Sinking like a big stone?
South Dakota coal plant plans stalled out

In the latest regulatory move in the fate of the Big Stone II coal plant—slated to be built in South Dakota on the border of Minnesota—the Minnesota Public Utilities Commission decided yesterday to neither approve or reject the powerlines necessary to bring the plant’s electricity to the Minnesota market. Without the lines, the project is likely dead. If built, Big Stone II would spew almost 5 million tons of global warming pollution into the air every year—for nearly 50 years.

Fresh Energy has been fighting the Big Stone II powerline proposal since the plant’s inception, arguing

• it would increase global warming emissions despite a 2007 Minnesota law mandating reductions,
• coming carbon regulations would mean a rate hike to Minnesota customers, and
• plant proponents have not demonstrated that renewable energy and efficiency are not better (i.e., cheaper) for consumers—a provision required by Minnesota law.

The PUC ruling follows a May recommendation by two Minnesota administrative law judges that the powerline project be denied. The judges’ recommendation stated that the plant proponents “have failed to demonstrate that their demand for electricity cannot be met more cost effectively through energy conservation and load-management measures….”

A third option
Commissioners request more information

Yesterday’s decision by the five-member PUC came after hours of discussion. Two members signaled they were ready to approve the project—disregarding the administrative law judges’ ruling—while two were ready to follow that recommendation and deny the permits. Ultimately, Commissioner Dennis O’Brian, a very recent Pawlenty appointee to the commission, felt there was too much uncertainty about cost. In a surprising turn, he gained three votes for the unusual step of hiring an independent expert to advise the Commission on the likely costs of global warming regulations. He also wanted expert advice on the future costs of coal plant construction and natural gas.

Opponents of the plant, including Fresh Energy, had argued from the start that the power companies must consider the likely cost of the electricity from the plant when future costs of global warming regulation are included. Such analyses are essential to evaluate whether renewables and efficiency are a less expensive solution, a cost comparison required by Minnesota law.

Big risk, bad bet
The burden is on utilities to demonstrate coal is better than renewables and efficiency

From the beginning, Big Stone II has been a direct challenge to Minnesota laws that mandate preference for energy efficiency and renewable energy and laws that set goals for deep reductions in global warming emissions over time. How can emissions be reduced if coal plants are approved? Remember, the emissions from this one plant alone about equals the annual global warming emissions produced by all the cars, trucks, and trains in South Dakota.

The utilities behind Big Stone II agree that there will soon be global warming regulations—regionally, nationally, or both. However, they avoid the obvious reality: pending global warming laws put great economic uncertainty onto proposed new coal plants and the risk is driving away smart money and smart management. To calm the regulators, the Big Stone II utilities say they can predict or control those risks, which will be minimal. The commission wasn’t buying it.

A pretty clear signal of the risk was that two of the largest partners in the project—Great River Energy and Southern Minnesota Municipal Power Agency—pulled their support in September. Another indicator came in 2007 when all three CEOs of Minnesota’s largest utilities said “no” to new coal plants in their 15-year plans.

The bottom line for the majority on the Commission was that the utilities had not met their burden in law—they had not established that the plant was needed and had not established that coal is the best and cheapest option.  

The public record against Big Stone II has been built over three years with hundreds of documents and many hours of expert testimony. Yesterday, the PUC looked at that record, and could not garner the votes to approve a new coal plant. Fresh Energy expects that the commissioners, given the facts, will make the right decision and deny the Big Stone II powerlines.

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Fresh Energy works daily for smart energy policies and regulations that enhance our economies, protect human health and communities, restore our environment, and move us toward energy independence. www.fresh-energy.org