Otter Tail asking for recovery of transmission planning costs for the abandoned "Big Stone Two"

May 29, 2013

Otter Tail Power Company wants to extend a rider on customers’ electric bills that was put in place to pay for the costs of the abandoned Big Stone Two power project.

Otter Tail was one of several utilities that had planned an expansion of the existing Big Stone plant in northeast South Dakota. It – along with Montana-Dakota Utilities – asked for and received an “advanced determination of prudence” from North Dakota’s Public Service Commission. That meant the utilities could receive more favorable interest rates, and could start collecting costs from customers, once construction started. But most of the partners walked away – and the project was cancelled.

Under the “ADP” law, Otter Tail was granted a rider to recover its costs. It averaged about 90 cents on a customer’s monthly bill. That rider was set to expire. But now Otter Tail has asked for it to be continued for another eight months – to cover costs associated with transmission that also didn’t materialize. And the PSC is considering it.

“I want to make sure that the last costs identified and requested to be extended for eight months will be justified," said PSC Chairman Brian Kalk. "When this is all said and done, if there is more transmission built in that area, we don't try and double bill customers for  that transmission.”

Kalk says since this happened – he’s been more skeptical of requests for advanced determination of prudence.

“Speaking for me personally, I think companies will have to make a strong request for an ADP on anything," said Kalk. "We want to make sure that if they do get the ADP, they actually do construct. And if they don't, their shareholders will have to eat some of those costs.”

Otter Tail is asking for just under a million dollars for the work done on planning for transmission lines that have not materialized.