Great River Energy will need Mower County’s help if it can locate a combustion turbine facility in northwest Pleasant Valley Township.

Monday, August 02, 1999

Great River Energy will need Mower County’s help if it can locate a combustion turbine facility in northwest Pleasant Valley Township.

How much help? Answer: at least $7 million in a single year.

How would it get that help from Mower County? Answer: The Mower County Board of Commissioners would have to recommend and the Minnesota Legislature would have to approve a personal property tax exemption on utility equipment.

"The personal property tax exemption could be a lot of money," said Craig Oscarson, county coordinator, who will explain the GRE proposal to the county board of commissioners. "It’s not an exemption on real estate taxes. It’s a personal property tax exemption and they feel they cannot compete unless they get that exemption."

The Martin County Board of Commissioners endorsed a similar request and last year, the Minnesota Legislature approved that request, paving the way for Lakefield Junction to begin construction of the only other major generating plant planned for Minnesota.

Northern States Power Company has sought such an exemption for years, but never received one.

A meeting was held in Austin two weeks ago to explain the GRE proposal to Pleasant Valley Township officials and Mower County planning and zoning and other staff.

The news was a shock for Pleasant Valley Township officials. The township is located in the northeast corner of the county bordered by Sargeant Township to the west and Racine Township to the east and Grand Meadow Township to the south. Olmsted County borders on the north.

A 16-inch EURON natural gas pipeline runs west to east atop the northern tier of townships in Mower County. The GRE facility would also be located near the NSP high voltage transmission line in the area.

GRE proposes to construct and operate a combustion turbine peaking facility, comprised of three natural gas combustion turbine-generators and related equipment.

The CTs will convert natural gas into electricity via a simple cycle process in which a compressor furnishes large quantities of air to combustors in the turbine.

The combustion process causes the turbine rotor to rotate, driving both the compressor and an electric generator.

The generator produces alternating current at 13,800 volts. Within the plant substation, the voltage is increased via transformers to the voltage of the transmission system to 345,000 volts which is the voltage of the NSP north-south transmission line and to 161,000 additional volts.

GRE plans to acquire the site this summer, obtain all permits by next spring and commence construction, also in the spring of 2000.

The initial start-up would take place in the fall of 2000 with commercial operations in the winter of 2001.

According to local officials and staff, GRE made it clear it needs the support of Mower County to bring the project to fruition.

"The personal property tax on utility equipment in this state makes Minnesota a rather onerous place to site new generating facilities," said Kandace Olsen, communications manager for GRE.

The facility is expected to cost up to $160 million and GRE would pay the real estate property tax on the plant and personal property tad on the new gas line and transmission improvements. Estimates suggest this could run from $500,000 to $600,000 per year.

GRE, which is based in Elk River, now covers about 70 percent of Minnesota with a 16,000 megawatt generating system, using a combination of oil, wind, coal, drug refuse and other renewable sources of energy.

The new 455 megawatt natural gas-fire generator would serve customers in Minnesota and Wisconsin.

The company wants the township to endorse its exemption from personal property taxes and Mower County to do the same before it takes the request to the Minnesota Legislature in 2000.

"We won’t find out any more information for some time," said Briese, the Pleasant Valley Township board chairman. "They need a lot of permits and that could take a long time."

"In the meantime, the township board will study the request. Something like this hasn’t happened here before," he said.

Oscarson said the county commissioners will take the request under advisement after they hear a presentation on the GRE proposal this month.

Pleasant Valley is one of the least-populated townships among Mower County’s 20 townships. A portion of Interstate 90 slices through the southeast corner of the township and it has no population centers within its borders.

What does Briese think of the proposal? "I think it’s good, but I don’t know how good," he said.

The Associated Press contributed to this report.