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Electricity bill hikes a possibility this winter as coal supplies remain depleted

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Minnesotans could be set for electricity bill hikes this winter as coal stockpiles remain uncomfortably low at the state's biggest power stations because of continued rail delays.

Energy companies expressed concern last month that reliability issues with the railroads were affecting coal stocks, and the St. Cloud Times reported on Thursday that coal levels remain significantly low as the winter weather arrives.

Officials at Minnesota's largest power station, the coal-fired Sherco plant in Becker, told the Times its inventories are "significantly below optimal levels" and said stockpiles had not recovered sufficiently despite a more consistent rail service in October.

Coal power generates almost half of the electricity used in Minnesota, and MPR reports a lack of coal supply could lead to energy companies buying electricity from other providers to meet demand – with the cost potentially passed on to customers.

Just last week, Gov. Mark Dayton, and Sens. Al Franken and Amy Klobuchar urged the national energy regulator to force BNSF Rail to fix its coal delivery issues to prevent possible bill rises for Minnesotan consumers this winter.

In a joint statement, they said: "BNSF's service failures are driving up the cost of electricity and pose significant threats to electric system reliability."

The struggle to stay online

While Xcel Energy told the Times its Sherco plant – which burns three trainloads of coal every day – should remain open throughout winter, others have been forced to go offline as they desperately stockpile supplies for the cold months ahead.

In September, Minnesota Power announced it would be taking two units at its Hoyt Lakes plant and two at its Taconite Harbor facility offline for three months because of rail supply problems, energy industry website Platts reported.

But while a lack coal supplies could spell pricier bills for electricity customers, heating bills are expected to fall as this winter is expected to be milder than the last, according to

Widespread woe at rail reliability

The energy industry is just the latest to express dissatisfaction with the railroad system this year, which has resulted in a backlog caused by the continued output of oil from the Bakken fields in North Dakota, along with a record grain harvest across the country.

Demand for grain shipping saw costs increase from $750 per car average a few years ago to more than $6,000 this year, costing Minnesotan farmers an estimated $100 million.

The Minnesota Farmers Union criticized the rail system, saying it showed favoritism toward the oil industry which caused delays for grain trains, the Star Tribune reported.

The construction industry has also suffered, with FOX 9 reporting building firms have struggled to get concrete supplies in via the rail system at a time when demand is high because of multiple ongoing building projects, such as the new Vikings stadium.

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