 
January 22, 2008
South Dakota Supreme Court upholds PUC decision favoring Big Stone II
Fergus Falls, Minnesota—On January 16 the South Dakota Supreme Court affirmed the South Dakota Public Utilities Commission’s decision to grant Big Stone II project participants a permit to construct an advanced super-critical pulverized coal power plant next to the existing Big Stone Plant in South Dakota. The Supreme Court said that the PUC followed existing legal guidelines in approving the site permit.
Project opponents had appealed the PUC decision on the basis that carbon dioxide concerns had not been adequately addressed. The Supreme Court rejected those claims. In a unanimous decision, the Court noted that “the PUC entered a well-reasoned and informed decision when it concluded that Big Stone II would not pose a threat of serious injury to the environment.”
Ward Uggerud, senior vice president for Otter Tail Power Company, lead developer for the project, reiterated that the proposed project meets environmental standards. “The Supreme Court found that the PUC carefully examined the evidence, weighed it, and made a decision that is supported by the evidence,” he said.
In addition to Otter Tail Power Company, Big Stone II project participants include the Central Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services, and Montana-Dakota Utilities Co. Together the participants serve more than one million electric customers in Minnesota, South Dakota, North Dakota, Iowa, and Montana. For more information, visit www.BigStoneII.com.
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January 14, 2008
MRES announces 2007 scholarship program
Application forms and other information about the Missouri River Energy Services® (MRES) Scholarship Program will soon be mailed to all MRES member community high schools. The deadline for students to submit applications is March 15.
Each year, MRES provides $1,000 scholarships to ten high school seniors who reside in MRES member utilities’ service areas. These students will be required to enroll in a full-time undergraduate course of study at an accredited two-year or four-year college or vocational-technical school no later than the fall of 2008.
Awards are renewable for up to three additional years for students who meet academic performance requirements.
An independent scholarship management firm administers the program. Fifty percent of the selection criteria are based on academic achievement. The remainder is based on a combination of factors, including work experiences, activities, awards and honors, career goals and plans, and unusual circumstances such as hardships. Students who plan to pursue electric industry-related fields of study are given some preference.
Information about the MRES Scholarship Program is available at each high school in MRES member communities that buy power from MRES.
January 14, 2008
Construction of two wind farms is progressing
By early 2008, a collection of 19 wind turbines constructed near the Minnesota communities of Marshall and Odin has the potential to produce up to 38.7 megawatts of wind-generated electricity for members of Missouri River Energy Services (MRES). That’s enough electricity to power more than 12,500 homes. The two wind projects are the latest addition to the growing renewable energy portfolio of MRES and its members.
Construction of the Marshall wind farm, which is located in Lyon County, began July 23, 2007. Jeff Peters, director of Marketing and Development at MRES, said that the construction crew had installed five of the nine wind turbines by early December, with the remaining turbines completed about two weeks later.
Turbines No. 1 and No. 2 at the Marshall farm began operating commercially in mid December. Both rated at 2 megawatts of capacity, the turbines will qualify for the State of Minnesota’s Renewable Energy Production Incentive (REPI). The REPI program, which was enacted in 1997, provides an incentive of one cent per kilowatt-hour for 10 years for new wind energy projects rated at 2 megawatts or less.
The other seven turbines at Marshall are part of the Community-Based Economic Development (C-BED) program that is intended to foster community-based wind energy development throughout Minnesota. The C-BED initiative was passed into law by the Minnesota Legislature in 2005.
Iowa-based John Deere Wind Energy and The Rahn Group, a private investment firm located in Edina, Minn., are joint developers of the Marshall project. Other participants in the project include Western Minnesota Municipal Power Agency (WMMPA), which owns 7.6 miles of transmission lines from the new Marshall Southwest Substation to the wind turbine facilities, and Marshall Municipal Utilities.
WMMPA is the principal financing agent for MRES and Marshall is an MRES member.
“This project has been on the drawing books for several years, but it didn’t come to fruition until 2007, when we were able to partner with The Rahn Group, a C-BED developer,” Peters said. “The Rahn Group is able to bring equity and turbines to the project with its unique partnership with John Deere.”
MRES is working with the Rahn Group and California-based Edison Mission Energy on the Odin wind farm situated on two half-sections of land in Watonwan and Cottonwood Countis, some 60 miles southeast of Marshall. This project features 10 wind turbines with a capacity of 20 megawatts of wind generation, of which MRES has agreed to purchase the output. The project will interconnect directly with the Midwest Independent Transmission System Operator market.
Peters said about 75 percent of the Suzlon turbine components are on site, and project managers are awaiting the arrival of a 500-ton crane from the Marshall wind farm. Turbine construction will begin soon and Peters expects the turbines to begin generating electricity no later than June 2008.
Both wind farm projects will help meet the renewable energy standards (RES) set by the state of Minnesota earlier this year. The RES requires electric utilities to provide 25 percent of their power from renewable resources by 2025.
“These newest wind farms affirm our commitment to diversify and balance our power supply portfolio in an environmentally responsible way,” Peters said. “Our members and their customers will reap the benefits of wind as we harness the energy of this natural resource."
January 14, 2008
Big Stone II participants file modified plan
The proposed Big Stone II power plant remains the least-cost option for meeting the growing electrical demands of customers of the five regional utilities, according to revised resource plans presented by the utilities Nov. 13 to the state Office of Administrative Hearings for the Minnesota Public Utilities Commission (MPUC).
MPUC requested the revisions following the withdrawals in September of Great River Energy and Southern Minnesota Municipal Power Agency – two of the original participants in the Big Stone II project.
