by Larry Salmela

Greetings to all members of the North Itasca Electric Cooperative,

Thank you for attending the annual member meeting of the co-op.  The co-op exists for the benefit of the members, and that includes you and me and virtually everyone here today.

The challenge in front of the board at every Annual Meeting is to help you understand the big picture of the cooperative’s business and the long-term challenges and opportunities in front of us.  This time we will discuss challenges for our community from an unexpected development in the not-too-distant future.  The entire electric power industry across the nation is facing huge challenges as the nation comes to grip with the global climate change implications of burning large quantities of fossil fuels for industrial purposes beginning in the mid-1800s and continuing through the entire history of the Industrial Revolution.  The federal and state governments have recognized the implications of burning fossil fuels for almost two centuries, and they have concluded that the burning of fossil fuels must be greatly curtailed.

That statement upsets many people because not everyone agrees with the government’s conclusions.  Politically we see a lot of pushback, which we can expect will continue; but the bottom line is that the movement toward renewable energy sources and less fossil fuel utilization will continue.

A local agency you’ve probably never heard of, the Itasca Economic Development Corporation, has begun a

series of community meetings about the topic of Energy Transition.  I attended the meeting at the Bigfork City Hall on May 14.  The term “Energy Transition” can mean many different things, and it took me a while to understand what the IEDC had in mind under this big term.  I learned that the state has a program to administer financial grants to help communities to deal with the effects of fossil fuel power plant closures.  The state’s Department of Employment and Economic Development (DEED) is responsible for this grant program.  Well, why are they having such a meeting here in Bigfork?  There is no power plant here. 

Wes Waller and I attended the meeting in Bigfork on May 14.  CEO Brad Dolinski attended the same meeting presented the next day at the Sand Lake Community Center, and three of his staff at the co-op attended with Wes and me in Bigfork.  North Itasca Electric Co-op was well represented, and several other community members were there.

As I arrived, I did not understand very well what the meeting was about, but I learned later that the series of meetings across Itasca County was most concerned with the implications of the reduction and eventual cessation of coal burning at the Boswell Energy Center in Cohasset.  The Boswell plant is owned by Minnesota Power.  Why should we at North Itasca Electric bother when the changes will happen at Boswell which has no direct business relationship with North Itasca Electric and is located an hour away from here?

There are several reasons to be concerned.  First, let’s remember that electricity distribution nowadays is based on the concept of the grid.  Electric power generating plants feed energy into the grid at various points, and consumers such as you and me and everyone in this room take our power from the grid.  At the end of the day, none of us really knows what percentage might have actually come from Boswell, or a nuclear power plant near the Twin Cities, or a wind farm out on the prairie somewhere, or from a hydroelectric generator in northern Manitoba.  We don’t know, and we really don’t care as long as it gets to our homes and businesses because that’s where it’s important to you and to me. 

Boswell will eventually stop burning coal, and I might even live to see that day.  When Boswell stops burning coal, then what?  And do we care?  Yes, we certainly do care because it could be natural gas for a while; but natural gas, while cleaner than coal, is still a fossil fuel.  Natural gas for electric power generation will eventually be eliminated.  Beginning in the 2030s the fuel choice at Boswell might be something else, maybe even wood chips.  The potential problem for the electric power industry, the regulators and our local community is to be sure that there will be enough power in the local grid under all weather conditions.  Great River Energy currently has plans to build a new high voltage transmission line from southern Minnesota up to approximately Cohasset because more power will be needed in this area of north-central Minnesota.  The completion of that line is very important to make sure enough power will be available here.

The second reason to be concerned about the changes at Boswell is the property tax base in Itasca County.  The Boswell Energy Center is a high value property, and the company pays a significant portion of the property taxes both in Itasca County and in Independent School District 318.  When the valuation of Boswell changes, probably to a lower valuation, the tax load will shift to all other property owners in the county and ISD 318.  Those changes will affect everyone in this room.

The third reason is related to employment.  What will happen to the number of jobs at the Boswell site?  The people employed there are economically active in Itasca County.  They buy cars and trucks, groceries, fishing and hunting gear and all sorts of other stuff.  Their spending supports our retail community.  For generations the younger people in Itasca County have looked to Cohasset for potential job opportunities.

The State of Minnesota saw the economic effects coming, and they created the Energy Transition Grant Program.  I pulled the following information from the DEED website:

The Energy Transition Grant Program helps communities address the impact of a power plant’s closure as the state moves toward renewable energy sources. The program provides funding for towns to research, plan and implement activities designed to:

• assist workers at the plant find new employment, including worker retraining and developing small business startup skills; 

• increase the community’s property tax base;

• develop alternative economic development strategies to attract new employers to the community; and/or

• produce site readiness plans, land use studies and long-term economic planning and impact studies.

As I noted earlier, the IEDC is coordinating a series of community meetings to discuss the Energy Transition.  These meetings are open to all interested people.  Now that you know about the pending changes and the implications of those changes, you may wish to become involved with the Energy Transition Grant Program.  We at the co-op can help you to get in touch with the IEDC.  Just let us know.

Thank you for your attention.