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Otter Tail Power pulls out of Big Stone II project

MINNEAPOLIS (AP) -- The utility leading an effort to build a $1.6 billion coal-fired power plant in South Dakota that would serve five states has pulled out of the project.

Minnesota-based Otter Tail Power Co. decided Friday to abandon its plans for Big Stone II. Otter Tail cited the economic downturn and uncertainty about federal legislation to regulate carbon emissions.

Otter Tail's withdrawal makes it less likely the plant will be built.

Otter Tail and four other utilities had worked to line up investors for the plant and had planned to decide this fall if they would move forward.

Big Stone II was to generate up to 580 megawatts of power serving more than a million customers in Minnesota, the Dakotas, Montana and Iowa.