Impact of Big Stone II's demise uncertain
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The end of the Big Stone II power plant has electricity companies and environmental groups looking to the future.
The utilities planning to build the coal fired plant near the Minnesota border announced Monday they're dropping the project, and that means part of the region's future electricity supply will have to come from somewhere else.
The power companies wanted to build Big Stone II in eastern South Dakota, just a few miles west of Ortonville, Minnesota. Last summer, the 550-megawatt project looked like it was going to happen.
The utilities had all the state and federal regulatory permits they needed and construction would start next year. The only step left left was to get signatures on the financing package for the $1.6 billion project. That's where things fell apart.
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In early September, the lead company in the project, Otter Tail Power, pulled out. Big Stone II spokesperson Mark Hanson said the Otter Tail decision turned out to be a fatal injury.
"With Otter Tail withdrawing, the project needed additional participants for it to move forward," Hanson said. "And none committed to the project."
Otter Tail gave two reasons for pulling out. Company officials said there were too many uncertainties in the credit markets following last year's financial collapse to continue with the project.
The Minnesota company also said it was unsure how the debate over global warming would affect coal plants like Big Stone II. Big Stone II spokesperson Mark Hanson would not say whether those same concerns prevented new companies from joining.
The end of the project will have an economic impact on the towns near the proposed plant. Maynard Meyer is on the Madison City Council. He said his city and several other western Minnesota communities passed resolutions supporting Big Stone II.
"Anytime you have something come along that creates 45 jobs, permanent jobs, plus 1,500 to 2,000 construction jobs over about a two year period; you don't find projects like that that come along out here very often," Meyer said.
With the Big Stone II project ended, both sides in the power debate are looking ahead. Big Stone's Mark Hanson said utility companies will need to find other sources of power to meet their customers' needs.
Hanson also said the region will lose the construction of some new power lines needed to carry the planned Big Stone II electricity. The loss of those lines might affect wind energy construction, since the lines were planned to have extra capacity for renewable power.
Environmental groups opposing Big Stone II say the death of the power plant can be made up in other ways. Patrick Moore is with a group based in Montevideo called Clean Up the River Environment, or CURE. Moore said the region's power needs can be meet without building coal fired plants.
"We just feel like there's so much opportunity to bring about home-grown renewable energy and sustainable jobs for this new economy," Moore said. "There's a lot of potential right now, right here that we can develop."
Moore said more renewable energy projects like wind power should be constructed to help meet future electricity needs. He said more natural gas power plants may be necessary to handle peak loads.
Moore also said cutting back electricity use through conservation is another way to balance power supply and demand. All of those ideas are sure to get a closer look, as the name Big Stone II fades into history.
