Saying the Legislature was misled about the number of Minnesota workers who would build the Lakefield Junction power plant, Minnesota's construction trades unions are pushing to repeal the property tax exemption the Legislature gave the plant in 1999. The exemption is worth an estimated $575,000 a year.

Legislation backed by the Building Trades unions would remove the tax break for Lakefield Junction unless at least 75 percent of the hourly construction workers are Minnesota residents who receive prevailing wages. The bill is scheduled for a hearing at 4 p.m. March 14 before the Senate's Property Tax subcommittee.

The Minnesota Construction Trades Organizing Association is planning a rally in support of the legislation at 3 p.m. that day in the Capitol rotunda.

Out-of-state workers
Joe Rohrer, chairman of the Minnesota Construction Trades Organizing Association, says the power plant's general contractor - The Industrial Company, of Casper, Wyo. - is using workers primarily from out of state. The plant, under construction near Trimont, is expected to open this year.

'We've been monitoring construction since June,' Rohrer said, 'and about 80 percent of the workers are from places like Colorado, Wyoming, Texas and Mississippi.

'That's 200 Minnesota jobs lost. How many more will we lose in the future if we allow this to set a pattern?'

In addition, he said, the 250 construction jobs at the site are undercutting prevailing wages and benefits. For example, he said, skilled trades workers such as electricians and pipefitters were told they could work as general laborers - at $9 an hour. 'Local standards are way above that,' Rohrer said.

The state's established wages for that area of southwest Minnesota are $13.05 for laborers, $31.60 for pipefitters and $33.13 for electricians.

Few full-time jobs once plant opens
Lakefield Junction is a 540-megawatt, gas-fired 'peaking' plant, which means it will run only during periods of peak electrical demand. Thus, once the plant is operating, it needs only a skeletal crew of three to five full-time workers, according to company statements.

As a result, the Building Trades say, it is construction jobs that provide the bulk of the project's economic benefits.

Tenaska Inc., of Omaha, Neb., and NRG Energy, a division of Minneapolis-based Xcel Energy, were partners in the project at the time the Legislature granted the tax exemption. TIC owns the project during construction; in turn, Great River Energy, of Elk River, has committed to take over the plant upon completion.

'They came to the state asking for a property tax break because the plant wouldn't be feasible without it,' Rohrer said. 'They were quoted as saying the state would benefit from 150 construction jobs. The committee was obviously under the impression the jobs would be filled with Minnesota workers. That's not the case.'

Dick Anfang, president of the Minnesota Building and Construction Trades Council, says similar power plants have received similar tax breaks as Lakefield Junction. He cites Pleasant Valley, a 434-megawatt peaking plant that Great River Energy is building near Sargeant, Minn. 'That plant is being built 100 percent union, 100 percent Minnesota workers,' he said.

'Lakefield Junction is the first plant to turn its back on this state's workers. That's why we want the tax break rescinded.'

This article was written for the March 7 issue of The Union Advocate newspaper. Used by permission. The Union Advocate is the official publication of the St. Paul Trades and Labor Assembly. E-mail The Advocate at: advocate@mtn.org