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Minn. Green Policy Looms Over Neighbor

By GREGG AAMOT
The Associated Press
Tuesday, March 4, 2008; 5:24 AM

MINNEAPOLIS -- Minnesota's push to drastically cut state greenhouse gas emissions is being felt next door in South Dakota _ and that may be a problem for its neighbors.

A hoped-for power plant expansion has been approved by South Dakota's regulators, but plans to run powerlines deep into Minnesota have faced opposition from environmentalists who say it runs counter to Minnesota's move toward cleaner power.

It's a dilemma other power projects could face, experts say, as states pass a mishmash of environmental policies, in particular differing standards on renewable energy.

While Minnesota has a plan to cut greenhouse emissions by generating 25 percent of its energy through "clean" sources like wind by 2025, South Dakota has set no such standard.

As early as April, the Minnesota Public Utilities Commission will decide whether to grant permission for expansion at the project near Milbank, S.D.

Without Minnesota's backing, the so-called Big Stone II project _ which would serve 1 million people, about half of them on the western plains of Minnesota _ will be sunk.

"We're in a new era," said Dan Sharp, a spokesman for the five power companies proposing the project. "This is really a precedent-setting era where political activity in one state is having an impact on the economy and access to energy for people in other states."

Sharp said the latest modeling plan considered whether the plant expansion could generate the electricity it needs at a cheaper cost using wind, and determined it couldn't. He also said the company believes it has included an accurate projection of future carbon penalties in its costs.

Three years ago, seven regional power companies announced plans to expand the plant near Milbank, which first began producing power in 1975. Initial plans calling for a 630-megawatt plant were scaled back to between 500-580 megawatts, and two companies have since dropped out of the project.

The plan angered small-town environmentalists, advocacy groups and lawmakers who argue that feeding the plant's power to Minnesota cities would violate the spirit of its renewable energy standard, which was passed just last year.

Opponents also argue that the use of more coal-fired electricity to power Minnesota homes would crimp the state's efforts to promote alternative forms of energy, such as the wind that is already being captured by hundreds of turbines to the south and east of the existing Big Stone plant.

"By stopping this thing, you give wind or other sources a boost in Minnesota. But South Dakota is fine with the old technology. So it's one state's approach against another's," said Duane Ninneman of rural Ortonville, a consultant for a rural environmental group opposed to the project.

Opponents also believe consumers will end up covering future "carbon penalties" that the plant may have to pay for its greenhouse gas emissions.

Earlier this year, the South Dakota Supreme Court gave the project the go-ahead. The court decided that the plant would not increase emissions of carbon dioxide enough to seriously damage the environment.

That leaves the project in Minnesota's hands. Two administrative law judges who fielded testimony from opponents and backers of the project will offer a recommendation to the state's utility regulators, who will then decide whether to grant permits for the new lines, which would run 60 miles to Granite Falls and 70 miles to Willmar.

C. Baird Brown, a Philadelphia lawyer who specializes in energy projects, said states' differing environmental policies create uncertainty when it comes to evaluating how a project will ultimately serve a particular state's energy goals.

"One of the questions that can be asked in Minnesota is what progress is being made to meet the goals in the state's renewable energy portfolio, and is this project keeping us from getting there?" he said. "That's a fair question to be asking."

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On the Net:

Project: http://www.bigstoneii.com

Union of Concerned Scientists: http://www.ucsusa.org/clean_energy/fossil_fuels/bigstone2_background.html

© 2008 The Associated Press