BENSON, Minn. – A power plant that is the region’s largest employer and taxpayer may soon shut down in an Xcel Energy move they say will lower their customers’ rates.
The West Central Tribune reports that Xcel Energy is negotiating a purchase of the Benson Power facility. Xcel is hoping to close the 55-megawatt biomass plant, possibly as early as the summer of 2018.
Closing the plant would result in 45 workers losing their jobs directly. Benson City Manager Rob Wolfington estimates that another 50 jobs would be lost from area trucking companies that transport the biomass, the plant burns, reports the West Central Tribune.
The plant primarily burns turkey litter and wood pulp. The litter is provided by Jennie-O Turkey Store, Lango Farms, and a number of smaller independent turkey producers. Wood pulp comes to the plant from logging in northern Minnesota by way of the Laurentian Energy Authority.
In addition to the jobs loss, the tax revenues paid by the plant itself will also hit Benson and the surrounding communities hard. Benson’s entire property tax levy last year was $1.6 million, the plant paid $402,000 of that according to the West Central Tribune.
Xcel’s use of the plant started as a way to fulfill a legislative mandate to produce green energy. The mandate came in 1994 in regarding Xcel’s continuing storage of nuclear waste at its Prairie Island plant, reports MPR. Xcel says biomass fuel now costs up to 10 times more than new wind power does.
“It’s good policy to do away with the biomass mandate, but we can’t let good people be hurt by good policy,” Sen. Andrew Lang (R-Olivia) told the West Central Tribune.
Lang’s state goal is to look out for the people affected by the closing. However, he told the West Central Tribune that the savings Xcel could pass on to its customers presents a compelling case for the Benson plant’s closure.
Xcel claims that the closure of the plant will save its customers between $667 million and $775 million over the remaining 11 years of its contract with Benson power. The company does intend to honor all contracts it has with its vendors, in order to minimize the harm done by the plant’s closure.
“We recognize a plant closure impacts employees, suppliers and the community and we’re committed to working with them through this transition,” Xcel said in a statement.
Xcel will be providing up to $20 million in incentives in an attempt to bring new industries to Benson to make up for the loss of jobs and tax revenue, reports MPR. This is part of an agreement the city of Benson approved on Monday.