Can proposed Gregory pumped storage project drive regional economic growth?

Summer 2023 will kick off an extensive study phase over a proposed hydropower project in Gregory County, testing the potential effect on groundwater, soil structure, wildlife, recreation and more.

A pumped storage project in Ludington, Michigan, which was completed in 1973 at a cost of $3 billion in present-day dollars and still drives regional economic growth.
Contributed: Consumers Energy

BURKE, S.D. — Backers of a proposed hydropower project in Gregory County have filed a new study plan document responding to the previous round of stakeholder comments, marking a major step in the lengthy federal permitting process ahead.

If all goes according to plan, the pumped storage project could be completed in 2035. However, before that, the companies behind the project will have to manage the coming hurdle of 26 different studies on its feasability and impact, including topics from groundwater evaluations and slope stability to fluid dynamics and ice processes.

Those studies will be handled by a third-party company.

The project would essentially function as a giant water battery, using renewable energy to pump water uphill from Lake Francis Case to a 1,100-acre upper reservoir during times of low energy demand.

During times of higher stress on the grid, the stored water flows out, generating hydropower.


The 1,800 megawatts produced per hour — a rate that the project can maintain for 26 hours before running out of water — could power about 1.4 million homes for that time.

Major points of concern from residents and local officials include the impact of the construction and operation of the pumped storage project on local recreation, water quality and wildlife habitat, as well as the possibility for shifting or eroding soils to lead to flooding.

“There are a lot of issues with the land that it will consume, but also our Snake Creek Recreation Area sits right below,” said Sen. Erin Tobin, of Winner, whose district includes the proposed project area. “We have a huge fishing tourism business in that area. And we also have some water intakes for our rural water system.”

However, the two main backers of the some $5 billion investment, Missouri River Energy Services and MidAmerican Energy, say the positive economic impact of the pumped storage project will outweigh these concerns, pointing to similarly sized projects in Michigan, Virginia and Tennessee that have been boons for the local economy.

“We really want this project to be not only successful for our goals of reliability but also successful for the communities that we serve in the area,” Joni Livingston, the vice president of communications at Missouri River Energy Services, told Forum News Service.

Pumped storage projects making comeback in green economy

Across the United States, there are about 10 major operating pumped storage hydropower projects and a handful of smaller projects as well.

While the first project in the country was completed in 1929, the real craze began in the 1960s and 1970s, when pumped storage projects were often built to accompany nuclear power plants.

The logic went that, at night, when energy demand is lowest, the continuous production of a nuclear power plant could be channeled into storing water uphill.


That era was also the beginning of the idea — first broached by the U.S. Army Corps of Engineers — for a project in Gregory County, utilizing the bluffs overlooking the Missouri River to turn the potential energy of stored water into usable, kinetic energy.

Western Minnesota Municipal Power, which plans to build a hydropower project in Gregory County, is scaling its plans back, according to documents filed Dec. 12. Still, residents remain opposed.

The four decades that followed represented a sort of chasm in pumped storage proposals; however, with a growing interest in variable energy sources like wind and solar, a new desire for pumped storage has emerged, with dozens of in various stages of the years-long permitting process overseen by the Federal Energy Regulatory Commission.

“It's a great combination because it does provide for large-scale storage so that you can make wind and solar as reliable as you possibly can,” said Tom Sullivan, a founding principal at Gomez and Sullivan Engineers, the company acting as the licensing consultant for the project.

Opponents of the project question the green energy framing.

"An energy storage facility that permanently alters an area known for its natural beauty, recreation, and agricultural productivity, far from the population centers that require the energy, seems questionable at best," said Fawn Swift, a local resident active in citizen groups opposed to the project.

Balancing local concerns with economic opportunity

A town of around 8,000 on the banks of Lake Michigan, Ludington, Michigan, is the site of one of the largest pumped storage projects in the country, an 826-acre reservoir completed in 1973 at a present-day price tag of some $3 billion.

“For most of us, it's just become part of who we are and what we're known for,” Mitch Foster, the city manager in Ludington, told Forum News Service.

In terms of harm to water quality or local fisheries, major concerns of residents in the area, Foster said he’s seen little evidence of either ill effect.


A visual of the Pumped Storage Project
A mock-up of the proposed pumped storage reservoir, which would sit on a bluff approximately 700 feet above Lake Francis Case in Gregory County.
Courtesy Missouri River Energy Services

While the Ludington project and the proposed Gregory project have some key differences — for one, a lower reservoir of Lake Michigan has different challenges than a lower reservoir in motion like Lake Francis Case — the project has spurred development and drastically increased the local tax base.

“The tax value alone allows a community like Ludington, where we don't have massive property values, to pass $100 million bond without having a massive tax increase, simply because of the power plant,” he said.

MidAmerican Energy is making similar promises to local governments in Burke and Platte, calculating an annual property tax boost of nearly $20 million after the project is completed, according to Nickelle Stevens, a communications manager with the company.

Those dollars would be split between local schools and counties, with the majority going to Gregory County and the Burke School District.

Other economic benefits touted by the companies include the sales tax and general economic activity generated by the thousands of workers that will handle constructing the mammoth project.

Since the potential squeezing of housing and transportation resources was one concern among residents, the flow of construction workers plans to be a major part of a planned socioeconomic resources study.

The experience of Ludington, however, indicates this may not be a downside.

“We hired over 3,000 employees to build this facility in the four-plus years it took to build it,” said Eric Gustad, the regional community affairs director for Consumers Energy. “Most of those employees who moved to Mason County stayed in the community and helped it grow to the size it is today.”


Leaving aside the potential damage to wildlife habitat, recreation and other characteristics of the rural area, some residents aren’t convinced the economic numbers will shake out as advertised.

“These tax estimates are inflated significantly by not accounting for the capital outlay cap per student for all schools, but even after having been informed of this error by the Platte Geddes School, they continue advertising inaccuracies,” Citizens Against Missouri River Pumped Storage Project, an advocacy group against the project, wrote in a statement to Forum News Service. “They are also aware of Burke’s significant opt-out which would undoubtedly be eliminated if the numbers were true.”

Study phase begins holistic review process

The study phase, which will largely take place this year but could have some spillover into 2024, is not necessarily a make-or-break process, explained Sullivan, who will be helping lead the process.

Instead, each study has a set of goals and objectives; rather than a specific threshold that each analysis must reach for approval, the full range of studies and potential mitigation ideas will be brought together in the final licensing application, which is scheduled for early 2026.

While some residents have expressed worries about the ability to trust a study at least indirectly commissioned by the energy companies behind the project, Sullivan indicated that the process is rife with checks and balances.

“[The Federal Energy Regulatory Commission] has resource specialists in every resource area of hydro-licensing and so they scrutinize any work that firms like mine do on a resource-by-resource basis,” he said. “And they're not afraid to ask for additional information if they haven't got everything that they need.”

Other stakeholders in that process include state and federal resource management agencies like the National Park Service and the South Dakota Department of Agriculture and Natural Resources.

The new study plan now opens a subsequent public comment period, which will last until April 24 and is accessible at . The bulk of physical studies is set to begin in June.


“We have to think about what our priorities are, especially considering the threats we face around the world,” South Dakota U.S. Sen. Mike Rounds said.

Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or

Jason Harward covers South Dakota news for Forum News Service. Email him at
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