NEW ULM - After more than four years of struggling through regulation difficulties and opposition efforts, the Boiler No. 4 coal conversion project was indefinitely suspended Tuesday at the New Ulm Public Utilities Commission's (PUC) meeting.
The decision was met with cheers from the representatives of the Minnesota Sierra Club and the New Ulm Citizens for Clean Energy (CCE), who had opposed the project from its inception.
The Boiler No. 4 project was a PUC effort to convert the boiler back to coal burning, while retaining its usual natural gas burning. The reason behind the conversion, when it was proposed in 2006, was that coal was much more competitively priced than natural gas.
The project was also the last active component of the New Ulm Long Term Power Supply Portfolio, which was an overhaul of New Ulm's energy infrastructure.
The motion, which passed unanimously, will stop the project's current permitting process and suspend the project indefinitely. The permitting paperwork completed so far will be kept and filed, in case the PUC ever resurrects the project. The estimated cost of restarting the process is $7,000 to $8,000.
The PUC's decision follows its July 26 meeting, during which a revised economic outlook showed the project was no longer economically viable. The new review was requested after the Environmental Protection Agency (EPA) finally approved the project to begin modeling for regulation compliance, which is the last requirement before construction.
The report's finding found that current coal prices were comparable or higher than continuing "status quo" burning of natural gas. One of the major factors listed for driving down natural gas prices was the controversial new practice of hydraulic fracturing, or fracking, that added a glut of natural gas into the market.
At the July 26 meeting, Public Utilities Engineer Pat Wrase said that due to his past experience with natural gas prices, he was skeptical about the long-term sustainability of current prices. He advocated the PUC complete just the permitting process for the project, which would "hedge" the PUC's position by allowing 18 months to complete the project. He said it would give the PUC time to study pricing trends. The estimated completion cost was $26,000.
However, at Tuesday's meeting, the motion only advocated suspending the project. Wrase said the change came after further reports indicated natural gas pricing was sustainable for approximately five years.
"Our focus wasn't on coal or natural gas. Our focus is what is best for New Ulm," said Wrase.
He said he remains skeptical about the long-term sustainability of gas prices and will continue to monitor the markets. He said a major consideration will come in 2012, when the EPA releases its draft report on fracking.
"The EPA holds all the cards. Depending on what it decides, it could be a game changer," said Wrase.
He also said that there are no current plans for another long-term energy plan. He said the PUC is open to considering new technologies, but New Ulm is well-positioned for years to come.
CCE spokesperson Sue Kimmel made brief statement after the reading. She stated the CCE strongly supported the PUC's decision.
"Coal is our dirtiest form of energy," said Kimmel, "We consider this a win for everyone in New Ulm."
Even though CCE was initially formed in opposition to the Boiler No. 4 project, it will continue to hold meetings to promote clean energy projects in New Ulm. She said its first target would be to help make New Ulm a member of the GreenStep Cities.
Sierra Club representative Jessica Tatro said the PUC's decision wrapped up the organization's primary work in New Ulm, though it would continue to support CCE.
"In fact, New Ulm was the last truly active proposal for a new coal plant in Minnesota. Now, [the Sierra Club] will be shifting more of its focus to retiring or replacing existing coal plants in the state," said Tatro.
(Josh Moniz can be e-mailed at email@example.com)