The business case was strong for a line to move that power out of state, especially after California began contemplating a renewable portfolio standard that would require utilities to obtain 33% of their power from renewable sources. Northwestern began the line application process in 2008.

Winds of Change

But in 2010, Jefferson County, Mont., sued the state and won, claiming it had not been properly consulted in planning for the line. The state won on appeal, but the delay forced the U.S. Bureau of Land Management, which was overseeing the line's environmental impact statement, to scrap the existing study and restart the process.

In the meantime, market dynamics changed. A boom in natural gas, fueled by hydraulic-fracturing technology, quickly produced a gas glut. The surplus undercut the economics of wind power, which also were threatened by the expiration this year of the federal wind-production tax credit. And the California renewable portfolio standard largely excluded wind power from distant states, such as Montana. A weak economy also depressed the demand for any new power sources.

Yet, until earlier this year, Northwestern still believed the line was a good investment. It expected that a draft environmental impact statement (EIS) was imminent.

But this summer, the South Dakota-based utility learned of an unexpected problem: sage grouse in Idaho. The EIS would be delayed at least two years, with no guarantee it would be finished by then.

After eight years and more than $24 million, Northwestern decided last month to pull the plug on the line.

"It was the straw that broke the camel's back," says Mike Cashell, the firm's vice president of transmission. "We just could not get comfortable, we could not see an end in sight. It was just another round of uncertainty."