Montana-Dakota Utilities announces plans to retire three coal-fired electric generation units

Montana-Dakota Utilities, an MDU Resources Group, Inc. subsidiary, announced Tuesday that it plans to retire three coal-fired electric generation units at two location in the next two to three years and build a new simple-cycle natural gas combustion turbine.

The availability of low-cost power due to low-cost natural gas and increasing wind resources, along with the rising costs of operating the facilities, led to the decision to retire the coal plants.

The company expects to retire Lewis & Clark Station in Sidney, Montana around the end of 2020 and retire units 1 and 2 at Heskett Station in Mandan, North Dakota near the end of 2021. The expected retirement dates may be affected by the company’s coal supplier’s pending bankruptcy proceeding.

The company has begun the development process of constructing an 88-megawatt simple-cycle peaking unit at the Heskett Station site. It expects to submit an advance determination of prudence request with the North Dakota Public Service Commission in the fall.

Montana-Dakota selected the new generation resource as part of its IRP. The company noted that it believes a second combustion turbine at Heskett will be cost-effective due to the site’s existing infrastructure and natural gas supply, which serves an existing combustion unit that began operations in 2014. The cost of building and operating a new simple-cycle combustion turbine, along with market purchases, is expected to be approximately half the total cost of continuing to operate the Heskett and Lewis & Clark coal-fired units.

“Our main objective is to provide our customers with safe, reliable and low-cost service,” Nicole Kivisto, president and CEO of Montana-Dakota, said. “The IRP process helps guide us in making decisions to meet those objectives. Heskett and Lewis & Clark have met that objective for many years, but our analysis is showing those units are no longer cost competitive for our customers.”

Montana-Dakota currently employs 77 people at the two coal stations. The company expected that it will need approximately 10 employees to operate the two natural gas-fired combustion turbine units at Heskett and the two natural gas-fired reciprocating internal combustion engines at Lewis & Clark. The company plans to maintain staff until the retirements and offer training for employees who want to fill open positions in other areas of the company.

The first coal-fired unit at Heskett began operations in 1954 and the second unit went online in 1963. Together, they provide 100 MW of power. Lewis & Clark Station began operations in 1958 and provides 44 MW of power.