The Montana Department of Environmental Quality said it received a request from the co-op earlier this week to revoke the air permits for the proposed $900 million Highwood Generating station and will instead build a 120-MW natural gas fired plant.
Brent Lignell an environmental engineer with the DEQ, said the utility is now seeking an air permit for the gas-fired plant that will be built at the same site.
Cooperative officials did not return calls seeking comment about their reasons for ending the coal project.
In early February the utility said it was postponing construction of the coal-fired plant because of delays in securing permits and financing and would instead build the gas-fired plant and a 6-MW wind farm to meet what it said is a pressing need for power.
Environmental activists, however, claimed partial responsibility for killing the project, which they have been battling since DEQ issued the co-op a draft permit in 2006.
Anne Hedges, program manager of Montana Environmental Information Center, said the co-op scrapped the coal-fired project after it failed to obtain financing from the U.S. Department of Agriculture's Rural Utilities Service and "because of the uncertainty caused by the lawsuits we filed at every turn."
A coalition of state and federal environmental groups, including the MEIC, challenged the draft air quality permit because it lacked limits for carbon dioxide and fine particulate matter, according to Hedges.
The groups followed up by suing RUS for failing to consider the impacts of global warming in the environmental analysis it conducted on the facility.
RUS in February 2008 said it was withdrawing its funding for the Highwood plant and from all other coal-fired projects it was considering, citing uncertainty over future regulation of CO2 emissions.