Montana-Dakota Utilities, a division of MDU Resources Group (NYSE: MDU), and Otter Tail Power are making progress on the installation of an air quality control system (AQCS) on the coal-fired Big Stone power plant, said a July 9 update filed by Otter Tail Power at the North Dakota Public Service Commission.
On May 9, the PSC issued a findings of fact conclusions of law and order granting advance determination of prudence on this project. The commission also ordered these periodic updates on the state of the project. Otter Tail Power is a unit of Otter Tail Corp. (NASDAQ Global Select Market: OTTR).
One factor in the need for the project is the U.S. Environmental Protection Agency’s review of the South Dakota Regional Haze State Implementation Plan (SIP). EPA published in the Federal Register its proposed approval of the South Dakota Regional Haze SIP in December 2011. The state of South Dakota and the National Park Service filed comments in support of the requirements for Big Stone. The Sierra Club and National Parks Conservation Association jointly filed comments opposing portions of the South Dakota Regional Haze SIP. On March 29, the Administrator for EPA Region 8 signed as a final rule the approval of South Dakota’s State Regional Haze SIP. The final rule was published in the Federal Register on April 26 and became effective on May 29.
Total project cost actually incurred through June 30 is about $14.5m (excluding individual company regulatory costs). About half of the costs to date have been for project development, management and engineering. Procurements for surveying, geo-technical investigation, flue gas desulfurization (FGD) system, selective catalytic reduction (SCR) catalyst and site preparation have cost around $7.5m of the total.
Procurement activity continues for the project. At this time the owners have about 25% of the project budgeted costs either under contract or have bids in hand that are being reviewed. The cost for this 25% of the project is below budgeted expenditures. “Current market conditions do not indicate any change in the foreseeable future though it is too early to predict conditions for the entire duration of the project,” the update said.
The EPA has issued its Mercury and Air Toxic Standards (MATS), also known as the utility Maximum Achievable Control Technology (MACT) rule, which is for the control of mercury and other hazardous air pollutants. Several petitions for review have been filed in federal court which could delay its effective date. The rule, as issued, would require the Big Stone plant to likely add activated carbon injection (ACI) to the project, Otter Tail noted. The cost of the ACI is estimated at about $5m. This was expected and considered during AQCS evaluation and engineering. ACI would add 1% to the total project cost.
Big Stone is a 475-MW plant located near Milbank, S.D. Big Stone is jointly owned by the applicants and also NorthWestern Corp. d/b/a NorthWestern Energy (NYSE:NWE). Otter Tail holds a 53.9% ownership interest in the plant and acts as its operating agent. Montana-Dakota holds a 22.7% ownership interest.
The planned air controls consist of a semi-dry FGD system to reduce SO2 emissions, SCR with separated overfire air to control NOx emissions, and balance of plant modifications necessary to install and operate the control technologies, including a replacement baghouse and boiler modifications. This combination of technologies has been deemed Best Available Retrofit Technology (BART) by the South Dakota Department of Environment and Natural Resources in its Regional Haze SIP.