On July 29th, 2021, our Board of Directors unanimously adopted a resolution allowing our delegate to approve the Coal Creek Station sale at the Great River Energy (GRE) Special Meeting held the next day. On July 30th, 2021, a significant majority of GRE member-cooperatives adopted the resolution to approve the sale. This action demonstrates the commitment of GRE member-cooperatives doing their due diligence to ensure their members will receive affordable and reliable energy for many years, and the possibility of cleaner energy as a result of the commitment made to carbon capture and storage by the purchaser, Rainbow Energy Center, LLC. History can be made by Rainbow Energy Center, LLC if it is successful in its pursuit of carbon capture and storage on one of the largest scales ever, if not the largest, and it is exciting for us to potentially be a part of that history.
Our Board of Directors did not take the many issues involved with the Coal Creek Station plant lightly, and determined, after careful consideration, that the sale of Coal Creek Station had much more upside than the alternative, which would have been to simply close the plant. The sale of Coal Creek Station and the HVDC system will create additional value for GRE’s member-cooperatives, including but not limited to LREC. GRE estimates the savings from the transaction to be $130 million. Based upon the review and analysis of the information obtained by LREC with regard to the sale of Coal Creek Station, and based upon our Board of Directors and management conducting due diligence regarding the sale, it was our position that the sale of the plant was in the best interests of our members and that the sale would continue to provide reliability and rate stability for a significant amount of time until other sources of energy are made available.
The sale of Coal Creek Station does not in any way demonstrate that LREC and GRE are taking a step back from all the efforts previously made toward cleaner energy. In fact, if the purchaser is successful with its pursuit of carbon capture and storage, the result of such success would likely lead to a significant reduction of CO2 emissions. In addition, GRE will add 900 MW of wind energy by 2023, more than doubling its renewable energy. Finally, GRE is still on track to meet Minnesota’s carbon dioxide reduction goals of 80% ahead of schedule.
We are pleased that GRE continues to evolve its power supply portfolio to best meet the needs of LREC and GRE’s other member-cooperatives. GRE’s new power supply portfolio will serve LREC for decades with cost-competitive renewables and market energy, while retaining a fleet of natural gas and oil-fired peaking plants to ensure reliable electric service.
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. We expect the sale to benefit LREC economically and support us in our ongoing efforts to improve reliability and maintain stable rates for years to come.