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Minnesota PUC releases Big Stone transmission written order - Otter Tail to decide if it will proceed with project

The Minnesota Public Utilities Commission today released its final written order following its January 15 unanimous decision to grant a certificate of need for Big Stone transmission.

Five regional electric utilities are working together to develop the Big Stone II power plant in northeast South Dakota and to construct and upgrade transmission lines that would carry electricity produced at the Big Stone II plant and numerous wind energy projects.

"The order gives more detail about the certificate of need approval, including conditions imposed on the Big Stone II project," said Mark Rolfes, Big Stone II project manager. "The written order gives us a firmer understanding on which to continue our planning."

According to Rolfes, the written order requires Big Stone II to abide by the provisions in an August 2007 settlement agreement with the Minnesota Department of Commerce. Those provisions include offsetting carbon dioxide emissions, mercury emission control, water use limitations, enhanced investment in energy efficiency measures, and the purchase of renewable energy generated by community-based projects. In addition, the order requires Big Stone II to conduct a feasibility study for employing a higher-efficiency boiler technology called "ultra-supercritical" and to construct the generation plant as carbon-capture retrofit ready. Otter Tail Power Company also is required to weigh the costs and benefits of keeping the company's Hoot Lake Plant on-line.

The order also discusses that -- while the MPUC presently doesn't intend to allow Otter Tail Power Company, the only Big Stone II participant over which it has ratemaking authority, to recover construction costs and future carbon dioxide regulatory costs over certain amounts -- the MPUC will defer treatment of these issues to a future rate case.

Ratemaking authority for the balance of the project (88%) is held by public power municipal authorities and other states to be served by the project. Otter Tail Power Company will assess whether and how it can accept these conditions.

"The Big Stone II project continues to make preliminary plans for construction to begin in late 2010," Rolfes said.

Big Stone II participants are Otter Tail Power Company, Central Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services and Montana-Dakota Utilities Co. Together, these entities serve more than one million people in Minnesota, South Dakota, North Dakota, Iowa, and Montana.