Big Stone II

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The Big Stone II electrical power plant, was set to be constructed next to an existing power station near Milbank, S.D. but was abandoned on November 2, 2009. The plant would have been built on the same site as the 450 MW Big Stone Power Plant (several miles from the Minnesota border).[1]

Until the Fall of 2007, the plant was sponsored by seven utilities: Otter Tail Power (lead developer), Central Minnesota Municipal Power Agency, Great River Energy, Heartland Consumers Power District, Missouri River Energy Services, Montana-Dakota Utilities Co., and Southern Minnesota Municipal Power Agency. In Sept. 2007, Central Minnesota Municipal Power Agency (49 MW share) and Great River Energy (122 MW share) withdrew from the project, leaving the projected capacity of the plant undersubscribed by about 27%.[2] The plant will now be downgraded to 500-580 MW, but projected costs have increased from $1.2 billion to $1.6 billion.[3]

Minnesota PUC delays discussion of transmission permits

In Oct. 2007, the Minnesota Public Utilities Commission announced that, due to planning delays, they would delay their discussion of permitting for new transmission lines until March 2008. On Oct 26, the U.S. EPA published the Supplemental Draft Environmental Impact Statement for the project; public comments ended on Dec. 10.[4]

Utilities file revised plan with Minnesota PUC

On Nov. 13, 2007, the remaining five utilities filed a revised plan with the Minnesota PUC.

Minnesota PUC puts $30/ton premium on CO2

In a vote on Dec. 6, the Minnesota PUC stated that utilities trying to build new power plants should plan on paying a premium to burn fossil fuels; they proposed a premium of $30 per ton of CO2. In recent months, project sponsors have publicly stated that they will incorporate emissions costs into their cost factoring, but environmental groups argue that the factored cost of $9 per ton of CO2 is unrealistically low.[5][6]

ALJs recommend denying transmission line permit

On May 9, 2008, two Administrative Law Judges recommended to the Minnesota PUC that the transmission line siting permit for the plant through western Minnesota be denied, based on their conclusion that conservation and load management measures can more economically satisfy the demand for electricity.[7]

Sierra Club sues Big Stone I for inadequate pollution controls

On June 10, 2008, the Sierra Club filed a federal lawsuit against owners of the existing Big Stone I Plant for failing to install modern pollution controls during renovations and expansions, as required by federal law. The controls are estimated to have cut Big Stone I's emissions by more than 90% if they had been implemented. The Sierra Club requested that the court order the companies to immediately install pollution reduction equipment.[8]

ND PSC approves plant and transmission costs; DRC appeals

On August 27, 2008, the North Dakota Public Service Commission found the costs of the plant and its associated transmission line to be an acceptable use of rate-payers' funds. In September 2008, the Dakota Resource Council appealed the Commission's approval of the plant.[9]

Report questions utilities' construction and alternatives estimates

On October 22, 2008, the Minnesota Public Utilities Commission received a report it had requested from Boston Pacific Co. of Washington, D.C., saying that the utilities had underestimated construction costs and overestimated the costs of alternative energy sources.[10]

EPA overturns approval of air permit

On January 23, 2009, three days after the Obama administration took office, the EPA overturned the approval of Big Stone II. The decision comes after the state of North Dakota failed to require state-of-the-art pollution controls for the coal plant to address concerns about soot, smog and global warming pollution. The reversal may be the end of the coal plant. If the plant is to proceed, Otter Tail Power will have to redesign the project to incorporate the best and maximum available control technology for pollution such as soot and smog. Sierra Club and Clean Water Action are also pushing for the EPA to set limits for carbon dioxide emissions.[11]

Certificate of need for transmission lines approved

On March 17, 2009, the Minnesota PUC approved a certificate of need for a transmission line for the Big Stone II coal plant. Half of the power from the plant will go to Minnesota. The Otter Tail Power Company must favorably resolve a number of issues, such as limiting rate recovery and carbon and construction costs, in order to continue as a project participant.[12]

