NEW YORK Nov 3 MDU Resources Group Inc (MDU.N)
said late Monday it would not build the planned
500-to-600-megawatt Big Stone II coal-fired power project near
Milbank, South Dakota.
MDU said in a release the project required additional
participants to move forward but none have committed.
In September, Otter Tail Corp (OTTR.O), Big Stone II's lead
developer, withdrew from the project due to the economic
downturn and the high level of uncertainty associated with
proposed federal climate legislation.
The federal government was working on legislation to limit
carbon dioxide and other greenhouse gas emissions -- likely by
putting a price on emitting those emissions -- in an effort to
stop global warming from potentially damaging the planet.
The burning of coal to generate power produces about twice
as much CO2 as natural gas.
The Big Stone II project was estimated to cost about $1.6
billion, not including needed transmission upgrades, according
to a spokesman at MDU.
He noted some transmission was already in place as there
was an existing 470 MW coal-fired Unit 1 at Big Stone, which
entered service in 1975 and burns coal railed in from the
Powder River Basin in Wyoming.
Big Stone is located in Grant County in South Dakota about
200 miles west of Minneapolis, near the South Dakota-Minnesota
Unit 2 was to enter service in the 2015-2016 timeframe, the
MDU HAS ENOUGH POWER
Montana-Dakota Utilities Co, a subsidiary or MDU, said it
was "disappointing that Big Stone II will not be built," but
noted the utility had adequate electric supplies for the near
"We have a purchased power agreement through 2015 that was
to bridge us to Big Stone II going online; we still have that
agreement in place," Dave Goodin, president and CEO of
Montana-Dakota, said in the release.
"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 options," Goodin said.
The spokesman noted the area had a lot of wind potential
but needed more base load power. Base load generation runs
around the clock and usually includes coal, nuclear and
combined cycle natural gas.
The other Big Stone II participants were Central Minnesota
Municipal Power Agency, Heartland Consumers Power District and
Missouri River Energy Services.
MDU, of Bismarck, North Dakota, is a diversified energy
company with electric and natural gas utility distributions in
North Dakota, Montana, South Dakota, Wyoming, Minnesota,
Washington and Oregon.
(Reporting by Scott DiSavino; Editing by Walter Bagley)