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Hibbing utility credits fuel flexibility with about $1.5 million gas‑cost savings during January price spike
Summary
Mr. Peterson told commissioners that a late‑January cold snap combined with a regional pipeline rupture pushed spot gas prices toward $72 per decatherm and wholesale power near $800/MWh; shifting the plant to biomass and coal saved about $1.5 million and kept average gas costs near the $4.90/decatherm budget, and officials said they will not pass emergency costs to customers.
Mr. Peterson, a staff member, told the commission that Hibbing’s utility avoided large market costs during a late‑January cold snap by switching the power plant from natural gas to biomass and coal. He said the move saved the utility about $1,500,000 and kept the system’s average gas cost near the budgeted figure of about $4.90 per decatherm.
Peterson said the city faced temperatures near 30 below and a regional supply shock caused by a pipeline rupture in Willow River that left the Carlton, Minn., compressor station operating at roughly 30% of normal capacity…
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