Fergus Falls, Minn.-based Otter Tail Power Co. said Monday it plans to build a natural gas-fired generator in eastern South Dakota, which will help make up for the planned closure of a coal-fired power plant in its hometown.

The company will invest about $165 million for the 250-megawatt plant, which will be located near Astoria, S.D., about 150 miles south of Fergus Falls. A megawatt is 1 million watts, and by that metric, Otter Tail is building a medium-sized plant.

Otter Tail, Minnesota's third largest investor-owned utility, has planned to retire its Hoot Lake coal-fired plant in Fergus Falls by 2021. The Hoot Lake plant, which has two generators built in 1959 and 1964, runs intermittently nowadays, providing power at peak demand times.

Power generated at Hoot Lake also will be partly replaced by a 150-megawatt wind farm in southeastern North Dakota, more than doubling the utility's wind capacity. The $250 million wind farm, announced in November and expected to come on line in 2021, is Otter Tail's largest ever capital project.

Otter Tail provides electricity to 130,000 customers in Minnesota, North Dakota and South Dakota. It owns significant stakes in two other coal-fired power plants, the 256-megawatt Big Stone Plant in South Dakota and the 150-megawatt Coyote Station in North Dakota. Both are "base load" plants, almost always churning out power.

The new gas-fired plant at Astoria, which will feature a simple-cycle gas combustion turbine, will be a peaking plant, supplementing power produced at Otter Tail's planned wind farm in Merricourt, N.D. Natural gas-fired plants emit half as much greenhouse gases as coal-fired plants. The plant must get regulatory approval. Otter Tail expects the generator will go online in 2021, and employ three to five people. The Hoot Lake plant employs about 40 people.

The Astoria plant would be located near the intersection of the Northern Border natural gas pipeline and the Big Stone South-to-Brookings 345-kilovolt electric transmission line.

South Dakota accounted for almost 8 percent of Otter Tail's electricity revenue in 2016; North Dakota and Minnesota respectively represented 48 percent and 34 percent. Transmission sales accounted for the remaining 10 percent.

Mike Hughlett • 612-673-7003