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PSC approves Lonesome Creek Station expansion to help meet western N.D.’s energy needs

By Mike Nowatzki 

BISMARCK – The North Dakota Public Service Commission gave Basin Electric Power Cooperative the thumbs-up Wednesday to expand its Lonesome Creek Station near Watford City, while also cautioning that it’s not a long-term solution for meeting the western region’s growing energy needs.

Basin Electric plans to add two 45-megawatt, natural gas-fired combustion turbines at the station’s existing 160-acre site about 14 miles west of Watford City in McKenzie County.

Lonesome Creek Station currently has one turbine of that size, and the expansion will bring its total capacity to 135 megawatts.

Construction of the $102 million project is expected to start in May and wrap up by the end of the year.

Commission Chairman Brian Kalk called it a “very solid project” that’s needed to help Basin Electric meet its peak demand in western North Dakota. But he and commissioners Randy Christmann and Julie Fedorchak also stressed that Lonesome Creek is a peaking plant that operates only at times of high demand and produces electricity at a higher cost.

“This does not displace the need for baseload generation,” Christmann said.

Fedorchak said the additional reliability the expansion will provide is important for both residential customers and the energy industry in western North Dakota.

“The needs in that area are significant for energy,” she said, noting a conservative forecast by Bismarck-based Basin Electric has identified the need for an additional 1,000 megawatts in the near future.

The commission held a public hearing on the project Jan. 28 in Watford City.

An environmental assessment conducted by the federal Rural Utilities Service found that the project “will not have a significant impact on the human environment.”

The new generating units will use emissions-control technology and equipment to reduce carbon monoxide and nitrogen oxide emissions, which will be released through an 80-foot-tall smokestack, according to documents filed with the commission.

In other business Wednesday, the commission voted to file in district court its recommendation on how grain producers should be reimbursed in the insolvency of Earth Harvest Mills Inc. of Harvey.

The commission launched insolvency proceedings against the organic grain warehouse, which was doing business as Dakota Prairie Organic Flour Co., after a producer filed an unpaid grain claim on April 26, 2013. Three days later, a PSC inspector confirmed there was no grain inventory at the Harvey warehouse, and the court appointed the PSC as trustee in June.

Claims filed with the PSC against the company totaled more than $4.3 million.

Commission staff identified seven valid cash claims for a total of $81,000. Because there were no grain assets, those claims will be covered in part with a $50,000 licensing bond filed by the company.

Staff also identified 18 valid credit-sale contract claims totaling $2.4 million. The PSC recommends reimbursing those claimants $949,000 from its indemnity fund because two of the claims exceeded the $280,000 cap on indemnity fund payments.

A hearing is set for May 14 in Wells County District Court, and Christmann said he’s confident the judge will approve the recommendation. The parties will then have 60 days to appeal the judge’s decision, after which the payments will be distributed, he said.

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