Emissions

Otter Tail Corp. announces feasibility study for second plant at Big Stone

FERGUS FALLS, Minn., Oct. 3, 2001 — Otter Tail Corporation CEO John MacFarlane announced today that Otter Tail Power Company has entered a two-year business development study to investigate the feasibility of another electric generating plant on the site of the existing Big Stone Plant near Milbank, S.D.

“The decision,” said MacFarlane, “is not to proceed with construction, but rather to perform further due diligence regarding the project and the region’s anticipated energy needs. Based on studies that point to a potential energy shortfall in the Mid-Continent Area Power Pool by 2007 and our long-standing commitment to meet our customers’ energy needs in a low-cost, environmentally responsible manner, we see this as a prudent act of stewardship.”

In making the announcement, MacFarlane said that a recently completed study includes estimates by MAPP and a highly regarded independent market analyst that energy consumption in the region will increase by 15 percent to 25 percent during the next decade. “We think it’s essential to respond to that knowledge,” he said. “The study also points to a highly efficient coal-fired plant in the 600-megawatt range as being the most cost-effective choice for helping to meet the anticipated need for increased generation.

“We’ll investigate a project that would use state-of-the-art emissions-control technology to make it one of the cleanest coal-burning plants in the world. But because a project of this size requires a considerable amount of discussion, negotiation, and preparation, we won’t make a final decision for at least two years. During that two-year period we’ll conduct environmental studies, refine the plant’s design, arrange for the needed transmission right-of-way, and obtain the essential air, water, and operating permits.”

MacFarlane emphasized that all of those issues directly affect the project’s feasibility. “The decision we make two years from now,” he said, “depends on resolving those issues. If the decision is to proceed, construction could begin in 2003 with commercial operation in the spring or early summer of 2007.”

Ward Uggerud, Otter Tail Power Company’s COO of energy supply, emphasized that the proposed plant would be designed with the same concern for efficiency and environmental safeguards as was the existing Big Stone Plant. “During more than 25 years of operation,” Uggerud said, “Big Stone has proven that a well-designed, well-maintained coal-fired plant can be an efficient, low-cost energy source as well as an environmentally friendly neighbor. Big Stone II, which would employ state-of-the-art coal-burning techniques and environmental-control technology, would offer further proof.”

South Dakota Governor Bill Janklow has expressed pleasure with the decision to proceed with the study. “This project, if completed, would do more than ensure a dependable source of electricity for the region,” he said. “It also would be a tremendous economic boost. Representing the largest investment of private capital in the state, it would result in a significant source of tax revenue and millions of payroll dollars to stimulate the state and regional economy. And the emphasis being placed on state-of-the-art environmental controls shows a genuine concern for the environment.”

Otter Tail Corporation is headquartered in Fergus Falls, Minn., and Fargo, N.D. Its utility operation, Otter Tail Power Company, provides electricity and energy services to nearly a quarter million people in Minnesota, North Dakota, and South Dakota. To learn more visit Otter Tail Corporation’s web site at http://www.ottertail.com or Otter Tail Power Company’s web site at http://www.otpco.com . Otter Tail Corporation’s common stock trades on The Nasdaq Stock Market® under the symbol OTTR.