Each of the remaining utilities’ modeling shows that Big Stone II, in concert with additional renewables and energy conservation, is their least-cost option for providing baseload generation. Additionally, the revised plans showed that the plant and its associated transmission remain critical to regional electric reliability and the development of renewable energy resources.
The revised plans call for a coal-fired power plant of 500 megawatts. Participants’ plans remain unchanged to build and upgrade transmission facilities in Minnesota and South Dakota to accommodate delivery of power from the Big Stone II plant and from other generation, including wind power additions, in the region.
Impacts of 2007 Minnesota conservation and renewable energy legislation as well as an estimated $9 per ton tax on carbon dioxide emissions were included in the utilities’ revised plans.
The change in the size of the power plant will have no impact on the need for planned Big Stone Transmission facilities. A planner from the Midwest Independent Transmission System Operator (MISO) has testified that the plant could be reduced in size to 150-200 megawatts before the sizing of the planned transmission would be affected.
Big Stone II participants require a certificate of need from MPUC before the transmission facilities can be built or upgraded in Minnesota. South Dakota regulators have given their approval for transmission additions in that state as well as for the Big Stone II plant’s site, solid waste, surface water, and groundwater permits.
Big Stone II participants originally filed their transmission certificate of need application with the MPUC more than two years ago. On August 15, 2007, administrative law judges, who reviewed the case in detail, recommended that the project be approved.
In a recent development, the remaining project participants testified that additional parties have expressed interest in taking the place of the two departed participants. “The fact that others are expressing serious interest in this project gives even more credence to the Big Stone II participants’ consistent stance that new baseload generation is vital for our region,” said MRES CEO Tom Heller. “As for the Big Stone Transmission project, these facilities are needed with or without additional participants.”
A supplemental evidentiary hearing before an administrative law judge is scheduled to begin early next year. Oral arguments before the MPUC are scheduled for April 2008, and its decision could be made by mid to late spring.
In addition to MRES, the other project participants are the project’s lead developer, Otter Tail Power Company, Central Minnesota Municipal Power Agency, Heartland Consumers Power District, and Montana-Dakota Utilities Co. Together, the participants serve more than one million electric customers in Minnesota, South Dakota, North Dakota, Iowa, and Montana.
September 24, 2007
Big Stone II announces participant changes
Fergus Falls, MN—Big Stone II officials announced today that Great River Energy has chosen to withdraw as an owner in the project. In addition, Southern Minnesota Municipal Power Agency will not be participating as an equity owner and is evaluating a potential capacity arrangement.
In informing the project of their decisions, Great River Energy representatives acknowledged that the region needs additional generation resources, and SMMPA representatives emphasized their continuing support for Big Stone II as a critical resource in helping meet regional needs.
According to Great River Energy representatives, their decision stems from an independent resource planning analysis that considered a number of factors unique to Great River Energy, including the company’s changing demand and other resources they are developing and purchasing. Great River Energy’s share of the proposed 630-megawatt Big Stone II was 122 megawatts.
The Big Stone II project agreement establishes restatement-of-participation dates at which all participants must affirm their continuing commitment. With the next such date being September 21, 2007, Great River Energy’s members elected to discontinue participation in the project.
Southern Minnesota Municipal Power Agency representatives said that they are unable to make a long-term commitment for Big Stone II baseload resources until they resolve litigation with SMMPA’s largest member, Rochester Public Utilities. Nevertheless, SMMPA and Big Stone II representatives are evaluating options that would allow SMMPA to remain as a participant in some capacity, though not as a direct owner. SMMPA’s share of Big Stone II is 49 megawatts.
Ward Uggerud, senior vice president of Otter Tail Power Company, the Big Stone II lead developer, said that Great River Energy’s exit does not change the remaining utilities’ need for new generation and transmission facilities. “The remaining utilities’ load requirements show Big Stone II to be the least-cost option for meeting our customers’ demand requirements—even if we were to choose to downsize the project given these changes in participation,” he said.
Uggerud pointed out that it is not uncommon for participation status to change in projects as large and extensive as Big Stone II, particularly when the regulatory process has been as protracted as this one has been. Furthermore, he stressed that the changes in Great River Energy’s and SMMPA’s participation should not have a material long-term impact on the Big Stone transmission Certificate of Need application before the Minnesota Public Utilities Commission. New and upgraded transmission facilities--identical to what’s proposed--still will be required.
Uggerud emphasized that an overarching goal of the Big Stone II participants as they assess their options is to keep intact the commitments they made under the August 31 Settlement Agreement with the Department of Commerce. “While certainly not without sacrifice, Big Stone II participants are proud of the provisions we have included in that document, such as offsetting all emissions of carbon dioxide associated with Minnesota customers, installing technology that is most likely to reduce 90 percent of the mercury emissions from both Big Stone I and II, and furthering the state’s interest in additional community-based energy development projects,” he said.
Uggerud added that Minnesota’s new renewable energy standard has magnified the need for transmission capacity. “Big Stone II and its associated transmission are critical in helping foster development of additional wind energy facilities and meeting Minnesota’s goal of meeting 25 percent of its energy needs from renewable resources by 2025,” he said.
The Big Stone II project and its related transmission is an alliance of investor-owned utilities and municipal electric utilities that have joined to meet the growing electricity needs of their customers. The five project co-owners are Otter Tail Power Company, Central Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services, and Montana-Dakota Utilities Co. The proposed power plant, to be constructed on the site of the existing Big Stone Plant near Milbank, South Dakota, will be a highly efficient, environmentally responsible, coal-fired plant. The transmission project will include upgrades and new construction of power lines, substations, and other infrastructure.
For more information visit www.bigstoneii.com.
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