Electricity is interesting. You flip a switch and the light is on, instantly. On the other hand, it seems to take electric utilities years to figure out how they’re going to get that power to you.

The answers to that question tell us how quickly we’ll move away from greenhouse gas emitting power to the clean power we know the planet needs.

Minnesota Power (MP) is a utility that provides electricity in a 26,000-square-mile service area in northeastern Minnesota, including industrial customers such as taconite mines and paper mills. The company has been working on a plan since 2024. It’s called an Integrated Resource Plan (IRP) and it’s required every two years by the state’s Public Utilities Commission (PUC). The plan projects how much electricity the utility will need in the coming 15 years and where it will come from. Most power companies produce power themselves, of course, but they can buy it from energy markets; they also need to plan and build the infrastructure needed to bring it to homes and businesses.

This particular plan got more complicated last fall when a BlackRock subsidiary and the Canada Pension Investment Board bought Minnesota Power’s parent company, Allete. The $6 billion deal was opposed by most people who commented on it to the PUC. But company management said the new owners would invest billions of dollars in new infrastructure to help MP meet the requirements of Minnesota’s carbon-free power law, set to go into effect in 2040.

Critics were skeptical of that promise, since a more typical pattern in the investment world is that purchase by a huge private equity firm like BlackRock often spells decline and even death for the original business in the interest of greater short-term profits. Some observers are saying that’s already happening in this case. “We were sold a bill of goods; many of us thought the sale was a sham, and they seem to be following up and really making a sham,” says Bret Pence, Greater Minnesota Director of Minnesota Interfaith Power and Light, a non-profit group focusing on justice in the energy transition. “Most of the promises they made for clean energy investments have evaporated,” he says.

For at least 15 years most of Minnesota’s utilities have been reducing the use of coal, in part because of state laws. They’ve been adding renewables such as wind and solar, and more recently incorporating batteries and other forms of storage to make the renewables more reliable. They’ve also been using natural gas, described as a “bridge fuel” to carry us to the point where renewables can provide all the electricity we need. Natural gas emits roughly 50–60% less carbon dioxide per unit of energy than coal when burned. However, the leakage of methane from extraction, transmission, and distribution to the power plant is significant. And methane traps heat better than CO2 over 100-year periods. So what we now know is that when the methane leakage is factored in, natural gas actually emits a bit more GHG’s than coal. Coal is dirty in many other ways besides GHG emissions, so no one advocates for a return to coal for climate or justice reasons

“We find that the natural gas bridge is likely already behind us…”

–RMI

The main elements of the 15-year plan Minnesota Power is working on include the following:

• Continue to plan to stop burning coal at Boswell Energy Center in Cohasset by 2035, as approved in a previous IRP.  Unit 3 (355 megawatts) would be refueled to run on natural gas by 2030; unit 4 (about 400 megawatts) would stop using coal in 2035, thereafter possibly burning a combination of gas and biomass.
• Add approximately 750 MW of new natural gas resources by 2035, in addition to the repowers at Boswell Energy Center.  
• Add new carbon-free resources by 2035, including 400 MW of wind and 100 MW of energy storage, such as from batteries.
• Save 100 MW by using new industrial demand response by 2028. (When customers reduce their energy use during periods of high demand, it helps utilities avoid having to generate more power.)

Planners use models to test various combinations of resources. As we all know, a model is only as good as the data that’s put into it. Minnesota Power appears to be using inputs that push the plan toward natural gas over renewables.

The Minnesota Center for Environmental Advocacy, together with several other clean energy groups, ran the same model with different inputs. They found that Minnesota Power “generally overstated the costs of solar PV (photo-voltaic), wind and four-hour batteries,” did not mention that natural gas turbines have “skyrocketed in price during the past year,” and assumed costs for the new Form Energy 100-hour iron-air battery “significantly higher” than costs reported by Form.

Fresh Energy, a non-profit advocating equitable carbon-free energy, also participated in the model work. The group’s Director of Electricity, Will Mulhern, says the MP model should “better reflect their participation in MISO,” the Midcontinent Independent System Operator. MISO operates the electric grid for the central U.S. and facilitates buying and selling of power in the region. Minnesota Power regularly buys power “when it’s lower cost than producing energy from owned generation resources,” according to Amy Rutledge, Director of Corporate Communications at MP. But the IRP doesn’t include any power purchases.

Another non-profit group, CURE, which advocates for resilient communities, says the MP plan “ignores the financial risks due to the extreme price volatility of gas, rising fuel prices from export market competition, as well as the ballooning cost of building new gas-fired generation.”

“The price of new combined-cycle gas plants is roughly triple the cost of projects built in the early 2020s and orders placed now likely will not be fulfilled until 2030, or later.”

–Institute for Energy Economics and Financial Analysis

All these choices of inputs to the model cause it to suggest that MP should build more capacity, specifically gas generators.

