Coal-fired S. Dakota project awaits approval
Posted: Monday, March 03, 2008
MINNEAPOLIS (AP) -- An environmental movement in Minnesota that led to a law to drastically cut greenhouse gas emissions is threatening to put the brakes on a power plant expansion across the border in South Dakota.
Though the project near Milbank, S.D., has been approved by that state's regulators, plans to run power lines deep into Minnesota have faced fierce opposition from environmentalists who say it runs counter to Minnesota's move toward cleaner power.
It's a dilemma other power projects could face, experts say, as states pass a mishmash of environmental policies, in particular renewable energy standards. While Minnesota has a plan to cut greenhouse emissions by generating 25 percent of its energy through "clean" sources like wind by 2025, South Dakota has set no such renewable standard.
As early as April, the Minnesota Public Utilities Commission will decide whether to grant permission for the new power lines and improvements to existing lines. Without that backing, Big Stone II -- which would serve 1 million people, about half of them on the western plains of Minnesota -- will be sunk.
"We're in a new era," said Dan Sharp, a spokesman for the five power companies proposing the project. "This is really a precedent-setting era where political activity in one state is having an impact on the economy and access to energy for people in other states."
"If we can't get the transmission certificates in Minnesota, then we can't build the plant."
Greg Nemet, a professor of public affairs and environmental studies at the University of Wisconsin, said the Big Stone II dispute is an example of a growing "California effect" in environmental policy.
For example, as California tightens rules against importing electricity generated by coal-fueled power stations, its neighboring states will have to develop more wind or hydro power to sell across the border.
"It's the idea that if you have a large state that is particularly green, it can actually export its greenness to other states," he said. The Big Stone II project, he said, "is a perfect example of how that could happen."
North Dakota's Public Service Commission has scheduled a hearing April 28-29 in Bismarck to review whether the project makes economic sense.
The three-member commission held an earlier hearing in June. The subsequent withdrawal of two of project's seven participating utilities has raised questions about whether Big Stone II is the best alternative to meeting future power needs, said Tony Clark, a North Dakota public service commissioner.
Some Minnesota utilities already rely on coal-fired plants in western North Dakota for their power supply.
Great River Energy, of Elk River, Minn., owns two power plants, near Underwood and Stanton, N.D., that produce more than 750 megawatts of power. Otter Tail Power Co., of Fergus Falls, and the Northern Municipal Power Agency, of Thief River Falls, are part owners of another plant near Beulah, N.D., that produces 414 megawatts.
At first, the Big Stone II project envisioned a new, 630-megawatt plant next door to the existing plant, which began producing electricity in 1975. Its proposed output has been scaled back to 500 to 580 megawatts since Great River Energy and the Rochester-based Southern Minnesota Municipal Power Agency dropped out of the project.
The proposal angered Minnesota small-town environmentalists, advocacy groups and lawmakers who argue that feeding the plant's power to Minnesota cities would violate the spirit of the state's renewable energy standard, which was approved last year.
Bill Grant, a spokesman for the Izaak Walton League, an environmental group, said Minnesota's 25-25 law has been "a huge part" of the group's argument in legal briefs filed on behalf of the project's opponents.
Opponents also argue that the use of more coal-fired electricity to power Minnesota homes would crimp the state's efforts to promote alternative forms of energy, such as the wind that is already being captured by hundreds of turbines to the south and east of the existing Big Stone plant.
"By stopping this thing, you give wind or other sources a boost in Minnesota. But South Dakota is fine with the old technology. So it's one state's approach against another's," said Duane Ninneman of rural Ortonville, a consultant for a rural environmental group opposed to the project.
Opponents also believe consumers will end up covering future "carbon penalties" that the plant may have to pay for its greenhouse gas emissions.
Earlier this year, the South Dakota Supreme Court gave the project the go-ahead, upholding a decision by that state's Public Utilities Commission to grant a construction permit. The court ruled that the commission had followed all laws when it approved the permit and decided that the plant would not increase emissions of carbon dioxide enough to seriously damage the environment.
That leaves the project in Minnesota's hands. Two administrative law judges who fielded testimony from opponents and backers of the project will offer a recommendation to the state's utility regulators, who will then decide whether to grant permits for the new lines, which would run 60 miles to Granite Falls and 70 miles to Willmar. The judges are slated to offer the recommendation in mid-March, with the state Public Utilities Commission fielding testimony and deliberating in mid-April before making a decision.
"What states are doing about carbon emissions is a moving target," said C. Baird Brown, a Philadelphia lawyer who specializes in energy projects. That makes for uncertainty when it comes to evaluating how a project will ultimately serve a particular state's energy goals.
"One of the questions that can be asked in Minnesota is what progress is being made to meet the goals in the state's renewable energy portfolio, and is this project keeping us from getting there?" he said. "That's a fair question to be asking."
Sharp, the power plant spokesman, said the latest modeling plan considered -- as mandated in Minnesota's 25-25 law -- whether the plant expansion could generate the electricity it needs at a cheaper cost using wind, and determined it couldn't. He also said the company believes it has included an accurate projection of future carbon penalties in its costs.
Moreover, Sharp said new technology will reduce emissions of nitrogen, sulfur and mercury from the plant. For instance, while the existing plant emits 189 pounds of mercury a year, the entire site would emit just 70-90 pounds per year after the expansion is running, he said.
