Power Engineering - Minnesota has deal on coal power plant

3 September 2007 - The Minnesota Commerce Department has unveiled a pact with utilities that could smooth the way to build a $1.6bn, coal-fired power plant in South Dakota, on the border 175 miles west of Minneapolis.

A top Minnesota official said the deal would reduce mercury pollution, find ways to offset greenhouse gas emissions and ensure that rural Minnesota gets the power it needs. But foes of Big Stone II accused the Pawlenty administration of suddenly shifting course and supporting a plant that'll release 4.7m tons of carbon dioxide into the environment every year for the next half-century.

"I'm just spitting mad," said state Sen. Ellen Anderson, DFL-St. Paul. Hours before, she had introduced Gov. Tim Pawlenty to a group of children at the State Fair, hailing him as an environmental champion. "I'm outraged the governor has turned around and flip-flopped on this coal plant and is supporting it now."

But Pawlenty's point man on the Big Stone II agreement said the governor's environmentalist credentials are underscored in the deal.

The agreement with the utilities that want to build Big Stone II includes a requirement that they offset the emission of greenhouse gases, offering the utilities nine options for doing so said Edward Garvey, deputy commissioner of energy and telecommunications at the Minnesota Department of Commerce.

"The agreement between the [Commerce Department] and the Big Stone II owners resolves issues related to project costs, mercury emissions, water use, energy conservation, renewable energy," the agency said in a statement.

Pawlenty earlier this year championed and signed new laws setting strict limits on greenhouse gas emissions and mandating that utilities use more renewable energy. Garvey said the deal on Big Stone II advances those goals.

"This is the first and only carbon offset applied to a new facility that we know of in the country," said Garvey, who in January wrote a letter outlining problems with Big Stone II -- from carbon dioxide emissions to the source of water for cooling towers to electricity rates. The letter said the proposal at the time was unacceptable but left the door open to talks.

All of those objections, Garvey said, are answered in a 17-page agreement reached in talks between state commerce officials and a consortium that includes Otter Tail Power, Central Minnesota Power, Great River Energy and the Southern Minnesota Municipal Power Agency. They already operate another coal plant, Big Stone I, next to the Big Stone II site.

Opponents of Big Stone II were sceptical that the Pawlenty administration did anything but side with utility interests, however.

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