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Analysis: 'Haze' cost impact exaggerated

BISMARCK (AP) -- North Dakota utilities are exaggerating the cost to consumers of proposed federal rules that would reduce pollution from two coal-fueled electric power plants, according to an analysis paid for by two environmental groups.

The study is being used in an argument between the federal Environmental Protection Agency and North Dakota's Health Department about the most efficient way to reduce nitrogen oxide pollution from the two plants.

The emissions contribute to haze that can reduce visibility in the Theodore Roosevelt National Park and the Lostwood National Wildlife Refuge in western North Dakota, which are some of the state's most environmentally pristine areas.

The utilities contend the EPA's preferred anti-pollution technology is much costlier, and potentially less effective, than the equipment favored by state health regulators.

The Sierra Club and the National Parks Conservation Association support the EPA's proposals. The analysis they commissioned, done by Resource Insight Inc., an Arlington, Mass.-based consultancy, concludes the EPA's plan would not increase customer electric rates as much as the affected utilities have forecast.

For Minnkota Power Cooperative Inc., using the EPA's plan instead of the state proposal would raise rates an additional 10.3 percent, the analysis states. Basin Electric Power Cooperative ratepayers would see their costs rise an extra 0.7 percent, the analysis estimates.

Wayde Schafer, a Sierra Club regional representative in Bismarck, said the utilities "have been scaring the public and the ratepayers" with forecasts that rates could jump 30 percent or more because of federal rules.

"The EPA plan cleans up the air much better than the state plan, and so since the cost to the ratepayers is going to be about the same, it seems like we might as well go with the cleaner plan," Schafer said.

Spokesmen for the two utilities said Friday the study's conclusions were flawed. Minnkota, which is based in Grand Forks, and Basin Electric, which has its headquarters in Bismarck, sell electric power to rural cooperatives, which is then resold to customers.

Minnkota believes it would cost $500 million to install the EPA's preferred technology at its Milton R. Young electric power station, southeast of Center in west-central North Dakota, spokesman Kevin Fee said Friday. The cost of technology advocated by the North Dakota Health Department is about $40 million.

Adopting the EPA plan would drive up ratepayers' costs between 20 and 30 percent, Fee said.

Basin Electric Power Cooperative estimates it would spend $700 million more to install the EPA's favored anti-pollution measures in its Leland Olds power station, southeast of Stanton.

Daryl Hill, a Basin spokesman, said Friday the cooperative could not estimate the impact on individual electric customers.

"It's such a variable number for all of the different cooperatives that we serve," Hill said. "But, obviously, it is going to impact their rates."

Steve Van Dyke, a spokesman for the Lignite Energy Council, an industry group based in Bismarck, said both utilities are practiced at estimating the effect of regulatory changes on their customers.