HIBBING - The Minnesota Pollution Control Agency on May 28 announced Hibbing Public Utilities paid nearly $27,000 in fines and took corrective measures after it “exceeded emission requirements in its air permit from 2017 to 2020 at its district heating plant.” In response, Luke Peterson, the local utility’s general manager, told the Mesabi Tribune that the HPU’s “precipitators” meant to annihilate dust out of the boilers were not operating at full capacity.

Then, Peterson wrote in an email last Friday to say the HPU had paid fines in the past four years for exceeding emission requirements. “While the fines are another blow to the embattled utility, they are a sign of progress and a step in the right direction,” he wrote.

Also in the email, Hibbing City Councilor James Bayliss, who serves on the HPU Commission, added that the local “problems have been identified and are being addressed.” Both described making changes to comply with state requirements.

Offering more details on the matter, Peterson described how “the boilers contain precipitators which exist to zap the tiny bits of particulate matter that cause emissions.” He continued, “The precipitators function the best when the boilers are operating at their peak—but are less efficient during periods of start-up and shut-downs...Emission reports are chunked into three-hour blocks, and if the reporting time for the measured data includes time when the boilers are coming online, or cooling down, the data doesn’t accurately represent emissions. Precipitators are not designed to work efficiently at lower temperatures.”

“It really comes down to fine-tuning operations,” he wrote. “We are working on doing a better job of running at proper capacity, to ensure that we are within range moving forward.”

The HPU general manager and commissioner are responding to the latest fine after announcing less than two months ago that Texas-based winter storms caused an unprecedented increase in natural gas prices across the country, impacting at least 5,000 gas-paying customers on the Iron Range reporting $200 to $400 jumps in their monthly bills. “This is the highest gas bill ever in Hibbing’s history,” Peterson said during an interview in late April.

In an apparent effort to distance himself from his predecessor, Peterson framed his latest response to the news of the state fine and spike in bills as having “been simultaneously managing inherited issues from prior management and taking proactive steps to make improvements for the community.”

Peterson stepped into his role more than one year after the HPU Commission fired its last full-time general manager, Scott Hautala, in January 2020. At the time, State Rep. Julie Sanstede, DFL-Hibbing and Mayor Rick Cannata confronted Hautala following several blackouts that left thousands of local utility ratepayers without electricity and heat amid below freezing temperatures. They criticized him for a perceived failure to deliver a plan to convert customers from steam to natural gas and questioned whether his utility management mishandled converting customers from steam to natural gas as well as tens of millions of dollars from the 2017 Xcel Energy buyout meant to help the utility pay off debt. (During a commission meeting in 2020, Bayliss made the motion to fire Hautala; he also initiated failed motions to fire HPU’s Finance Director Jean Lane and Electrical Systems Director Dan Chase. Both Lane and Chase still work at the utility, according to its website.)

With Bayliss at his side, Peterson last week noted that “cogeneration” -- producing steam and electricity -- “will bring HPU into a higher level of compliance with the MPCA, but it will take time.”

“The infractions that HPU received from 2017 to 2020 came at the cost of indecisive management decisions, at a time when there was no commitment to make electricity,” he wrote. “Our plant functions the best when we are generating steam and electricity, not just generating steam. We have learned from the past.”

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