Rainbow Energy Center, LLC has reached an agreement to purchase Coal Creek Station from Great River Energy (GRE) and operate the 1,151-megawatt (MW) power plant using current plant employees hired by Rainbow Energy Center, LLC. Nexus Line, LLC will purchase the high voltage direct current (HVDC) transmission system that extends between central North Dakota and Minnesota from GRE. GRE will operate and maintain the HVDC system under a 10-year contract. Rainbow Energy Center, LLC and Nexus Line, LLC are affiliates of Rainbow Energy Marketing Corporation of Bismarck, North Dakota. As part of this agreement, GRE will enter into a power purchase agreement with Rainbow Energy Center, LLC. The GRE Board of Directors approved these agreements at its June 30th, 2021 meeting.
Lake Region Electric Cooperative (LREC) is pleased that GRE continues to evolve its power supply portfolio to best meet the needs of LREC and GRE’s other member-owner cooperatives. The commitment of the purchaser, Rainbow Energy Center, LLC, to pursue carbon capture and storage at the plant is good for the environment, good for the employees at the plant and adjacent mine, and good for nearby communities. A June 30th report from the White House Council on Environmental Quality stated that carbon capture will likely play an important role in decarbonization efforts globally.
The sale of Coal Creek Station and the HVDC system will create additional value for GRE’s members, including, but not limited to, LREC. GRE estimates the savings from the transaction to be $130 million. The closing of the sale of Coal Creek Station and the HVDC system is expected later this year, after required approvals are obtained.
GRE is building a power supply portfolio that will serve LREC with clean, affordable, and reliable energy for decades. GRE’s new power supply portfolio will serve LREC with cost-competitive renewables and market energy, while retaining a fleet of natural gas and oil-fired peaking plants to ensure reliable electric service. In addition, GRE will add 900 MW of wind energy by 2023, more than doubling its renewable energy. Finally, GRE will meet Minnesota’s carbon dioxide reduction goals of 80% ahead of schedule.
Although purchasing power from Rainbow Energy Center, LLC was not in GRE’s original plans, it will serve as a reliable steppingstone as GRE transitions its power supply. I will continue to monitor the actions being taken with regard to the Coal Creek Station transaction, and I will keep all of you, the members of LREC, posted with any new information that is made available moving forward. As always, LREC is committed to diligently working to provide safe, reliable, and affordable electricity for its members.