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Big Stone partners kill expansion

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Big Stone partners kill expansion
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The remaining partners in a South Dakota coal-fired power plant that was to provide electricity to Upper Midwestern states announced Monday they were killing the project.

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Big Stone II participants were Central Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services and Montana-Dakota Utilities Co.

Otter Tail Power Co., coordinator of the project, dropped out this summer.

Environmentalists who fought the plant were happy with Monday's announcement.

"This represents the end of our four-year battle to defeat the plant we proved was unneeded, environmentally bad and not the least-cost option for the customers," said Chuck Laszewski of the Minnesota Center for Environmental Advocacy.

The announcement follows almost five years of planning and permitting efforts to expand the existing Big Stone power plant near Milbank, S.D., and build electrical lines needed to distribute power throughout the region.

The power plant would have provided 500 megawatts to 600 megawatts of power for customers of the participating utilities.

When Otter Tail Power dropped out, its officials cited the economic downturn, uncertainty over federal climate legislation and existing federal environmental regulation. All those factors, Otter Tail Power leaders said, resulted in challenging credit and equity markets that made proceeding with Big Stone II "untenable" for Otter Tail's customers and shareholders.

That decision played a key role in the latest development.

"On Sept. 11, Otter Tail Power Co. announced that it was withdrawing from the project," said Missouri River Energy Services CEO Tom Heller in a news release issued Monday. "At the same time, the remaining participants announced that they would need to get commitments from at least one additional utility or it was unlikely the project could proceed. No other utility was able to make that commitment within the established timeframe, so we have elected to wind down the project."

Montana-Dakota President and CEO Dave Goodin said that while it's disappointing that Big Stone II will not be built, the utility has an adequate electric supply for the near-term.

"We have a purchased power agreement through 2015 that was to bridge us to Big Stone II going online; we still have that agreement in place," Goodin said. "We will now look at other supply options that are reliable and cost-beneficial for our customers. We have plans to expand our wind production by 30 megawatts in 2010 and will review other generation options."

Participants include Missouri River Energy Services, which supplies Alexandria (Minn.) Light and Power with most of its power.

ALP was a supporter of the Big Stone II project, which, according to ALP General Manager Al Crowser, would have helped meet the increasing demand for electricity and stabilized future electricity rates.

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Don Davis works for Forum Communications Co., which owns the Alexandria Echo Press and the Bemidji Pioneer.

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Pioneer staff reports
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