Energy Transition Accelerating // CEO Column November 2021

Daniel Carlisle // President/CEO & General Counsel

In 2007, Minnesota set a goal to reduce carbon dioxide emissions in the state by 80 percent by the year 2050. Todd-Wadena Electric Cooperative is proud to be part of a group of cooperatives that is on track to achieve that goal while keeping energy reliable and affordable. Our wholesale power provider, Great River Energy (GRE), anticipates its direct carbon dioxide emissions will drop below the state target far ahead of schedule.

This is happening because our long, gradual journey toward cleaner electricity will accelerate dramatically in the coming years.

GRE will add 900 megawatts of wind energy, develop a long-duration grid-scale battery, and greatly reduce its dependence on coal. Later this year, GRE plans to close on the sale of the 1,100-megawatt Coal Creek Station power plant. Through an agreement with the purchaser, GRE will initially purchase coal powered energy from the purchaser, then will decrease its purchase of the plant’s output over the course of approximately 10 years. Specifically, GRE will purchase 1,050 megawatts of power from the purchaser for approximately two years after the closing of the transaction, followed by a huge reduction, resulting in the purchase of 300 megawatts for approximately eight years. In addition, the plant’s new owner plans to develop carbon capture and storage at the facility.

This journey is complex and each of these steps are important as we strive to reduce emissions and maintain affordability without affecting reliability on the electric system.

Members have taken an interest in the future and past of Coal Creek Station. Some have expressed concerns related to grid reliability because of Coal Creek Station being sold. Others have expressed regret that it will remain a resource at all, regardless of the anticipated reduced energy output and the prospects of carbon capture. Both of those views — and everything in between — were considered by the management and board at Todd-Wadena Electric Cooperative.

We believe our decision to support the sale of Coal Creek Station was the right thing to do. Our members will receive a return on their investment in Coal Creek Station as GRE projects that the transaction could save its members approximately $130 million compared with shutting down the plant. We also believe that by adding additional sources of generation such as wind and relying on our dual fuel peaking stations that we will be able to continuously provide reliable and affordable energy to our members.