The Minnesota Public Utilities Commission (MPUC) last week unanimously granted approval for 345-kV transmission lines sought for the proposed $1.6 billion Big Stone II coal-fired plant in South Dakota.

The MPUC rejected the overall unfavorable recommendation of the administrative law judges in a May 2008 supplemental report, voting instead that participants who will build the 580-MW generation facility near Big Stone City showed a need for baseload energy.

The MPUC also found that there was “reasonable assurance that Big Stone II would be more cost-effective than renewable energy beyond the statutory levels of renewable energy based on accepted estimates of construction costs and carbon dioxide.”

The five-member commission’s approval came with conditions (PDF), however,  including construction cost and potential future carbon dioxide cost targets that affect only Otter Tail Power Company, the lone investor-owned utility among the Big Stone II partners that is under MPUC jurisdiction.

Other conditions included closure of an older 145-MW coal plant in Hoot Lakes by 2018, and fulfilling various requirements related to renewable energy and energy efficiency goals.

The commission also said that Big Stone II would have to be built as “carbon-capture retrofit ready,” and that the participants must evaluate the feasibility of building the plant using ultra-supercritical technology if it could result in an additional 2% efficiency gain.

The commission granted a certificate of need and a route permit for the transmission lines. It said that orders setting forth the details of the commission’s decision for both the certificate of need and the route permit would be issued in the coming weeks.

The certificate of need is required by state law and will allow the Big Stone II utilities to construct and upgrade about 112 miles of electric transmission lines in western Minnesota. The facilities are needed to deliver power from the Big Stone site and from numerous other planned generation projects, most of which are wind energy.

The Big Stone II generation and transmission project had previously obtained regulatory approvals from South Dakota for an energy conversion facility permit, transmission route permit, water use permit, air quality permit and solid waste disposal permit. North Dakota has granted Otter Tail Power Company and Montana-Dakota Utilities Co. an advanced determination of prudence related to their loads in that state. In addition, elected officials from more than 100 municipalities, as members of the three public power co-owners, approved participation in Big Stone II.

The Big Stone II Project participants are Otter Tail Power Company, Central Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services, and Montana-Dakota Utilities Co.

Sources: Big Stone II, MPUC