Big decision looms for Big Stone II

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A four-year battle over a proposed coal plant in South Dakota could come to a close during a Minnesota Public Utility Commission (PUC) hearing in St. Paul on Thursday. The commission will decide whether to issue a certificate of need for transmission line upgrades in Minnesota required to construct the Big Stone II coal-fired power plant.

If the certificate is denied, the project will likely be scrapped entirely. If the certificate is approved, environmental groups will have little recourse to prevent the plant’s construction.

Big Stone II is to be a 580-megawatt facility constructed next to the existing, 450-megawatt Big Stone I plant in South Dakota near the headwaters of the Minnesota River and the border with Minnesota. While the PUC has authority only over the transmission lines and not the actual proposed power plant, 45 percent of the plant’s generated electricity will be delivered to Minnesota, giving the Minnesota panel decisive power.

The five-member PUC was to issue a final ruling last June, but newly appointed Commissioner J. Dennis O’Brien requested further review of the project, and an inquiry was approved by a vote of 3-2. Boston Pacific was hired as an independent consultant to assess carbon dioxide emission costs, construction costs and fuel prices for Big Stone II.

The Boston Pacific report, issued in October, concluded that “the range of emissions, construction, and fuel price inputs used in the Applicants’ analyses were not appropriate; put another way, they were out of line with current ‘best practices’ resource selection methodologies.”

The report took particular exception to the applicants’ emission costs.

“We found the Applicants’ use of a $0 to $9 per ton CO2 tax, without escalation over time, to be far lower than the ranges justified for resource decisions today,” the report said.

Opponents of the plant accused the five utilities involved in Big Stone II of underestimating the cost of the plant and overestimating the cost of alternatives.

Dan Sharp, communications manager for the Big Stone II project, had no strong objections to the findings in the Boston Pacific report and stated it was very much in line with the utilities’ own numbers.

“Construction and fuel costs were very close to our own numbers,” Sharp said. “The simple reason for the difference in construction costs is that we originally used an estimated completion date of 2013 and the long approval process resulted in Boston Pacific pushing that to 2015.”

As for the criticism that the applicants’ carbon dioxide tax fell below justified ranges, Sharp said that it is difficult to estimate a tax that does not yet exist and that the utilities used the estimates required by the PUC in their application.

There is much more to the battle over Big Stone II than cost estimates. Environmental target=”_blank”>concerns about carbon dioxide and mercury emissions, water usage and coal ash have been at the center of the four-year debate, but opposition groups have had success only in Minnesota.

Existing Minnesota laws are at least partly to credit for that success, according to Chuck Laszewski of the Minnesota Center for Environmental Advocacy.

“Our laws are more restrictive for coal, largely because of recent legislation requiring emissions cuts,” said Laszewski.

In 2007 Gov. Tim Pawlenty signed the Next Generation Energy Act, which required, among other things, greenhouse gas reduction goals of 15 percent by 2015, 30 percent by 2025 and 80 percent by 2050. With those goals in mind, many argue that the electricity produced by Big Stone II could be provided through alternative sources such as wind and solar energy.

Sharp countered that the upgraded transmission lines will be required for those solutions as well and said that Big Stone II is just one project being developed by utilities that are also developing alternative energy projects.

Both sides feel confident that the PUC will rule in their favor. Laszewski said he believes the PUC will deny the certificate of need based on the findings of the Boston Pacific report.

“If the permit is denied, we celebrate,” said Laszewski. “If it’s approved, our coalition will have to regroup and consider what our next step would be, if any.”

Sharp said he believes because the PUC has jurisdiction over only 12 percent of the entire project — the Minnesota portion of the transmission line upgrade — the commission will not deny North and South Dakota the benefits of Big Stone II.

“The main reason we believe it will be approved is there is such an overwhelming need in this region for upgraded transmission lines,” Sharp said. “If its denied, it will be a big disappointment, not just for us, but our customers and wind energy developers will be losing out as well.”

The PUC hears testimony beginning today and will reconvene Thursday morning.

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