USDA Rural Utilities program explains Highwood funding pullout

Top federal officials Monday said concerns over rising construction costs, legal challenges and other potential delays led them to pull the plug on financing for the proposed Highwood Generating Station east of Great Falls.

“The feasibility of it made us a little bit nervous,” Rural Utilities Service Administrator James Andrew said in a phone interview from Washington, D.C.

Between 2001 and 2007, the USDA’s Rural Utility Service was the primary means for rural electric cooperatives to finance new construction of transmission and generation. RUS provided $1.3 billion in funding for new coal-fired plants

But RUS said last month it had been directed by the federal Office of Management and Budget not to use any of its 2008 funding for loans to build base load electric generation.

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