Minnesota foundry closes over high energy costs, as the state pushes 100% renewable energy

A foundry in Hibbing, Minn., is closing, citing rising electricity rates as the primary reason. Northern Foundry in northeast Minnesota, the Star Tribune reports, will be shutting down and laying off 91 employees.

“Minnesota Power's repeated electricity rate increases ... mean Northern Foundry pays substantially more per kilowatt hour than MTI's other facilities,” the foundry’s parent company, Metal Technologies Inc., said in a statement, according to the Star Tribune.

Minnesota has been pursuing an aggressive effort to transition its electrical grid away from fossil fuels, and last year, the state passed a law committing to 100% renewable energy by 2040. According to Mitch Rolling and Isaac Orr, policy fellows for the Center of the American Experiment, Minnesota Power, the utility that served Northern Foundry, increased its industrial electricity prices 62% between 2009 and 2023, compared to the U.S. average of 18%.

Green energy policies have been hitting industries in other states with decreased electricity supply and rising rates, including a semiconductor plant in New York. Cryptocurrency operations are also under scrutiny due to their high energy demand.

Rolling and Orr estimate the increases cost the foundry about $1.2 million per year, which is about 27% the company’s payroll.

“Hopefully, the loss of the Northern Foundry can serve as a warning sign to policymakers so they understand that enacting the same policies as Europe and expecting different results is a recipe for green deindustrialization,” Rolling and Orr write on the “Energy Bad Boys” Substack.