Big Stone II Coal Plant Dead? Proposer Utility Ottertail Backs Out

Ottertail Power-- proposer and developer of the multi-utility coal power proposal Big Stone II-- today announced its withdrawl from the project. This news means the coal plant expansion project is likely dead.

Big Stone is an existing 300 megawatt coal burning power plant at Milbank, SD on the Minnesota-South Dakota border. It neighbors Big Stone Lake, a recreational lake that the Minnesota DNR spent millions rehabbing to improve fishing, boating and wildlife habitat. Ottertail and partner utilities from Minnesota  and the Dakotas proposed building a new coal-burning power plant on the existing site, which would have doubled power generating capacity to 500-600 MW.

Local residents and pro-environment advocates spent years opposing the project, which they said would increase air pollution, mercury contamination in Big Stone Lake and would use billions of gallons of water from limited local resources. Big Stone opponents urged the utilities to build renewable power generation like wind or solar instead of investing in coal.

Other reasons opponents cited for blocking the construction included uncertainty about costs from building the new site, coal prices and the unknowns about  costs to meet future Global Warming and clean air standards.

According to Otter Tail Power Company President and CEO Chuck MacFarlane, cost factors led to the death of the project. "The broad economic downturn coupled with a high level of uncertainty associated with proposed federal climate legislation and existing federal environmental regulation have resulted in challenging credit and equity markets that make proceeding with Big Stone II at this time untenable for Otter Tail's customers and shareholders. Given the legislative and regulatory uncertainties and current economic conditions, Otter Tail Power Company is unwilling to create a binding financial obligation of approximately $400 million for its share of the project at this time."

Big Stone II had been scheduled to be on line in 2011, and now the plant would not begin operating until late 2015 at the earliest. 

Photo courtesy Sean McGrath via Flickr Creative Commons.