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Coal plant suffers setback
Two utilities withdrew plans to buy power from the proposed Big Stone II plant on South Dakota's border with Minnesota.
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In a blow to plans to build a big coal-fired power plant in South Dakota 175 miles west of Minneapolis, two major electric utilities backed away Monday from plans to buy power from the proposed Big Stone II.
Their change of heart means the withdrawal of hundreds of millions of dollars for investment in the proposed $1.6 billion plant.
Together, the reluctant former partners -- Great River Energy and the Southern Minnesota Municipal Power Agency (SMMPA) -- would have bought about 27 percent of Big Stone II's 630 megawatts of electricity once the plant was up and running early in the next decade.
A spokesman for the five remaining utilities backing Big Stone II -- a group that includes Otter Tail Power and Central Minnesota Power -- vowed to proceed, probably with a 500-megawatt plant.
"It probably will cause some delay," spokesman Dan Sharp said. "But we're committed to the project. The power is still needed and we're going to go forward."
Beth Goodpaster, lawyer for the Minnesota Center for Environmental Advocacy, a group that opposes Big Stone II, said Monday's developments mean that the project "is stalled for now."It is possible for the Big Stone owners to get substitute investors, but that will take a lot of time, a lot of analysis and a lot of work before the Public Utilities Commission," she said.
A top state official involved in vetting the Big Stone project said much the same.
"It's surprising. It's disturbing. It throws into question the need for another power plant, as it's proposed," said Edward Garvey, deputy commissioner of energy and telecommunications at the Minnesota Department of Commerce.
At the end of August, Garvey and his agency had reached a settlement that seemed to lend momentum for regulatory approval of Big Stone II. The deal centered on project costs, mercury emissions, water use, energy conservation and renewable energy requirements.
But now Garvey said Big Stone II will have to face new rounds of regulatory review -- and questions over whether any plant is needed.
Great River said a new review showed that the utility co-op won't need as much energy. Great River originally anticipated buying about 122 megawatts.
The SMMPA decided it could not commit to buy nearly 50 megawatts of power from Big Stone II in the midst of a lawsuit by the city of Rochester, the largest member of the utility consortium, according to letter from Todd Guerrero, a Minneapolis lawyer representing Big Stone II developers.
The suit involves a purchasing agreement between the city and SMMPA.
Guerrero's letter was filed Monday with the Minnesota Public Utilities Commission.
"We're going to need to set the settlement aside and go ahead and reexamine the need question," Garvey said.
Mike Meyers • 612-673-1746
Mike Meyers • meyers@startribune.com
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