Basin Electric's $4B gas plant approved; set to be North Dakota's largest power source

BISMARCK — State officials on Thursday approved what, if built, would be North Dakota’s largest power plant.

The North Dakota Public Service Commission gave the go-ahead to Basin Electric Power Cooperative to construct its proposed 1,470-megawatt “Bison Generation Station.” The project would be built in Epping, a small community in northwest North Dakota near Williston.

Basin’s nearly $4 billion project is expected to be fully operational by 2030.

The plant could help address two energy issues that the region faces — infrastructure constraints on the electric grid and limited natural gas takeaway capacity for companies in the oil-rich area.

Rising electricity demands associated with the state’s recent oil boom and population growth, coupled with power line constraints and not enough local supply, have led some grid operators to refer to northwest North Dakota as the “Williston Load Pocket.” Power demands from the oil industry are rising as well due to electricity being more commonly used in operations.

The plant would provide a huge source of electricity to the infrastructure-constrained region.

Basin’s project also would provide another use for the rising glut of natural gas that is coming out of the state’s oilfields, a phenomenon that occurs as more oil is extracted and the pressure in a geologic reservoir decreases.

Gas is much cheaper than oil, so when companies cannot find a buyer for natural gas associated with oil production, they either have to wastefully flare the gas or decrease output.

The project would also be the first power plant in decades that serves a “baseload,” a term used to describe around-the-clock demands.

Most new sources of electric generation in North Dakota that have been built in recent decades have either been wind or natural gas power plants that use technologies generally designed to meet peak demands.

Officials found that the co-op’s buildout and operation plan would have minimal adverse impact on the environment and welfare of state residents.

During the hearing for the project earlier this summer, some people opposing the plant claimed that its buildout was primarily driven by data center electric demands — the power-hungry facilities hold the physical infrastructure for artificial intelligence, cryptocurrency and cloud computing. Data centers are anticipated to make up a growing portion of U.S. electric demand and are in some instances causing electric rates to rise.

Project opponents argued that the emissions and costs to ratepayers associated with the plant would not justify its need if the power would go to data centers.

Basin officials testified during the hearing that the plant buildout was not driven by data center demand. They said the primary drivers were oil and gas development and other traditional sources of residential and industrial demand growth.

Still, co-op officials have made multiple public comments in the past year noting the large data center-related electric demands that the utility anticipates serving in its region. Officials said that Basin was working with its board to implement a rate mechanism that reduces the financial risk that residential co-op members face when data centers are built within its region.

Utilities make up investment in infrastructure such as power plants through consumer rates. The PSC regulates the siting of energy projects by electric co-op utilities, but not how those are factored into the co-ops’ electric rates. The PSC regulates both infrastructure siting and rates for investor-owned utilities.

Basin is regulated by the Federal Energy Regulatory Commission, though it recently took action that would remove itself from FERC oversight. Basin’s electric rates are otherwise mostly decided by the co-op’s elected board.

PSC officials on Thursday said that the documents Basin submitted indicate that data center demands were not driving the buildout of the power plant.

“What we saw in the application, they indicated that this was something that they had looked at, had been identified even several years ago that it was needed for load growth within their footprint, for their traditional load and oil development within the area,” said Commissioner Jill Kringstad.

Still, data center development is an ongoing issue in the region as companies eye North Dakota for its cold temperatures and cheap electricity.

Commissioner Randy Christmann said he believes the power plant would be needed regardless of data center demands, but the industry may drive future projects.

“If a big data center goes in up there and they end up serving it, well they may need to build another (plant) like this because you need to get that energy from someplace,” he said.