The Clean Energy Organizations’ inputs prompted the model to present five alternative plans that they say are “affordable, reliable, have fewer emissions, and avoid any new long-term commitment to gas during the term of this IRP.”

A further oddity of MP’s plan is that it includes projected demand from the New Range Copper Nickel mine (formerly Polymet), which has been in limbo for nearly two years, after courts struck down permits issued by state and federal agencies. And it includes projected demand from two mines, Hibbing Taconite and Minorca, which have been closed for more than a year, with no specific plans to re-open.

Minnesota Power’s large customers, mines and paper mills, use 74 percent of the utility’s output. It’s important to understand that utilities make money when they build power plants and power lines and charge their customers for those investments. They don’t make money when they buy and sell power from other companies.

Now that technology has brought us to the point where solar power is the cheapest source of electricity, researchers and manufacturers are racing to develop methods of storage, so renewables can be used 24/7. Xcel Energy recently announced it plans to use a 300-MW iron-air Form Energy battery produced to power a Google data center in Pine Island. And for the proposed data center in Hermantown, Minnesota Power appears willing to accept Google’s offer to build about 700 MW of new clean resources, including 300 MW of wind and 400 MW of battery storage.

Minnesota Power is also using battery power to smooth supply and demand fluctuations with renewables. MP and the city of Grand Rapids together operate a solar-plus-storage facility. The 2.5 MW solar array follows the sun and sends electricity to the grid or to a battery when a big demand is forecast. This exciting project is not featured in the IRP. Why isn’t MP eager to use more clean resources and storage for its other customers?

In fact, MP’s model only looks at solar and storage separately; it continues to downplay renewables as intermittent sources.

Notably, the last year covered by this IRP analysis, 2039, falls immediately before 2040, when the utility is supposed to be fully compliant with the carbon-free standard. If Boswell continues burning 700 MW of gas until 2039, that suggests arriving at a precipice in the following year, when the gas burning stops, and where does the power come from now? Another way of looking at it: why invest millions of dollars in gas infrastructure that can’t be used after 2040?

“Clean Firm Plan”

Let’s turn back for a minute to that sale of Minnesota Power to Blackrock and the Canadian pension fund last fall. As a condition of its approval, the Public Utilities Commission required MP to add a “Clean Firm Plan” to its IRP that would minimize the use of natural gas, forego the 750 MW natural gas plant included in the company’s IRP, and describe how it would use a $50 million fund that was set up during the sale to develop carbon-free resources.

Minnesota Power responded with a 74-page document that emphasized that the company’s top priority is “reliability and customer safety during the most extreme winter weather events… Because wind and solar generation cannot be relied upon during these critical periods due to their intermittency, Minnesota Power’s planning conservatively excludes their contribution in this winter peak demand outlook, ensuring the system is prepared to meet customer needs under the most challenging conditions.” It did not propose a new plan but repeated the plan it had already prepared.

The document does not specify how the company would use the $50 million fund in the first five years of the planning period, saying, “the technology that would meet the eligibility listed in the fund… is still evolving.”

Utilities have traditionally looked at the world through a conservative lens, since they have a basic responsibility to keep the lights on, no matter what. But Minnesota Power seems ready to take risks in its “Customer Load Growth” plan, a sort of voluntary addendum to the IRP. The company says its “customer load has the potential to more than double in this planning period.” Without offering any details about this tantalizing possibility, the company wants approval of plans to “immediately begin to develop 750 MW of combined cycle natural gas generation to be in service by 2035,” along with some renewables and storage.

“This is not the right way to do resource planning for load growth,” says Will Mulhern of Fresh Energy. “They should wait until the need is certain. There’s too much risk in approving resources for speculative load growth,” he says.

Not using the $50 million fund is also a sore point with clean energy advocates. “It’s a condition of the PUC’s approval of the sale of Minnesota Power to Blackrock,” says MN IPL’s Bret Pence. “There are technologies that meet the conditions; we want to see them used.” Beyond the money, Pence says Minnesota Power is duplicitous. “They said they needed the buyout because it would provide cheap capital to do a clean energy transition. Now, the first plan is gas-heavy, with no ambition for clean firm planning for the next 15 years,” he says.

For years, utilities have been using gas as a transition fuel with the ultimate goal of relying on renewables. Recent studies from RMI (formerly Rocky Mountain Institute) have identified “optimized combinations of wind, solar, battery storage, and demand-side management that can provide the same grid services as a gas plant—call[ing] into question the cost-effectiveness of investment in new gas infrastructure.” They warn of a risk that “continued natural gas infrastructure investment will turn into a bridge to bankruptcy for investors and stranded investments that captive customers will have to pay for.”

Minnesota Power is in a position now where it could skip the gas leg of the transition, moving directly from coal to renewables+storage. But it doesn’t seem interested in making that leap.

Public comment Submit A Comment Online / Public Utilities Commission on Minnesota Power’s IRP can be made until May 18. The docket number is 25-127.