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ELK RIVER, Minn., March 5, 2004 -- Great River Energy will conduct a test burn of subbituminous coal this spring at its Stanton Station power plant in Stanton, North Dakota.
If successful, Great River Energy will enter into a contract with Kennecott Energy Company to purchase subbituminous "Powder River Basin" coal for the plant over a five-year period, from 2005-to-2009.
Great River Energy's current contract to purchase lignite from Dakota Coal Company expires at the end of 2004. The company requested bids from a number of coal suppliers this past summer, and received the most competitive bid from Kennecott Energy Company.
"If the test burn is successful, Great River Energy will use this new source of coal from Kennecott Energy Company because it will help maintain the competitiveness and long-term outlook of Stanton Station. As a result, we will continue to provide jobs and positively impact the economy in this region through the generation of electricity at Stanton Station," says Gordy Westerlind, vice president of power generation.
Great River Energy previously studied the use of subbituminous coal at Stanton Station. The upcoming test burn will verify that the plant is capable of using the higher quality subbituminous coal.
A switch in fuel sources also would reduce severance tax revenues in North Dakota. However, Great River Energy plans to make voluntary payments in lieu of taxes to local government entities over the five-year period.
"Many Great River Energy employees live in the local communities in Coal Country. The services of the county, cities and schools are important and we recognize that. Thus, as a company, we want to provide these voluntary payments to help maintain a good quality of life for our employees and for all residents of Mercer County," says Jim Van Epps, CEO.
Dakota Coal Company has supplied fuel to Stanton Station since the closure of the Indian Head Mine in 1992, and will continue to supply coal through December 2004. Purchases have averaged about one million tons annually.
If the upcoming test burn is successful, Great River Energy will purchase about 800,000 tons of subbituminous coal annually from Kennecott Energy Company's Spring Creek Mine in Montana.
Great River Energy is a not for profit electric cooperative providing energy and transmission services to 28 member distribution cooperatives in Minnesota and Wisconsin. The company also operates Coal Creek Station in Underwood, N. Dak., which uses up to 8 million tons of lignite annually.
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