Last year, the Minnesota Public Utilities Commission approved investor owned utility Minnesota Power’s mercury emissions reduction plan for the 585 MW Boswell Unit 4, its largest coal-fired power plant.  Minnesota’s Mercury Emissions Reduction Act (MERA) requires utilities to prepare plans to reduce mercury emissions for the state’s six largest coal power plants.  See Minn. Stat. §§ 216B.68-.688.  For Boswell 4, which is located in Cohasset, MN, Minnesota Power submitted a plan to retrofit the unit to reduce the plant’s mercury emissions by 90% (the statutory goal under MERA) as well as reduce emissions of multiple other pollutants.

A group of environmental intervenors challenged the approval, arguing that the Commission had not adequately considered the option for replacing Boswell 4 with a natural gas plant instead of retrofitting it to reduce emissions.   Specifically, they contended that the Minnesota Pollution Control Agency (MPCA)  should have produced a full evaluation of the natural gas alternative as it had for the retrofit plan for the Commission’s consideration.  The Minnesota Court of Appeals issued a decision yesterday denying the environmental intervenors’ appeal.   The Court found that the question at issue was the statutory interpretation of MERA.  In its analysis, the Court found that upon examination of the statute as a whole, it is clear that the legislature’s intention with MERA is to regulate rather than replace coal plants.  And, as a result, MPCA was not obligated to substantively assess the prospect of retiring and replacing Boswell 4 with a natural gas facility.   Further, the Court found that, even if MPCA should have evaluated the natural gas alternative, the Commission was required by statute to approve a plan meeting the criteria set forth under MERA.  Since Minnesota Power’s retrofit plan met those criteria, the Commission was required to approve it.

The Boswell 4 retrofit project is already under construction and projected to be completed in 2016.  Decisions about investing in mercury reduction retrofits for coal plants are among the many significant resource planning decisions that Minnesota utilities will be facing in the next several years, with the Commission investigating updating the costs assigned to pollutants in the resource planning process and Minnesota regulators exploring implementation options for EPA’s Clean Power Plan.

Photo of Sarah Johnson Phillips Sarah Johnson Phillips

Sarah Johnson Phillips is a partner in the firm’s Energy Development practice group, where she focuses on energy project development; buying, selling and financing energy projects; and energy regulatory matters. She advises large wind and solar project developers on permitting and real estate…

Sarah Johnson Phillips is a partner in the firm’s Energy Development practice group, where she focuses on energy project development; buying, selling and financing energy projects; and energy regulatory matters. She advises large wind and solar project developers on permitting and real estate matters, including obtaining major project permits, negotiating leases and easements, and title work.  She also has particular experience working on distributed solar and community-shared solar projects, including negotiating offtake agreements, leases, financing arrangements, M&A transactions, interconnection agreements, and regulatory matters. In addition, Sarah works with large energy consumers on a range of regulatory issues and proceedings affecting ratepayers and regularly appears before the Minnesota Public Utilities Commission.

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Photo of Andrew Moratzka Andrew Moratzka

Andrew Moratzka focuses on litigation of various utility- and energy-related issues. Drew represents iron mines, paper companies, refineries, steel manufacturers and other large industrial customers in electric and gas rate cases and various regulatory matters at the state and federal level. He also…

Andrew Moratzka focuses on litigation of various utility- and energy-related issues. Drew represents iron mines, paper companies, refineries, steel manufacturers and other large industrial customers in electric and gas rate cases and various regulatory matters at the state and federal level. He also represents independent power producers. In these roles, Drew regularly appears before state public utilities commissions and administrative law judges. Drew also has experience arguing energy-related and bankruptcy-related issues at the appellate level. Given his background, clients also retain Drew for utility contract negotiations and to consult on various legislative matters. Drew is a past chair of the firm’s Energy Development practice group.

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