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.