MN: DEED Awards $1.4 Million in Energy Transition Grants to Granite Falls, Fergus Falls

The Minnesota Department of Employment and Economic Development (DEED) announced nearly $1.4 million in grant funding to support economic development in two Minnesota towns where fossil fuel power plants recently closed.

Granite Falls ($750,000) and Fergus Falls ($640,250) received the grants from DEED’s Community Energy Transition Grant program, which helps communities around Minnesota plan for and manage the economic and social impact of a local power plant’s closure.

“The Community Energy Transition Grant program is one of the ways DEED is delivering support and financial resources to Minnesota communities when they need it most – including when local power plants close,” said DEED Commissioner Matt Varilek. “DEED is proud to partner with Granite Falls and Fergus Falls as they craft economic development strategies to increase their tax bases, create new jobs and build housing in the wake of their power plant closures.”

Granite Falls plans to use grant funding to improve local water main access, a project that will help the town provide a stable water utility to 25 new housing development lots and a new community hospital, and support businesses in the city’s industrial park. DEED’s grant will support the city’s long-term economic development strategy to grow the tax base and create new jobs after a power plant closed there in 2009.

“The Community Energy Transition Grant is critical for helping communities such as ours move forward after energy plant closure impacts,” said Granite Falls City Manager Crystal Johnson. “Specifically with Granite Falls, this funding will assist the city by installing much needed utility infrastructure to help new and existing businesses within our community. The City of Granite Falls values the partnership with DEED and the award from the Community Energy Transition Grant program.”

Fergus Falls plans to use grant funding to purchase an industrial site along the Otter Tail River near downtown Fergus Falls in order to demolish the existing buildings and remediate the site for redevelopment as multi-phased workforce housing. Over the years, and despite its location in a dense residential neighborhood, the 8-acre site has been a foundry, lumber yard and retail center. It now sits as industrial storage. A coal-fired power plant further east down the Otter Tail River closed in 2021, changing the city's economic landscape and necessitating a shift in development priorities to include support for workforce housing.

“The City of Fergus Falls appreciates partnering with the State to support communities that are navigating the loss of fossil fuel power plants,” Fergus Falls Mayor Ben Schierer said. “With the closing of a coal-fired power plant in Fergus Falls in 2021, we are doing our best to fill the lost revenue through other development. Access to funds like those offered through the Community Energy Transition Grant program has given us here in Fergus Falls a unique opportunity to implement creative development techniques to fill the economic gaps that are the result of our local energy company's shift to new energy sources."

“As Minnesota increasingly moves to cleaner forms of power, local communities with fossil fuel power plants can rely on DEED to help them weather this energy transition,” said Carla Vita, Director of DEED’s Energy Transition Office. “State and local partnerships like these are a model for making sure communities around Minnesota have strong and growing economies, no matter the circumstances.”

The Energy Transition Grant Program helps communities address the impact of a power plant’s closure as the state moves toward renewable energy sources. The program provides funding for towns to research, plan and implement activities designed to: 

• assist workers at the plant find new employment, including worker retraining and developing small business start-up skills;
• increase the community’s property tax base;
• develop alternative economic development strategies to attract new employers to the community; and/or
• produce site readiness plans, land use studies and long-term economic planning and impact studies.

It also activates Minnesota's Environmental Quality Board to reimburse some costs associated with helping communities address regulatory issues, provide consultation on technical and regulatory challenges and educate the community on transitions. 

Lawmakers provided DEED with $10 million for the Energy Transition Grant program over the 2024-25 biennium. DEED will open additional grant rounds in the months ahead.