Otter Tail Power, the lead developer of Big Stone II, has just announced that it has withdrawn its support from the project. Activists in South Dakota and Minnesota have been fighting the 500-580MW coal plant for at least five years now, and let me tell you, it has been a rollercoaster ride.
Things were looking up earlier this year, when just days after Obama took office, the EPA revoked Big Stone II’s air permit. But months later, the developers turned in a revised air permit, which was later approved.
Then, this spring, the powerline that would carry the electricity from Big Stone II to Minnesota was approved by the Public Utility Commission on a 5-0 vote. This was after the PUC voted in 2008 3-2 to delay the powerline vote until more information on carbon costs and other variables was available. An independent report was commissioned that showed the estimated cost for the power plant was too low. This had led many to believe that the PUC might block the permit, but instead they decided to unanimously approve it.
This July, Elk River Municipal Utilities pulled their support from the project, citing cost and environmental issues. But a month later, the last environmental permits for the plant were approved, and the plant seemed headed to construction.
But earlier today, Otter Tail Power, the lead developer and project proposer, announced that it would no longer support Big Stone II. The press release notes that “the broad economic downturn coupled with a high level of uncertainty associated with proposed federal climate legislation and existing federal environmental regulation have resulted in challenging credit and equity markets that make proceeding with Big Stone II at this time untenable for Otter Tail’s customers and shareholders.”
The pullout of Otter Tail leaves only four developers, the Central Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services, and Montana-Dakota Utilities Co. Losing Otter Tail’s $400 million investment (of $1.6 billion) is no doubt hurting, but for now the four utilities are soldiering on. A responding press release noted that, “The remaining participants emphasized that Big Stone II will go forward if sufficient participants can be found to join the project.” I’d say that’s a pretty big if.