A U.S. Iron Ore Mine Faces Shutdown Because Michigan’s Wind and Solar Mandates will Cost it $15 Million Per Month
It’s green energy's Wreck of the Upper Peninsula
The searchers all say they'd have made Whitefish Bay if they'd put fifteen more miles behind 'er. - Gordon Lightfoot in the Wreck of the Edmund Fitzgerald.
When Michigan Governor Gretchen Whitmer signed the state’s 100 percent carbon-free electricity by 2040 mandate into law in 2023, Lisa Wozniak, executive director of the Michigan League of Conservation Voters, claimed the legislation would lead to “lower energy costs for families and small businesses, create good-paying, union jobs and tackle the climate crisis.”
But according to a filing by the Upper Michigan Energy Resources Corporation (UMERC) with the Michigan Public Service Commission (PSC), the exact opposite is set to happen because the crippling costs of complying with the carbon-free mandates will cause electricity bills for families and businesses to skyrocket.
One key business, the Tilden iron ore mine, will face additional electricity surcharges of $8.2 million per month in 2030 and $15 million per month in 2040 under the mandates signed into law by Governor Gretchen Whitmer, according to the regulatory filings.
If nothing changes, Michigan’s carbon-free electricity mandates are destined to wreck the economy of the Upper Peninsula (UP) by causing green deindustrialization in a state that is synonymous with American manufacturing might.
About the Upper Peninsula
Awarded to Michigan after the Toledo War, Michigan’s UP is home to slightly more than 300,000 residents. The local inhabitants are colloquially known as “Yoopers.” Many of them are good, hard-working Green Bay Packers fans; the rest are ok, too.
Throughout its history, the economy of the UP has had a heavy focus on natural resource development. In 1841, Michigan’s state geologist, Douglas Houghton, published reports confirming the presence of vast amounts of copper in the Keweenaw Peninsula. These reports led to a copper mining boom, and prior to the start of the Civil War, the region was responsible for 90 percent of American copper production.
Today, mines, manufacturers, and timber mills are still major employers in the U.P., constituting 14.6 percent of regional private employment. The UP is still home to important mines, with the Tilden Mine being the second-largest iron ore producing mine in the country, and it is also home to the Eagle Mine, the only primary nickel mine in the United States.
The massive increase in electricity prices caused by the carbon-free electricity mandates will almost certainly force these energy-intensive industries to close up shop for good.
Meeting Michigan’s Mandates
Electricity service in the UP is provided by a patchwork of investor-owned, cooperative, and municipal utilities. UMERC is a small, investor-owned utility (IOU), serving 37,500 families and businesses in the company’s UP service territory, which covers many of the Wisconsin border counties and the Tilden facility.
In its filings, UMERC reports that it would need to build 500 megawatts (MW) of wind, 175 MW of solar, and 275 MW of battery storage to meet its 100 percent carbon-free mandates by 2040.
It’s worth noting that the filings by the UMERC indicate that none of this additional generation capacity would be needed to meet consumer demand if not for Michigan’s carbon-free electricity mandates, because the company already has enough power plants to meet the needs of its customers.
Building these wind turbines, solar panels, and battery storage facilities will cost approximately $3.1 billion over the next 20 years. Paying this massive sum will cause extreme financial hardship for the utility’s 37,500 customers.
Paying the Piper
UMERC states that it plans to recover these costs by adding a surcharge to the monthly bills of its customers. The company provides a table in its filings showing the impact of surcharge for each customer class, which you can find on page 19 of this PDF. The cost increases are stunning in the worst way possible.
According to federal data, residential customers served by UMERC spent an average of $79.88 monthly on electricity in 2023. But complying with the mandates will force these families to pay an additional $46.99 per month in electricity bill surcharges in 2030 ($563.88 per year) and $86.91 per month ($1,042.92 per year) in 2040. This means residential customers will see their bills increase by 41 percent in just the next five years and more than double by 2040.
