Bill to compensate Benson for loss of Benson Power, LLC; Dayton vetoes

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By Reed Anfinson
Swift County Monitor-News

Publisher’s note: Early Tuesday morning Gov. Mark Dayton vetoed the bill that contained the langauge that would have provided Benson with compensation for the closing of Benson Power, LLC.

A 213-page omnibus jobs and energy bill passed the Republican-controlled Legislature Monday. It includes language to end the biomass mandate and compensate the City of Benson for the loss of Benson Power, LLC, and is now on its way to an uncertain future on the desk of Democratic Gov. Mark Dayton.

It passed the Senate 34-30 and the House 75-54; both votes were along party lines with few exceptions. Republicans control the Senate with a narrow 34-33 majority but have a commanding 77-57 majority in the House.

It wasn’t necessarily the language favored by Northern States Power (NSP) and the City of Benson on the 55-megawatt power plant at the city’s western edge that caused the party-line votes. That language is only 1.5 pages of the 200-plus page legislation.

Still, some Democrats are unhappy with the part of the bill that would see Benson paid $20 million over four years for economic development efforts to replace the loss of Benson Power should it be shut down.

Benson City Manager Rob Wolfington spent the day at the Capitol on call to meet with the legislators or the governor’s office if called on to plead the case for the bill’s passage with the biomass plant and NSP language in it.

Dayton has already said he will veto the $378 million bill, which deals with economic development, energy, commerce and other areas of the state’s economy. Democrats in the House and Senate had multiple problems with the bill with their concerns shared by the governor.

“I don’t see anything particularly good in the energy section,” Rep. Jean Wagenius (DFL-Mpls) was quoted Monday in the Session Daily, a publication of the House of Representatives Public Information Services. “The bill ‘sabotages’ solar energy programs and puts money from the Renewable Energy Fund into a newly created fund with entirely different priorities,” which Rep. Susan Allen (DFL-Mpls) termed a ‘slush fund.’”

Back in 1994, Northern States Power (NSP) agreed to produce 125 megawatts of biomass power in exchange for being allowed to store spent nuclear fuel casks on Prairie Island. Benson’s Fibrominn power plant, later renamed Benson Power, was to supply 55 megawatts of that electricity by burning 500,000 tons of turkey litter and woodchips.

A 22-year power purchase agreement was signed between the biomass plant and NSP with 11 years now remaining in the contract. The other biomass power needed to fulfill the mandate is being produced by St. Paul District Energy and Laurentian Energy Authority (LEA). LEA serves Hibbing and Virginia.

Since the biomass mandate was approved by the Legislature back in the 1990s other forms of renewable energy, particularly wind and solar, have become vastly cheaper to produce. Both are now growing sources of power NSP.

Another change that has occurred over the past 11 years is that natural gas has become abundant and cheap due to new methods of accessing oil and gas deposits.

NSP’s has said that ending the biomass mandate and shutting down Benson Power and the LEA power plants will save Xcel Energy’s customers an estimated $650 million to $770 million over 10 years.

Benson had aggressively fought the elimination of the biomass mandate earlier this year when it heard that Xcel Energy intended to buy the power plant and shut it down. Its effort led to the language being pulled in both the state Senate and House. However, the city recognized its victory was likely fleeting.

With only 11 years left in the biomass mandate, at some point in the plant would have to sell its extremely expensive power on the open market and was unlikely to find a buyer. That means by 2028 at the latest the plant will be shut down....


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