"This is going to be a really clean plant," he said. "It's not what most people think of when they think of a coal-fired plant."
Though the project near Milbank, S.D., has been approved by that state's regulators, plans to run power lines deep into Minnesota have faced fierce opposition from environmentalists who say it runs counter to Minnesota's move toward cleaner power.
It's a dilemma other power projects could face, experts say, as states pass a mishmash of environmental policies, in particular renewable energy standards. While Minnesota has a plan to cut greenhouse emissions by generating 25 percent of its energy through "clean" sources like wind by 2025, South Dakota has set no such renewable standard.
As early as April, the Minnesota Public Utilities Commission will decide whether to grant permission for the new power lines and improvements to existing lines. Without that backing, Big Stone II -- which would serve 1 million people, about half of them on the western plains of Minnesota -- will be sunk.
"We're in a new era," said Dan Sharp, a spokesman for the five power companies proposing the project. "This is really a precedent-setting era where political activity in one state is having an impact on the economy and access to energy for people in other states."
"If we can't get the transmission certificates in Minnesota, then we can't build the plant."
Greg Nemet, a professor of public affairs and environmental studies at the University of Wisconsin, said the Big Stone II dispute is an example of a growing "California effect" in environmental policy.
For example, as California tightens rules against importing electricity generated by coal-fueled power stations, its neighboring states will have to develop more wind or hydro power to sell across the border.
"It's the idea that if you have a large state that is particularly green, it can actually export its greenness to other states," he said. The Big Stone II project, he said, "is a perfect example of how that could happen."
North Dakota's Public Service Commission has scheduled a hearing April 28-29 in Bismarck to review whether the project makes economic sense.
The three-member commission held an earlier hearing in June. The subsequent withdrawal of two of project's seven participating utilities has raised questions about whether Big Stone II is the best alternative to meeting future power needs, said Tony Clark, a North Dakota public service commissioner.
Some Minnesota utilities already rely on coal-fired plants in western North Dakota for their power supply.
Great River Energy, of Elk River, Minn., owns two power plants, near Underwood and Stanton, N.D., that produce more than 750 megawatts of power. Otter Tail Power Co., of Fergus Falls, and the Northern Municipal Power Agency, of Thief River Falls, are part owners of another plant near Beulah, N.D., that produces 414 megawatts.
At first, the Big Stone II project envisioned a new, 630-megawatt plant next door to the existing plant, which began producing electricity in 1975. Its proposed output has been scaled back to 500 to 580 megawatts since Great River Energy and the Rochester-based Southern Minnesota Municipal Power Agency dropped out of the project.
The proposal angered Minnesota small-town environmentalists, advocacy groups and lawmakers who argue that feeding the plant's power to Minnesota cities would violate the spirit of the state's renewable energy standard, which was approved last year.
Bill Grant, a spokesman for the Izaak Walton League, an environmental group, said Minnesota's 25-25 law has been "a huge part" of the group's argument in legal briefs filed on behalf of the project's opponents.
Opponents also argue that the use of more coal-fired electricity to power Minnesota homes would crimp the state's efforts to promote alternative forms of energy, such as the wind that is already being captured by hundreds of turbines to the south and east of the existing Big Stone plant.
"By stopping this thing, you give wind or other sources a boost in Minnesota. But South Dakota is fine with the old technology. So it's one state's approach against another's," said Duane Ninneman of rural Ortonville, a consultant for a rural environmental group opposed to the project.
Opponents also believe consumers will end up covering future "carbon penalties" that the plant may have to pay for its greenhouse gas emissions.
Earlier this year, the South Dakota Supreme Court gave the project the go-ahead, upholding a decision by that state's Public Utilities Commission to grant a construction permit. The court ruled that the commission had followed all laws when it approved the permit and decided that the plant would not increase emissions of carbon dioxide enough to seriously damage the environment.
That leaves the project in Minnesota's hands. Two administrative law judges who fielded testimony from opponents and backers of the project will offer a recommendation to the state's utility regulators, who will then decide whether to grant permits for the new lines, which would run 60 miles to Granite Falls and 70 miles to Willmar. The judges are slated to offer the recommendation in mid-March, with the state Public Utilities Commission fielding testimony and deliberating in mid-April before making a decision.
"What states are doing about carbon emissions is a moving target," said C. Baird Brown, a Philadelphia lawyer who specializes in energy projects. That makes for uncertainty when it comes to evaluating how a project will ultimately serve a particular state's energy goals.
"One of the questions that can be asked in Minnesota is what progress is being made to meet the goals in the state's renewable energy portfolio, and is this project keeping us from getting there?" he said. "That's a fair question to be asking."
Sharp, the power plant spokesman, said the latest modeling plan considered -- as mandated in Minnesota's 25-25 law -- whether the plant expansion could generate the electricity it needs at a cheaper cost using wind, and determined it couldn't. He also said the company believes it has included an accurate projection of future carbon penalties in its costs.
Moreover, Sharp said new technology will reduce emissions of nitrogen, sulfur and mercury from the plant. For instance, while the existing plant emits 189 pounds of mercury a year, the entire site would emit just 70-90 pounds per year after the expansion is running, he said.
"This is going to be a really clean plant," he said. "It's not what most people think of when they think of a coal-fired plant."
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