Job creators in the regions would endure even steeper cost increases. Federal data show the average monthly bill for commercial customers, like schools, hospitals, small businesses, and grocery stores, was $405 in 2023. The carbon-free mandates will cause bills to increase by $2,053.63 per month in 2030 ($24,643 per year) and $3,798.59 per month ($45,583 per year) in 2040, meaning power bills will be five times higher in 2030 and nine times higher in 2040.
These businesses will either be forced to pass these costs on to their customers in the form of higher prices for the goods and services they provide, thus causing significant inflation, or close up shop, depriving residents of the Upper Peninsula of their wares altogether.
Large industrial customers like the manufacturers and timber mills discussed earlier would see their monthly bills increase by a jaw-dropping $277,308.32 per month in 2030 and $512,935 per month in 2040, or $3.3 million per year in 2030 and $6.5 million in 2040.
Tough Luck for Tilden
Lastly, the Tilden iron ore mine is the second-largest iron ore mine in the United States, accounting for approximately 16.25 percent of domestic production. Under the green energy mandates, the facility would see its electricity bills increase by $8.2 million per month in 2030 and $15 million per month in 2040.
According to the S-K 1300 report published in 2021 by Cleveland Cliffs, the facility is expected to have a 25-year mine life, producing 7.8 million metric tons of iron ore pellets each year. After accounting for expenses, the mine is expected to cashflow approximately $4.2 billion over the life of the mine, or roughly $167 million per year based on the company’s estimated prices for iron ore.
As a result, the renewable energy surcharge would constitute nearly 60 percent of the mine’s after-tax profits in 2030, and the surcharge would account for 108.5 percent of total profits by 2040.
There is simply no way Tilden could stomach these absurd cost increases, and the mine would almost certainly shut down. According to the Lake Superior Community Partnership, this would destroy 881 family-supporting union jobs for U.S. Steelworkers and more than 2,300 additional jobs created throughout the regional economy as mine workers spend their paychecks at car dealerships, movie theaters, hospitals, schools, and other vital community institutions.
It’s important to remember that while Tilden is the second-largest iron ore producer in the country, the United States is a small fish in a very large pond with respect to iron ore mining.
According to the 2025 edition of the U.S. Geological Survey Mineral Commodities Summary, global iron ore production was 2.5 billion metric tons in 2024, meaning the Tilden mine accounts for 0.3 percent of global production, and the entire United States accounts for less than 2 percent.
Reviving a domestic steel industry will be out of the question if it is too expensive to mine and process the ore in the United States. Forcing mining companies to pay millions of dollars per month in wind and solar surcharges is not a means of creating high-paying, union jobs. It is a recipe for European deindustrialization and creating a Green New Rust Belt in the industrial Midwest.
Conclusion
Michigan’s carbon-free electricity mandates will force residents of the Upper Peninsula to endure massive and unnecessary increases in their electricity bills, along with the economic hardships associated with them, for no discernible benefits.
So, the next time you hear someone parroting the arguments like the ones made by the Michigan League of Conservation Voters about wind and solar mandates reducing costs for families and businesses and spurring the creation of high-paying union jobs, let them know the residents of the U.P. have a bridge they’d like to sell them.
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Truly stunning article 😮 -
Just when you think 🤔 or had hoped that you had heard the last death knell of poor choices, this terrible tale comes to light, yet another decision that sinks industry, people's livelihoods and our national security all in one fell swoop.
And further, to think that the "renewables" will barely last 15-20 years before disposal, which makes this an energy fiasco on par with the Edmund Fitzgerald, yet totally preventable!
Yooper here. Grew up on the Gogebic Iron Range and numerous underground iron mines. All closed in the 1960’s and decimated the economy and it never recovered. Many of those who worked in the mines lamented the closures and commonly said “” best job I ever had”. Like many, I had to leave the UP but I did stay in the mining industry and like those before me, it treated me I know the Tilden Mine well and it will be a shame.