Montana last week revoked an air quality permit needed by the Southern Montana Electric (SME) Generation and Transmission Cooperative to build a 250-MW coal-fired power plant east of Great Falls, Mont. The decision was reportedly made at SME’s request.

The state Department of Environmental Quality (DEQ) revoked the air quality permit, granting a written request by SME to take the proposed Highwood coal plant entirely off the table. The cooperative has made clear that it would move forward with plans to construct a 120-MW natural gas-fired plant instead.

General Manager Tim Gregori described the request to have the permit revoked to The Great Falls Tribune as a realignment of the cooperative’s plans for a generation build-out. He said it was not necessarily "the death of a coal-fired facility," but he acknowledged that reinstating plans for a coal plant would require new permits from the DEQ.

The cooperative, which serves 120,000 Montanans, had for four years stuck to its plans to build the $950 million circulating fluidized bed boiler power plant—the first of its kind in the U.S.—obtaining all required permits, including one for particulate matter 2.5 microns or smaller.

Though the cooperative broke ground in October last year, a May 2007 air quality permit, which had been revised following a prior appeal, was again appealed in November, this time by four conservation groups, including the Sierra Club. The groups contended that the plant lacked effective emissions controls. Like many new coal-fired plants proposed in the U.S., the Highwood plant is also embroiled in a pending lawsuit in a state trial court over carbon dioxide emissions.

Under its charter, SME is required to meet the electric power needs of the five cooperatives it serves. But it does not have the capacity to meet all its members’ power needs beyond roughly 2010. The cooperative projected (PDF) that it will have a resource requirement, or deficit, of approximately 116 MW in 2009. In five years, that deficit will grow to approximately 160 MW.

In February this year, SME announced that it was putting the project "on hold" because of the legal delays while the cooperative pursued a more expeditious route to meeting power demand by building a 120-MW combined-cycle natural gas–fired plant and erecting at least 6 MW of wind turbines. The cooperative no longer plans to erect the wind turbines, The Great Falls Tribune reported.

Last week, environmentalists claimed the DEQ’s revocation of the air permit as the "latest in a series of victories across the country." Jenny Harbine, an Earthjustice attorney who represented the coalition said, "This coal plant has been an inch from dead for months now and it appears as though the final nail in the coffin has been driven."

Sources: SME, The Great Falls Tribune, POWERnews, DEQ, Earth Justice