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Transmission line proceedings delayed possibly for six months

ST. PAUL -- A plan to build electric transmission lines in western Minnesota is static as utilities behind the project scale back their design for the related Big Stone II power plant.

The transmission line plan by Fergus Falls-based Otter Tail Power Co. and four other energy companies was delayed Thursday, possibly extending the two-year-old proceedings for at least another six months. The Minnesota Public Utilities Commission gave the five companies time to explore building a smaller coal-fired power plant after two of their partners backed out.

The commission's 4-1 vote dismissed a request by Big Stone II opponents -- who argue there remain environmental hazards tied to the plan -- to scrap the transmission line case and force the utilities to start over.

The utilities are to report back to the commission by early November with an alternative plan for the Big Stone II project. Todd Guerrero, an attorney for the companies, said the existing plan for a 630-megawatt plant probably will be downsized to either 500 megawatts or 580 megawatts, whichever is most cost-effective for the utilities.

That, however, should not alter the need for two transmission lines planned from near Big Stone City, S.D., northeast to Morris and southeast through Canby to Granite Falls, Guerrero said.

The commission has no authority over whether the coal plant is built. It only can approve or reject the utilities' plan to build the transmission lines, a project expected to cost $115 million to $140 million.

"There's a significant need for power," Guerrero said.

The hearing was prompted by Great River Energy's decision last month to withdraw from the project. Southern Minnesota Municipal Power Agency, another partner, said it was backing away from a long-term commitment to Big Stone II because of unrelated pending litigation.

A loss of two partners -- which collectively were to own more than one-fourth of the generating plant -- and the subsequent need for a new plant design should force the utilities to start over, argued Elizabeth Goodpaster, an attorney representing five environmental and wind-energy groups opposed to Big Stone II.

Those changes make the utilities' original transmission line request "nothing more than an artifact," Goodpaster said.

Commission members signaled they want to avoid delaying the transmission project, but some said the utilities should provide more information about their new plans before the transmission lines are approved.

"Until we know what you're going to do, it seems the ball's in your court," Commissioner Phyllis Reha said. "I don't see how this commission can proceed."

The utility companies are to develop their new Big Stone II plan by early next month, followed by period for opponents and the public to respond. The case likely will go before a panel of administrative law judges, who could make a recommendation to the Public Utilities Commission about whether to approve the transmission lines. That decision may not happen until March.

Western Minnesota communities are watching the case closely.

General Manager Bruce Gomm of Willmar Municipal Utilities called the project "critical" for his community. Willmar has committed to purchasing 8 megawatts of electricity from Big Stone II, anticipating the need to expanding from its existing daily load average of around 50 megawatts, he said. Due to demand, the utility buys some electricity on the open market, where prices fluctuate. That can impact ratepayers.

"This will help offset that daily stuff that we don't have control over," Gomm said of Big Stone II.