MPR: Jobs down, energy up

Jobs down, energy up
By Marisa Helms, Minnesota Public Radio
October, 2001

Even before the terrorist attacks on New York and Washington, concern over the nation's electricity supply as a potential drag on economic growth was on the rise. Some Minnesota business leaders have been warning that power production in the state may not keep up with growing demand over the next 10 to 15 years, and that could harm Minnesota businesses future competitiveness. Now there's a new worry: maintaining the security of the power grid against potential terrorist attacks.

MPR reporter Marisa Helms (above) toured the PolarFab production facility and got a taste of the New Economy's thirst for energy. See her slideshow.

Since the September 11th terrorist attacks, power plants across the nation have been on a heightened state of alert. Scenarios involving threats to the country's power grid are being taken very seriously, and Minnesota with its two nuclear power plants has extra cause for concern.

Maureen Brown, a spokesperson for Nuclear Management Company, which operates six nuclear power plants in the Midwest, including the Monticello and Prairie Island facilities, says the firm is prepared for all contingencies. "We have armed and expertly trained security forces, who are on maximum alert and at maximum security to thwart any type of terrorism at our plants, and I would add that we are prepared every day to prevent any type of incursion.

Brown says the U.S. military and FBI are on call to respond to any threat. But she says all measures are precautionary and there have been no specific warnings.

Even before September 11th, Midwest utilities were already grappling with potential supply interruptions unrelated to public safety.

"This year, we're very concerned as we look out over the future, about the ability to actually have enough plants and enough transmission capacity to supply our customers' long-term needs," according to Kevin Lawless, managing director of retail services for Xcel Energy, Minnesota's largest utility.

Lawless's worries are shared by other utilities in the upper Midwest. Power companies in Minnesota, six other states, and the Canadian provinces of Manitoba and Saskatchewan jointly operate the regional grid, known as the Mid-Continent Area Power Pool, or MAPP.

Recent MAPP projections indicate that in just five years, the region's energy supplies may be overtaken by demand. Planners typically say it's necessary to maintain at least 15 percent more capacity than estimated peak demand, and MAPP says the margin will fall below that level by then.

"Because terrorism has come to the United States, that may make some businesses wonder if they shouldn't have their own means of generating electricity."

- Bill Blazar
Minnesota Chamber of Commerce

Despite the sharp slowdown in the economy and the increased possibility of a recession in the next few months, MAPP says it's not revising its projections downward.

If the group is correct, Minnesota businesses could be left in the dark with increasing frequency, and that could mean big financial losses for customers like PolarFab, which operates a semiconductor plant in Bloomington.

PolarFab's Facilities and Engineering Manager Andrew Cormack says with tens of millions of dollars worth of equipment running 24 hours a day, even a brief outage is expensive. Cormack calls major blackouts at PolarFab rare, but on September 11th, he says the factory abruptly went dark.

"The day of the terrorist attacks, we had a 12-minute power outage at our plant in the evening and it caused a lot of consternation with our employees. People were scared," he says. As it turned out, the blackout resulted from an equipment breakdown at nearby power substations.

Cormack says the episode cost the company at least $100,000 in ruined materials and lost productivity.

Polarfab's loss is but a hint of the hit California businesses are taking in the wake of that state's power crisis last spring, and some experts in Minnesota are warning the state needs to take action now to prevent California's present from becoming our future.

Xcel Energy says building more power plants is only part of the answer. The utility's Kevin Lawless adds there's also a need for more power lines. "If insufficient transmission capacity exists, we're going to have issues of getting energy to customers and that will drive prices somewhat upward."

And that's a big worry for the state's businesses, says Minnesota Chamber of Commerce Vice President Bill Blazar. "Nobody, whether you're making taconite or processing health-care claims, can afford to have a blackout. Nor can you afford to have your electricity price any higher than your competitors. It's a major input and it's got to be reliable, and it's got to be competitively priced," according to Blazar.

Blazar says opening the electricity market to competition is the only way to lure investors to spend the hundreds of millions of dollars it takes to build up the state's electricity infrastructure.

The Chamber proposed a deregulation bill during the last legislative session, but lawmakers instead passed competing legislation that raises conservation goals and streamlines procedures for building power plants and transmission lines.

Many environmentalists believe a more sensible route to the energy future involves encouraging businesses to build small, on-site generators, fueled by clean and renewable sources like wind or solar power, and, down the road, fuel cells that run on hydrogen. Dubbed distributed generation, it's an approach that's gaining converts around the world.

The latest report from the Mid-Continent Area Power Pool says the region will have adequate power reserves through the summer of 2006. The new figures show capacity being short 3,500 megawatts of meeting the required 15-percent reserve by 2010. See larger graph.

Michael Noble, executive director of Minnesotans for an Energy Efficient Economy, says any energy policy based on building hugely expensive power plants with long transmission lines to customers is outdated, and potentially a public safety hazard. "It's just logical that if you have all your energy eggs in one basket and that basket is 100 miles away and costs billion dollars and 10 years to build it, then that's more vulnerable and more exposed than having 1,000 little power systems on every rooftop every basement or every community," according to Noble.

Distributed generation has been embraced by the state. Minnesota's new Energy Security Law directs the Public Utilities Commission to develop standards and procedures for operating distributed generation systems.

Business lobbies are also taking a look. The Chamber's Bill Blazar says his group has scheduled a series of seminars for its members to introduce the new technology. He says as fuel cells become cheaper and more efficient, they could be a viable way to keep the state's businesses competitive.

"Because terrorism has come to the United States, that may make some businesses wonder if they shouldn't have their own means of generating electricity. Can we rely on central power plants as we have for the last 50, 60 years?" Blazar says.

Minnesota companies will have to ponder that question over the next few years. And it's entirely possible they may find that the pursuit of energy security leads them to become producers of not just semiconductors or steel, but also their own power supply.

For More Information

This Cold House, MPR's online project on energy.

	Sign up to receive e-mail newsletters

	Audio help

	Text: Sm : Md : Lg