MN Power Ordered to Continue Investigating Alternatives to New Gas Plant

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ST. PAUL, Minnesota — Today, the Minnesota Public Utilities Commission (PUC) rejected Minnesota Power’s request to build a costly new gas plant to meet future energy demand and ordered the electric utility to continue investigating alternatives that would maintain grid reliability.

Clean Energy Organizations (CEOs) — including Clean Grid Alliance (CGA), Fresh Energy, Minnesota Center for Environmental Advocacy (MCEA), and Sierra Club — applaud the PUC’s decision, which puts affordability first by ensuring Minnesota Power’s customers are not locked into paying for a costly new gas plant without exploring more cost-effective options.

“The regulatory process worked here, and we applaud the Commission for its decision,” said Will Mulhern, Director of Electricity at Fresh Energy. “Our analysis, built on the utility’s own numbers, found no case for locking in a new gas plant nine years before it’s needed — especially when gas construction and operating costs are at an all-time high. Today’s decision directly reflects Fresh Energy and the CEO’s data-driven recommendations and advances a clean energy transition for Minnesotans.”

“Minnesota Power claimed private equity ownership would help fund its clean energy transition, but even with BlackRock backing it, the company is still proposing new fossil fuels. A clean energy transition is critical to preventing record-breaking heat waves and wildfire smoke from becoming Minnesota’s new normal, and the Commission’s decision to investigate gas plant alternatives is a step toward keeping that transition on track,” added Margaret Levin, Director of Sierra Club’s North Star Chapter.

Minnesota Power included its gas plant request in its latest long-range energy plan, submitted to the PUC for consideration in March 2025 and revised in January 2026.

The CEOs submitted an alternative to the utility’s proposal that was cleaner, cost-competitive, and equally reliable in meeting the utility’s long-term energy needs. The alternative plan was informed by expert analysis from Energy Futures Group and Synapse Energy Economics. The CEOs highlighted it as a better path forward than the utility’s proposal, which would require ratepayers to pay for a new gas plant at a time when gas plant prices have skyrocketed from data center demand. At the CEOs urging, the PUC ordered Minnesota Power to take near-term actions to build additional clean resources beyond what the utility proposed.

The PUC’s decision preserves more options for Minnesota Power to comply with the state’s 100% carbon-free energy law, which requires electric utilities to provide 100% carbon-free electricity to their customers by 2040. Minnesota Power’s proposal to build a large gas plant in the year 2035 would have required the utility to procure carbon offsets or install costly carbon capture systems in order to achieve compliance with the law. In contrast, alternatives like clean energy offer a straightforward compliance pathway.

“The Commission’s decision is the right one for the climate,” added Amelia Vohs, Climate Program Director at MCEA. “Minnesota Power’s proposal to build a giant new gas plant only 5 years before the state’s 2040 law deadline and then buy offsets doesn’t make sense. This summer we felt the effects of a warming climate. We can no longer afford to build new projects like this one with significant emissions without exploring all other options.”

Today’s decision to deny the gas plant ensures that a resource that isn’t needed for another nine years is not approved prematurely. Given the rapid evolution and expected cost declines of new technologies, such as long-duration batteries, committing to a gas plant now could preclude using a cleaner technology that may be economic just a few years from now, but well before the need for the gas plant in 2035.

“Investigating all possible solutions, instead of approving a large gas plant that isn’t needed for another 9 years, is the most prudent decision,” said Emily Piontek, Regulatory Associate with Clean Grid Alliance. “Advanced clean technologies are increasingly available and could become cost-effective alternatives to this gas plant in time to fill Minnesota Power’s capacity need.”

In addition to investigating alternatives to the proposed gas plant and building new clean energy resources, the PUC’s order requires Minnesota Power to improve transparency around large loads like data centers that are coming into its service territory, better utilize energy efficiency and demand response in future planning, and implement several provisions aimed at improving its supplier and workforce diversity practices.

CEOs’ alternative plan and detailed findings are contained in their comment filed April 20, with the PUC in the Minnesota Power Integrated Resource Plan docket. Investor-owned public utilities in Minnesota must submit plans every two years that outline how they aim to meet their energy demands for the next 15 years.

News release from Sierra Club.