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Judges say reject Big Stone II request

ST. PAUL -- A judicial panel recommends the Minnesota Public Utilities Commission reject an electric transmission project in western Minnesota that is linked to the proposed Big Stone II power plant.

The decision Friday by Minnesota administrative law judges is a setback to a group of utilities led by Fergus Falls-based Otter Tail Power Co. The utilities are seeking regulators' approval for transmission improvements they view as a critical part of their plan to construct a coal-fired power plant in South Dakota, near the western Minnesota border.

Environmental and groups fighting the project applauded the judicial ruling.

"It's huge because this is the recommendation of the judges who actually sat through weeks and weeks of evidence in this case," said Janette Brimmer, legal director for the Minnesota Center for Environmental Advocacy.

Mark Rolfes, Big Stone II project manager, said the actual decision will be made by the Public Utilities Commission.

"It's probably pretty obvious that we disagree with the (administrative law judges)," he said. "They didn't get it right."

The utilities want permission to triple load capacity of a transmission line from the proposed plant near Big Stone City, S.D., to Morris in western Minnesota and to double capacity of a line from the plant to Granite Falls.

Rolfes said Big Stone II proponents made compelling arguments for why the project should move forward.

Judges Steve Mihalchick and Barbara Neilson -- who took testimony from opponents and supporters of the project -- disagreed.

"The applicants have failed to demonstrate that their demand for electricity cannot be met more cost effectively through energy conservation and load-management measures," they wrote, "and the applicants have not otherwise justified their need ... "

Administrative judges previously recommended the project go forward, but then two Big Stone II partners -- Great River Energy and Southern Minnesota Municipal Power Agency -- backed out. That prompted another judicial review. Big Stone II proponents scaled back the plant from 630 megawatts to 500 megawatts or 580 megawatts, but did not change the transmission lines.

"We're mystified on how they have such a reversal of position from what they did on the previous recommendation," Rolfes said.

Parties involved now can submit written briefs on the judges' decision before the Public Utilities Commission rules on the case.

"Most of the time agencies will go with the recommendations, but it's not a sure thing," Brimmer said. "We're really pleased with the recommendation, and I think it's really a watershed in term of energy policy."

In their 65-page report, Mihalchick and Neilson wrote that the realignment caused by the loss of two utility partners "is significant" because they generally service eastern and southeastern Minnesota.

The remaining utilities serve western Minnesota, North Dakota, South Dakota and farther west -- not where the proposed transmission lines are meant to serve.

"It is very difficult to imagine that such a geographic realignment would not cause a significant reassessment of the need for, if not the alignment of, the proposed transmission lines," the judges wrote.

The judges also said the utilities did not demonstrate they explored whether obtaining power from renewable energy sources would be less expensive.

Rolfes said the utilities' modeling factored in renewable energy issues and new state mandates that an increasing amount of power come from non-carbon sources, such as wind.