On April 30, 2009, the Minnesota PUC rejected a request from Sierra Club and other environmental groups to reconsider its approval of transmission lines. The groups plan to appeal the PUC's decision in the Minnesota Court of Appeals.[13]

Revised air permit approved

On April 21, 2009, the South Dakota Board of Minerals and Environment approved and filed with the EPA a revised Title V air permit. Barring objections by the EPA to the revision, the Department of Environment Natural Resources is expected to issue the Title V permit in June 2009.[14]

Otter Tail Power pulls out of project

On September 11, 2009, Otter Tail Power Co. announced it was abandoning its plans for the Big Stone II project. The company cited the economic downturn and uncertainty about pending federal regulations for carbon dioxide emissions. Without Otter Tail's participation, the plant is less likely to be built.[15]

Project Cancelled

The Big Stone II electrical power plant, was abandoned on November 2, 2009. The plant would have supplied approximately 550 megawatts of power to utilities in North Dakota, South Dakota and southern Minnesota with a price tag of $1.6 billion. A poor national economy and uncertainty about future federal environmental regulation were said to be the reasons that it was difficult to finance the plant. Environmental and citizen groups celebrated the news of Big Stone II being abandoned.

"This is happening in the context of coal plants around the country being abandoned," said Margaret Levin, state director for the Minnesota North Star chapter of the Sierra Club. "I would certainly attribute this outcome to an increased understanding ... that we have got to switch away from coal and other dirty forms of power."[16]

Project Details

Sponsors: Otter Tail Power Company (lead developer), Heartland Consumers Power District, Missouri River Energy Services, Montana-Dakota Utilities Co., and Southern Minnesota Municipal Power Agency
Location: Milbank, SD
Capacity: 500-580 MW
Type: Supercritical
Projected in service: 2011-2012
Status: Permitting

Financing

Citizen Groups

Resources

Testimony

Hearings on the Big Stone Unit 2 power plant took place in May 2006.

Analysts for Synapse Energy Associates
Topics:
1. The need and timing for new supply options
2. Alternatives to Big Stone II
3. Emissions controls

References

  1. Dale Wetzel, "Developers abandon plan for SD power plant," Associated Press, November 2, 2009
  2. Big Stone II Announces Participant Changes, Big Stone II press release, September 17, 2007.
  3. Utilities Withdraw from Power Plant Project, Minneapolis-St. Paul Business Journal, September 18, 2007.
  4. Big Stone II Power Plant and Transmission Project Supplemental Draft Environmental Impact Statement, U.S. Environmental Protection Agency website, October 26, 2007.
  5. New Fight Over Big Stone Power Plant Centers On Carbon Costs, Minnesota Public Radio, November 12, 2007.
  6. Carbon Regulation Will Cost BIg Stone II, But How Much?, Minnesota Monitor, December 6, 2007.
  7. "ALJ Recommendation of Denial," May 9, 2008.
  8. "Stopping the Coal Rush", Sierra Club, accessed November 2008. (This is a Sierra Club list of new coal plant proposals.)
  9. "DRC appeals Big Stone II approval," Grand Forks Herald, September 27, 2008. (Full article requires purchase.)
  10. "Big Stone II power plant partners study independent report" West Central Tribune Online, October 24, 2008
  11. "Big Stone II Sent Back to the Drawing Board," Clean Water Action, January 23, 2009.
  12. "Stopping the Coal Rush", Sierra Club, accessed May 2009. (This is a Sierra Club list of new coal plant proposals.)
  13. "Stopping the Coal Rush", Sierra Club, accessed May 2009. (This is a Sierra Club list of new coal plant proposals.)
  14. "Stopping the Coal Rush", Sierra Club, accessed May 2009. (This is a Sierra Club list of new coal plant proposals.)
  15. "Minn. utility quits Big Stone II," Associated Press, September 11, 2009.
  16. Dale Wetzel, "Developers abandon plan for SD power plant," Associated Press, November 2, 2009

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