Utilities commission plans final hearings on Big Stone II

Decision could come as early as Thursday

By Tom Hintgen (Contact) | The Daily Journal

Published 12:00 p.m., January 12, 2009

The Minnesota Public Utilities Commission (PUC) has scheduled final hearings on permits for transmission lines that would carry electricity from the proposed Big Stone II power plant. Final arguments will begin Tuesday and the PUC will start deliberations Thursday.

Electricity from Big Stone II, according to Otter Tail Power Company and its four Big Stone II participants, would benefit consumers in Otter Tail County, other areas of Minnesota and parts of four other states.

Ward Uggerud, senior vice president for Otter Tail Power Company, said Friday afternoon that he remains confident the PUC will approve the permits. Approval would allow the project in northeastern South Dakota to move forward.

The utilities have said that without the power lines, they cannot build the plant that would be located adjacent to Big Stone I near Milbank, S.D., across the river from Ortonville.

“Each of the five Big Stone II utilities is facing a critical need for additional baseload capacity within the next two to three years,” Uggerud said. “In addition, the regional power pool forecasts our reserve generation capacity to disappear by 2011. The regional transmission operator describes the regional grid as severely restricted."

Many environmentalists, however, have urged rejection of the permits. Opponents of Big Stone II would rather see additional wind turbine development.

Otter Tail Power Company and its partners, however, maintain that transmission line upgrades into Minnesota are needed in order to handle the additional electric power — and to create more capacity for wind-generated power in western Minnesota and eastern South Dakota.

Along with Otter Tail Power Company, the Big Stone II project participants include Central Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services and Montana-Dakota Utilities Co. Together, these entities serve more than one million people in Minnesota, South Dakota, North Dakota, Iowa and Montana.

In June 2008 the five-member PUC was to vote on the issue, but when it became clear the board was tied 2-2 with a new commissioner wanting more information, a consultant was hired to look at several issues. The consultant reported late last year that the utilities, led by Otter Tail Power, had underestimated the cost of a coal-fired power plant and overestimated the costs of alternatives, including wind.

That closely mirrored the arguments of the power plant’s opponents, disputed by Otter Tail Power Company and the other four Big Stone II participants. Other issues relating to Big Stone II have included carbon dioxide costs and other costs pertinent to the project.

Based on the most recent design refinements, the project, including transmission, would cost about $1.6 billion. The size of the new plant in northeastern South Dakota would be 500 to 580 megawatts.

“Big Stone II is our customers’ best generating opportunity from the standpoint of reliability, price and environmental responsibility,” said Uggerud.

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