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One of Minnesota’s largest coal-burning power plants is getting a $430 million upgrade.

The Minnesota Public Utilities Commission (PUC) voted 3-2 Wednesday to approve Minnesota Power’s plan for an environmental retrofit of its largest generator, Boswell Unit 4 in Cohasset, MN.

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The three-year project, to start this fall and expected to employ 500 workers at its peak, will bring the 585-megawatt generator into compliance with state and federal regulations to reduce smokestack emissions of mercury, the utility said.

To pay for the retrofit, the 143,000 customers of the Duluth-based power company face a significant boost in rates. Iron Range taconite producers and other large industrial customers, that consume about 60 percent of the utility’s output, can expect an 8.9 percent rate increase by 2017. Residential customers face a 5.9 percent increase.

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The goal of the project is to reduce the unit’s mercury emissions to 25 pounds a year from 220 pounds. Mercury is a toxic heavy metal that ends up in waterways, resulting in state health advisories to limit fish consumption from lakes and rivers.

WPPI Energy, a power supplier to 51 Wisconsin municipal power companies, owns 20 percent of Boswell 4 and will pay a share of the upgrade cost.

Across the nation, large coal-fired power plants face the prospect of upgrading emissions controls to meet mercury regulations. But the retrofits likely won’t help with looming regulations for carbon dioxide. The Obama administration announced in June it would regulate such greenhouse gas emissions at existing coal plants by 2015.

In Minnesota, a dozen coal plants, mostly smaller units, ended up retired. But large coal burners, like Boswell Unit 4, should keep operating for decades because utilities rely on them as them inexpensive, reliable sources of electricity.

Although some large coal power plants are able to reduce mercury at modest cost, Minnesota Power said Boswell 4 required new scrubbers and other expensive technology. The retrofit also promises to reduce sulfur dioxide emissions by 40 percent, improving air quality in the region.

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