MANDAN, N.D. — Montana-Dakota Utilities is making its case to state regulators to build a second natural gas-fired power generator at its Heskett site north of Mandan.
The company announced in February that it would close several facilities that burn coal to produce electricity, including the 100-megawatt Heskett Station and the 45-megawatt Lewis & Clark Station in Sidney, Mont. The company said it plans to build an 88-megawatt gas-fired peaking unit alongside an existing gas generator of the same size, which began operating in 2014.
The new generator would run as a peaking unit with a simple cycle combustion turbine, meaning it would be used only when the demand for electricity across the grid is high. Such a turbine can fire up within 20 minutes, MDU spokesman Mark Hanson said.
“They can ramp up and down with relative ease, and it’s not as hard on the equipment,” he said, comparing the proposed gas unit to a coal plant.
MDU estimates the facility will cost $73 million. The company expects the cost of adding the new turbine and purchasing power off the market to be half of what it would cost to continue operating the two coal power stations.
The utility is seeking a state Public Service Commission determination that the project is reasonable and prudent, and it filed an application Thursday, Aug. 29. Commissioner Julie Fedorchak said it’s not mandatory the utility receive such a distinction for the turbine, but if it does not, it would then have to defend the cost in its next rate case before the PSC.
MDU said the power generated by the new gas unit will help make up for the electricity it no longer produces from its coal plants.
“This new facility will add to our generation portfolio and provide our customers with a cost-effective capacity resource for many years into the future,” MDU President and CEO Nicole Kivisto said in a statement. “We think this is a great opportunity to construct on land we already own, next to company-owned generation, which translates into the best-cost option for our customers.”
MDU anticipates construction on the new unit to begin in 2022 and finish in early 2023. The Heskett coal station is slated to close in 2022, with Lewis & Clark shutting down a year earlier.
By building its new gas unit while retiring the coal facilities, the utility can avoid a lengthy interconnection process with the region’s grid operator, Hanson said.
The new unit would use gas delivered through an existing 24-mile pipeline that connects to the Northern Border Pipeline near St. Anthony. Northern Border runs from Canada to the Chicago area, and 60% of the gas it carries comes from North Dakota, said Justin Kringstad, director of the North Dakota Pipeline Authority.
He anticipates that as oil and gas production grows, in two to three years North Dakota will experience constraints on transmission pipelines that take gas south out of the state. The proposed MDU project could help alleviate the congestion.
“Any new gas that is pulled off Northern Border to convert to power generation then allows additional gas to flow onto that system to the midcontinent market,” Kringstad said.
Two other gas power plants exist in North Dakota in Williams and McKenzie counties
The closure of the Heskett and Lewis & Clark coal plants follows a nationwide decline in coal-fired power amid competition from abundant natural gas and renewables. The two facilities, built in the 1950s and 1960s, are aging, as well.
“They’re not getting called into the market as they used to,” Hanson said. “They’re not as efficient. The cost is higher now.”
The coal facilities at Heskett and Lewis & Clark employ a combined 71 workers, including several temporary employees replacing people who have recently left.
MDU is providing a retention package to keep workers on until the coal plants shut down. The utility also is offering retraining for workers to take other positions within the company, Hanson said.
MDU anticipates it will need 11 workers between its existing Heskett gas unit, the new one and two peaking units that operate alongside the Lewis & Clark coal plant.