the most common concern keeping electric utility professionals up at night.

Perhaps they should rest a little easier.

Aging utility infrastructure isn’t the ticking time bomb that many perceive it to be, argues Lee Willis, a veteran utility consultant with Quanta Technology and author of a 2013 book on the subject.

That’s not to say replacing old equipment won’t be a growing cost for utilities in the years ahead, says Willis, but the experience will be more like wading through quicksand than falling off a cliff.

“It is the biggest manageable problem they have,” says Willis, a senior vice president with Quanta Technology.