Plan for coal-fired plant in South Dakota shelved after 4 utilities drop out

  • Article by: TOM MEERSMAN , Star Tribune
  • Updated: November 2, 2009 - 10:59 PM

The Big Stone II project has been at the center of an environmental debate since it was announced in 2004.

A power plant ran out of steam Monday as developers announced that they have decided not to build the $1.6 billion Big Stone II project near South Dakota's border with Minnesota. The joint announcement by four utilities brings to an end one of the larger environmental debates in the state in recent years because of mounting public concerns about global warming and energy policy.

Seven utilities were partners when the 500- to 600-megawatt coal-fired plant was announced in 2004, but three dropped out.

The lead utility, Otter Tail Power Co., withdrew from the project in September, citing uncertainty about future carbon dioxide costs and regulations, and the poor economy.

The four remaining partners issued a statement Monday giving the main reason for the cancellation: "The project required additional participants to move forward; however, none have committed."

One of the remaining partners, Montana-Dakota Utilities Co., said that it was disappointed with project's demise, but that it has enough electricity for its customers for the near future.

"We have plans to expand our wind production by 30 megawatts in 2010 and will review other generation options," said Montana-Dakota President and CEO Dave Goodin.

Environmental groups opposed the project before South Dakota and Minnesota regulators. The plant was proposed for Milbank, S.D., a few miles from Minnesota, and included high-voltage power lines into western Minnesota.

Beth Goodpaster, staff attorney for the Minnesota Center for Environmental Advocacy, which fought the proposal for years, said she wasn't surprised the utilities gave up. They may have thought originally the project made economic sense, she said, but one by one they learned that it does not.

"We're really glad that the Big Stone coal plant has stepped out of the way of the renewables that do need to get to market and are cheaper," she said.

The three other utilities that abandoned the project on Monday were Central Minnesota Municipal Power Agency, Heartland Consumers Power District and Missouri River Energy Services.

Tom Meersman • 612-673-7388

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