Otter Tail Power to close Hoot Lake coal plant, add wind capacity

Otter Tail Power Co., which provides electricity for customers in Minnesota, North Dakota and South Dakota, submitted a plan to state regulators this month that calls for shutting down its older Hoot Lake coal-fired plant near Fergus Falls, Minnesota, and increasing its clean energy initiatives.

As part of a 15-year Resource Plan submitted to the Minnesota Public Utilities Commission, Otter Tail Power will close the Hoot Lake plant in 2021, Brian Draxten, manager of resource planning at Otter Tail Power, said in a recent interview with Daily Energy Insider.

In order to replace that coal-fired generation capacity, Otter Tail Power will build a 248-megawatt simple-cycle natural gas plant in 2021. The location of that plant has not been made public yet, but it will be located at the intersection of a large electric transmission line and a large natural gas pipeline, Draxten said.

In addition, Otter Tail Power will add 200 megawatts (MW) of wind resources – 100 MW in 2018 and 100 MW in 2020. The plan also calls for adding up to 100 MW more wind at a later time.

With its Resource Plan, Otter Tail Power will continue to meet Minnesota’s greenhouse gas reduction goals until 2025, Draxten said.

“That is a big transformation for us,” Draxten added, in terms of the utility reducing its CO2 output.

“Right now, we are one of the higher wind percentage companies in the nation,” Draxten said. “Today we get about 19 percent of our energy from wind. That will rise to 30 percent in the next five years, which is a lot more than our states require.”

Solar is another key element Otter Tail Power’s Resource Plan. The utility wants to add 30 MW of solar resources by 2020 to comply with Minnesota’s Solar Energy Standard, which requires the utility to get 1.5 percent of its energy from solar by that date.

Today, solar would not make it into the utility’s “least-cost plan,” but it continues to get cheaper every year.

“It is our hope that by 2019 that solar resource can also be part of a least-cost plan because the capital costs are getting lower and it is getting more efficient,” Draxten said.

Draxten said that Otter Tail Power’s Resource Plan is a low-cost plan that satisfies three states with widely varying regulatory philosophies.

Otter Tail Power also plans to file its Resource Plan with the North Dakota Public Service Commission and the South Dakota Public Utilities Commission by June 15.

The utility will continue to operate two other coal-fired generating stations.

Otter Tail Power owns 54 percent of the Big Stone coal-fired plant in Big Stone City, South Dakota. The Big Stone plant completed an approximately $380 million new air-quality control system in 2015, the largest project in the company’s history.

Otter Tail is also the 35 percent owner of the Coyote Station coal-fired plant in Beulah, North Dakota.