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Utility officials, industry pros remain divided on the potential Big Stone II costs

ST. PAUL -- Energy experts and utility officials disagree over the potential cost of a proposed coal-fueled power plant and related transmission line improvements.

Officials from five utilities seeking regulatory approval for the Big Stone II project said Thursday they have used conservative cost estimates.

Opponents of the coal-fueled plant said there are market uncertainties that could be significant enough to warrant halting the project.

"I happen to believe that there's a train wreck down the road for companies that build coal plants," said David Schlissel, an energy consultant and key expert for Big Stone II opponents.

The differences were highlighted during the second day of an administrative law hearing in St. Paul. A two-judge panel is taking testimony before deciding whether to recommend that the Minnesota Public Utilities Commission allow the project to move forward. The hearing was to conclude today.

The five utilities led by Fergus Falls-based Otter Tail Power Co. plan to build a 500- or 580-megawatt coal-fired power plant near Big Stone City in eastern South Dakota. The $1.6 billion project would include $250 million worth of related electric transmission line projects in Minnesota, North Dakota and South Dakota.

Otter Tail Power is joined in the project by Central Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services and Montana-Dakota Utilities Co.

The Public Utilities Commission will decide whether to grant the utilities a certificate of need for planned upgrades on two electric transmission lines in western Minnesota. The utilities want to double the load capacity on a 115-kilovolt line extending from near the planned Big Stone II plant to Granite Falls. The second line, from Big Stone City to Morris, would be tripled from its existing 115-kilovolt capacity.

Environmental and wind-energy groups opposing Big Stone II claim the five utilities are not reasonably considering alternative ways to meet growing energy demands. They also argued in testimony Thursday that the utility companies have downplayed the potential impact of energy conservation efforts and renewable energy incentives.

Schlissel said his review of the utilities' proposal left him to conclude they used biased information that favored their plan.

"It appears that they are trying to get a predetermined result," said Schlissel, a senior consultant with Massachusetts-based Synapse Energy Economics.

Under cross-examination by Big Stone II attorney Todd Guerrero, Schlissel acknowledged that the utilities could not rely solely on renewable energy -- such as wind, biomass or hydro - as an alternative to the coal plant.