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Utilities Forced to Drop Plans for Big Stone II Coal-Fired Project in S.D.

Participating utilities pulled the plug on a fully permitted project to build the $1.6 billion Big Stone II coal-fired power plant near Millbank, S.D., on Monday, saying they could not find new backers necessary to build the 500-to-600-MW facility.

“The project required additional participants to move forward; however none have committed,” said the utilities, which included the Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services and Montana-Dakota Utilities Co. (MDU).

In September, Otter Tail Corp.— Big Stone II’s lead developer—withdrew from the project, citing the economic downturn and a high level of uncertainty associated with proposed federal climate legislation.

The project had included new 345-kW transmission lines, which were to be sized to also serve the region’s burgeoning wind energy development. These had been approved by the Minnesota Utilities Commission (MPUC) in January because it found that developers had provided “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 unit, slated to enter service between 2015 and 2016, would have been the second in the Big Stone facility located in Grant County, South Dakota, about 200 miles west of Minneapolis, near the South Dakota–Minnesota border.

MDU had relied on new power from the plant, though it said in a release that it had adequate supplies for the near term. “We will now look at other supply options that are reliable and cost-beneficial for our customers. We have plans to expand our wind production by 30 megawatts in 2010 and will review other generation” said Dave Goodin, president and CEO of MDU, said in the release.

Sources: Big Stone II, POWERnews

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