New fight over Big Stone power plant centers on carbon costsby Stephanie Hemphill, Minnesota Public Radio
Backers of a proposed coal-fired power plant near Ortonville had to downsize their project after two partners dropped out. This time around, the project's backers are figuring in the cost of carbon dioxide emissions.
St. Paul, Minn. — We've been hearing about the Big Stone II project for about three years now.
The basic idea hasn't changed. It's still a big coal-fired power plant to be built on the Minnesota-South Dakota border. The idea is to produce enough electricity for as many as 580,000 homes, instead of the 630,000 in the original proposal.
But here's what's new: The project's backers -- there are now five, instead of seven -- are starting to include the future cost of carbon emissions in their planning.
This is something environmental groups have been asking them to do.
Dan Sharp, communications manager for the Big Stone project, says the plant would burn about 2.5 million tons of coal each year, which would produce about four million tons of carbon dioxide annually.
"The opponents to the plant, or the environmental community in general, will say there is some social cost or some economic cost for putting all that carbon dioxide in the air," Sharp says. "Even though we don't have a federal or state program now that restricts carbon dioxide in the air, it's likely that there will be one, and so you've got to somehow account for all this carbon dioxide you're putting in the air."
How much should a power plant have to pay to emit carbon dioxide? Dan Sharp says Big Stone is using a figure suggested by the Minnesota Department of Commerce, $9 a ton.
The whole idea behind a future charge for carbon emissions is to raise the cost of fossil fuel energy. And the idea behind that is to push power producers toward cleaner sources.
The backers of Big Stone are low-balling the price of their carbon emissions to make the plant look more attractive, according to critics of the project, like Beth Goodpaster, an attorney with the Minnesota Center for Environmental Advocacy.
"To the extent that the costs of Big Stone are wildly underestimated, it's working a bias against the alternatives that we could be putting in place instead," says Goodpaster.
She says the $9 a ton is low, because the government is eventually going to start clamping down on carbon emissions, and the cost is going to rise. Big Stone owes it to its customers to be realistic about the cost of burning coal, Goodpaster says.
"It's an improvement that they're at least considering something," she says. "But we think that it's not prudent to just pick the lowest number that is out there."
No one can predict how high the cost of carbon emissions could go. But Xcel Energy and other utilities are planning as if it could eventually reach as much as $40 a ton.
At $9 a ton, Big Stone customers would see their bills go up by a penny per kilowatt hour. That doesn't sound like a lot, but it's 15 percent tacked on to monthly bills.
Whatever the cost, project spokesman Dan Sharp says the power plant is the best way to meet the region's growing need for electricity.
"Big Stone II is critically needed to maintain reliability, and simply to maintain the supply of electricity that Minnesotans need," Sharp says.
When Big Stone goes before the Public Utilities Commission this week, its backers will have to argue the project is cost-effective. Even though the plant has been reduced in scale, the price to build it has increased from $1.2 billion to $1.6 billion.
The PUC will make a decision on the plant after the first of the year.
- All Things Considered, 11/12/2007, 5:50 p.m.