Lawsuit filed over plans to close biomass power facilities; would impact Ely area

Lawsuit alleges closing facilities would threaten environment

CHIPPING - Wally Kuehl operates a chipping operation outside of Ely in 2012. Photo by Nick Wognum.

A lawsuit filed by the Associated Contract Loggers & Truckers of Minnesota raises environmental objections to Xcel Energy’s proposal to cancel biomass Power Purchase Agreements (PPA) at biomass power facilities in Hibbing, Virginia and Benson.
These biomass facilities generate electricity by burning turkey litter and/or wood chips, providing nearly 100 direct jobs and hundreds of indirect jobs.
Loggers in northeast Minnesota, including in Ely, ship $7 million of wood chips annually to the plants in Hibbing and Virginia.
“There are nine biomass suppliers for the Laurentian Energy Authority plants in Virginia and Hibbing. Six of the nine are ACLT members,” said Scott Dane, executive director of the Associated Contract Loggers and Truckers.
“These guys have been shipping wood chips there for 11 years on a 20 year agreement. They still have nine more years under the agreement,” said Dane.
In addition to the economic impacts, including loss of logging jobs locally, the plant closings would leave no market for wood chips, something the U.S. Forest Service and other land managers desperately need.
“The U.S. Forest Service has 65,000 acres in the Ely area of land they need to manage that’s well beyond merchantable age. Those areas have been identified for biomass. Without that market it’s going to be impossible for the Forest Service to get ahead on forest management and get back on track,” said Dane.
Superior National Forest supervisor Connie Cummins wrote to the state and noted, “The Superior National Forest is concerned that the PUC does not have sufficient information on which to base an informed decision on terminating Xcel’s power purchase agreements with Laurentian Energy Authority, LLC.
“We believe that Xcel’s economic analysis doesn’t include costs associated with land management, and economic impacts to loggers and local communities of Northern Minnesota. In addition, we do not believe the PUC realizes the importance of a biomass market for the purpose of removal of hazardous fuels from the Superior National Forest and Northeastern Minnesota in the form of biomass.
“The removal of woody debris in the form of biomass plays a crucial role in hazardous fuels reduction on the Superior National Forest, which is the primary tool the Forest Service uses in preventing catastrophic wildfires.
“In the past several years several thousand tons of biomass has been shipped from the Superior National Forest to the LEA facilities, this equates to thousands of acres of hazardous fuels reduction through biomass removal.
With the ever increasing wind events, outbreaks of insect and disease and the past practices of fire suppression the three million acre Superior National Forest is in a condition that requires the Forest Service to engage in a large hazardous fuels reduction program. With the loss of the biomass market the cost of this program would increases significantly due to the requirement of having to dispose of the material using alternate methods. These methods are both costly to the tax payer and provide addition risks,” Cummins wrote.
Dane agreed that invasive species such as the emerald ash borer, and the blowdown damage around Ely are creating a fuel hazard that grows every year.
“Those trees have to be disposed of and the only way to do that is by chipping. Without that it’s an increasing fire hazard from unmanaged timber,” said Dane.
Area loggers have been offered a buyout through the special legislation passed in the waning hours of the last session. Dane said the offers are a pittance.
“It’s pretty easy to see in a typical logging operation you have $1 million or more into equipment to support biomass from bunchers to skidders to chippers to trucks,” said Dane. “The offer to these loggers pretty much only covers the cost of the chipper and the trees don’t jump into the chipper on their own, there’s a lot more involved.”
The action to terminate the PPAs and close the Hibbing, Virginia and Benson facilities followed the passage of 2017 legislation.
The bill gave Xcel Energy the ability to ask the Minnesota Public Utilities Commission (PUC) to approve terminations for the three facilities.
The legislation also provided Xcel Energy with the authority to use money originally intended to support development of the renewable energy industry in Minnesota to pay off the cities of Benson, Virginia and Hibbing in exchange for their support of Xcel’s plans.
“In addition to devastating many hardworking families and businesses across greater Minnesota who depend on these facilities, Xcel’s plan would also be terrible for the environment,” said Dane.
The three facilities were opened as a result of a 1994 agreement made by Northern States Power Company (NSP), the predecessor to Xcel Energy, which granted authority to the utility to expand radioactive waste storage at the Prairie Island Nuclear Facility, allowing it to continue to operate.
In exchange, NSP committed to purchase wind- and biomass-generated electricity. This summer, Xcel Energy filed a petition with Minnesota’s PUC to terminate these biomass PPAs, arguing that the terminated agreements could potentially result in savings to its ratepayers.
“Although terminating agreements and closing the Benson Power facility may help some people save a few cents on utility bills, the environmental and economic benefits that this plant brings to Minnesota greatly outweighs the miniscule savings that a few customers might realize after the plant is closed,” added Justin Sawyer, owner of Sawyer Timber Company in Backus, Minnesota.
The Associated Contract Loggers & Truckers of Minnesota represents more than 200 companies in the timber industry and believes that Xcel Energy’s move to terminate agreements and close biomass power facilities is premature, threatens an industry vital to Minnesota’s forest management, and that further time and legislative action is needed to ensure a strong and vital biomass industry for Minnesota.