Fresh Energy and its allies have been fighting Big Stone II—an old-fashioned coal plant slated to be built in South Dakota on Minnesota’s border—since 2004. In the last five years, the coal plant has been delayed by hearings, rulings, and continued opposition. Last year, two of the largest partners in the project—Great River Energy and Southern Minnesota Municipal Power Agency—pulled their support.

But on August 13, the Western Area Power Administration—the body that delivers power to 15 states in the Midwest and western United States—considered the environmental impacts of the project and approved the request to connect the Big Stone II plant and transmission to its power system. This decision completes the permitting process and gives Big Stone II a green light.

Each remaining partner in the project—Otter Tail Power Company, Central Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services, and the Montana-Dakota Utilities Company—now has 90 days to decide whether to move forward or drop out of the project. After five long years, it seems Big Stone II’s final countdown has begun.

As coal plants are abandoned across the country, Minnesota and South Dakota forge ahead on dirty power

Since 2003, plans for more than 100 coal plants across the country have been scrapped—59 plants in 2007 (well before the economic downturn), 20 plants in 2008, and 14 plants so far in 2009. While the country as a whole is moving in the right direction—away from dirty, polluting, and old-fashioned coal-fired power—it’s also a clear reminder that Big Stone II utility partners are out of step.

Coal plants abandoned or rejected in the past year include the following:

• Iowa (Sutherland Generating Station Unit 4): cancelled March 2009
• Kentucky (Kentucky Mountain Power): rejected November 2008 for better alternatives and because an out-of-date permit did not require modern pollution control equipment
• Louisiana (Little Gypsy Repowering plant): rejected April 2009 by Louisiana Public Service Commission due to escalating and uncertain carbon regulation costs
• Montana (Highwood Generating Station): abandoned January 2009 in favor of natural gas and wind power
• Nevada (White Pine Energy Station): application withdrawn March 2009 in exchange for a 500-mile transmission line to access renewable resources across the state
• South Carolina (Pee Dee Generating Facility): abandoned August 2009
• South Dakota (NextGen Energy Facility): suspended May 2009 by proposer Basin Electric
• Utah (Intermountain Power Project Unit 3): cancelled July 2009 in favor of natural gas and wind power
• West Virginia (Mountaineer): rejected April 2008 due to escalating costs that had not been updated since 2006 and were no longer credible (whereas Big Stone II’s cost estimates haven’t been updated since 2005)
• Wisconsin (Nelson Dewey Generating Facility): rejected November 2008 due to escalating costs (and the Wisconsin Public Service Commission noted the unlikelihood of any new coal plant being built in Wisconsin because of future carbon regulation)

As plans for coal-fired power plants are abandoned across the country, Big Stone II utility partners—supported by the states of Minnesota and South Dakota—continue to plod along on plans for a costly, risky, and dirty new plant.

Consumers will bear the brunt of Big Stone II’s inflated price tag

Last January—months before Big Stone II’s final permit was approved—the Minnesota Public Utilities Commission (PUC) approved the transmission lines that would carry the plant’s electricity to Minnesota, even though an independent evaluation filed with the PUC before its decision said that Big Stone II utilities had already greatly underestimated the potential costs of the plant.

Electricity consumers in western and central Minnesota may have to make up for the huge cost of building and operating Big Stone II. Reliable information about the actual cost of the project isn’t even available—though proposers have admitted that the amount needed to build the plant has increased 30 percent since 2005.

In addition to escalating construction and operation costs, the future cost of carbon regulation must be factored into the price tag now that the federal government is serious about regulating global warming pollution. Current assumptions about the costs of carbon regulation in the Big Stone II plan ($9 per ton) are way off. Accurate estimations range up to $60 per ton. If built, Big Stone II will spew 4 million tons of global warming pollution into the air each year for at least 50 years. Add up those numbers—it could get expensive.

The PUC gave Otter Tail Power, Big Stone II’s primary partner, the leeway to recover many of these costs from its ratepayers—including most of the costs of future carbon regulation. The risks are even greater for Minnesota municipalities who will purchase power from Big Stone II: without shareholders with whom they can split the risk, all of the costs will be paid by customers. Is this a price Minnesota’s willing to pay?

Fresh Energy and its allies have been fighting Big Stone II—an old-fashioned coal plant slated to be built in South