Economic Impacts of Hibbard Renewable Energy Center on St. Louis County, Minnesota

Abstract

The M. L. Hibbard Renewable Energy Center (HREC), operated by Minnesota Power in Duluth, Minnesota, is a renewable energy facility that uses waste wood biomass to generate electric power. Originally constructed in 1931, HREC produces roughly 100,000 net megawatt hours (MWh) of electricity annually, some of which is used to operate the power plant itself. The remaining electricity produced is delivered to the grid, the electric power system, where it is used to power homes and businesses in and around Duluth.

Minnesota Power’s 2021 Integrated Resource Plan—which outlines the utility's strategy to meet customer energy needs over the next 15 years—included an order to conduct a baseload retirement study of HREC, considering impacts on host communities, workforce economics, health, system reliability, the environment, and customer costs.

To better understand the economic consequences of a potential closure of the plant, Minnesota Power engaged the Bureau of Business and Economic Research (BBER) at the University of Minnesota Duluth’s Labovitz School of Business and Economics (LSBE) to conduct an economic impact analysis of the facility. This study shows the effects of HREC’s ongoing operations and its planned capital improvement projects on St. Louis County, Minnesota as well as the potential negative economic impacts from the facility’s closure.