Otter Tail Power exit is best for Coyote Plant

The article below originally appeared in the Fargo Forum:

The Otter Tail Power Company made headlines when it announced it would be seeking to withdraw from its 35 percent ownership of the Coyote Station in Beulah. This announcement garnered plenty of criticism in North Dakota, but Otter Tail’s exit from the plant is actually the best-case scenario for the plant’s long-term operation.

Through my work at Center of the American Experiment, I have been one of the most vocal supporters of North Dakota coal plants in the state of Minnesota. In fact, we recently garnered nearly 900 signatures urging Minnesota co-op board members to support the sale of the Coal Creek Station. John Weeda, of the North Dakota Transmission Authority, has used graphs we made showing how Coal Creek delivered more electricity to the grid during multiple hours of the polar vortex of 2021 than the entire regional wind fleet combined in his presentations.

Otter Tail’s exit is almost certainly the best-case scenario for the Coyote Station because policymakers and members of the Public Utilities Commission in Minnesota are making the dangerous and unwise decision to prioritize renewables over reliability and affordability. This unfortunate political reality no doubt influenced Otter Tail’s decision to divest from the plant.

Minnesota’s PUC is a dysfunctional mess, and it is largely beholden to well-funded wind and solar special interest groups. These groups have successfully cowed the PUC into delaying the transfer of the high-voltage transmission line that transports electricity generated at the Coal Creek Station to Minnesota for purely ideological reasons, even though Rainbow Energy has said they plan to install carbon capture and sequestration technology on the plant to reduce emissions.

Coyote will likely need upgrades in order to comply with the regional haze rules, and it is unlikely, in my opinion, that the Minnesota PUC will allow Otter Tail to recoup those costs from its ratepayers. These upgrades will also be opposed by Attorney General Keith Ellison, who is probably the most partisan attorney general in Minnesota’s history. These parties would try to use the needed regional haze upgrades as a reason to shut down the plant, rather than see them as an opportunity to improve the environment.

Finding a new buyer for the plant who does not have the same regulatory and political constraints at Otter Tail is the best-case scenario for Coyote station and the North Dakota families and businesses who rely on its continued operation. The North Dakota Public Service Commission is a much more reasonable regulatory body than its Minnesota counterpart, and the rest of the Midwest will need Coyote’s reliable, affordable electrons for years to come as Minnesota regulators foolishly shut down our existing coal plants.

Isaac Orr (@thefrackingguy) is a policy fellow specializing in energy and environmental policy at Center of the American Experiment.