Coal Creek:

A Power Project With Continuing Controversies Over Costs, Siting, and Potential Health Hazards

EMD-80-16: Published: Nov 26, 1979. Publicly Released: Dec 27, 1979.

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The Coal Creek power project is a joint venture by two rural electric power cooperatives financed by Rural Electrification Administration insured and guaranteed loans. Changing economic, environmental, and regulatory factors, public opposition expressed in court suits and acts of vandalism, and certain management decisions have resulted in increases in estimated costs from $537 million in 1973 to over $1.2 billion in 1979. A GAO report examined the large increase in costs; the transmission line siting process in North Dakota and Minnesota; and the potential adverse health, welfare, and environmental effects from extra high voltage, direct-current transmission lines.

The wisdom of certain management decisions with regard to the construction and development of the project could not be determined at the time of the study. It was believed, however, that there was inadequate initial planning for a project of the magnitude envisioned and that the decision to proceed with the project should have been reevaluated as conditions changed following a 1973 feasibility study and the oil embargo of that year. Regarding the siting issue, GAO found that (1) the enactment of power plant and transmission siting laws in both North Dakota and Minnesota probably exacerbated discontent over the project; (2) there were differences in state applications of siting procedures which affected the balance of environmental, agricultural, and cost priorities; (3) while the actual loss of land for crop use was not extensive, factors such as aesthetics, access to rights-of-way and disruption of normal farming practices also needed to be considered; and (4) siting costs, delays, and public resentment against the project could have been reduced through more openness with the public. GAO found no conclusive evidence that being near direct-current transmission lines is a direct threat to human health. The rural electric cooperatives have been required to conduct a 2-year study of ozone generated by the transmission line to determine its effect, if any, on the atmosphere.

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