Dakota Gasification Makes Payment to Federal Government

The Associated Press reported today that Dakota Gasification, a subsidiary of Basin Electric Power Cooperative, has paid the federal government $57.2 million as part of a deal made when Basin Electric purchased the Great Plains Synfuels Plant in 1988 from the U.S. Energy Department. The government took over the plant when the original consortium that built it defaulted on $1.5 billion in federally-guaranteed loans.

As part of the $85 million purchase, Basin Electric agreed to transfer tax breaks and share revenue with the Energy Department if economic conditions including natural gas price levels were met. Since then, Dakota Gasification has made eight payments totaling $379 million. When unused tax credits are factored in, the payments have allowed the federal government to recoup over $1 billion from the project, according to a Basin Electric spokesman. According the AP, the ninth and final payment is scheduled to made in 2010.

Dakota Gasification makes synthetic fuel from lignite coal.

To read the AP article, click here.