Energy: A small city in the Midwest looks to return to the past

Some years ago, the City of New Ulm, population 15,872 (metro area 25,820 and shrinking), converted the last of its coal-fired city-owned utility boilers from coal to gas. Now it's attempting to go back to coal.

What happened is that in the early 2000s when natural gas prices were very high, several of the larger employers in the area were complaining to the city that their electricity and heating costs (some businesses in the downtown area are heated by steam generated by the city's utility plant) were much higher than other Minnesota cities. In fact, former city officials have intimated, they were making veiled threats that if their utility rates didn't go down, they would consider moving elsewhere.

So the local utility hired a large consulting company out of Chicago to give it some direction. The consulting company recommended that the city return one of its boilers back to coal generation, which is not surprising since the consultant also builds coal-fired power plants. This was about five years ago.

The plan to convert was initially stopped by citizen action, but the local employers, perhaps reacting to the recent recession, decided to push the city again to cut their energy costs, and thus the conversion plan was resurrected.

Of course, things have changed since the mid-2000s. The price of natural gas has gone down, wind generation in the upper Midwest has increased dramatically (for which the utility has bought futures), and questions about the true cost of coal, taking into account its environmental downside, are finally creeping into planning equations.

Nevertheless, the city and its utility, under pressure from the employers, are maintaining that the coal conversion is still the way to go, and have their proposal before the Minnesota Pollution Control Agency (MPCA) and the U.S. Environmental Protection Agency (EPA) for approval.

Below is an article about the latest rounds in the battle between the city and the conversion's opponents, the mall but feisty Citizens for Clean Energy, which includes two prominent local doctors, and the Minnesota chapter of the Sierra Club, which is lending heft to the fight. — LP

Boiler project has run into EPA changes, organized opposition

January 23, 2011 - By Josh Moniz
Staff Writer, New Ulm Journal

NEW ULM - The City of New Ulm has had mixed results in its efforts to renovate the way New Ulm supplies power.

One of the more controversial aspects of the project has been the Boiler No. 4 coal "conversion" project.

The New Ulm Public Utilities (NUPU) has been the driving force behind the project.

So far, there have been two major road blocks in the project's progress: EPA regulations and opposition groups.

The problem the Environmental Protection Agency (EPA) has posed for the project is changes it made in federal standards for regulating air emissions.

One of the changes was to the method cities use to conduct modeling during permit requests to determine nitrogen dioxide air pollutant levels.

Continued here. More on New Ulm's proposal to burn coal here.

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