North Dakota regulators on Wednesday approved the state's largest electric transmission project since the 1970s, a 250-mile power line that will link a western North Dakota power plant to a network of rural electric cooperatives.

The $312 million project, which its developer expects to complete by the end of 2013, is part of an elaborate power and transmission swap with another utility that has been developing wind energy projects in western North Dakota.

Tony Clark, chairman of North Dakota's Public Service Commission, said the new power line should decrease the chances for supply outages in northeastern North Dakota and northern Minnesota.

"There is a less robust (electric) transmission system in that part of the state, and so this will help provide some additional ... reliability," Clark said.

The three-member commission voted unanimously Wednesday to approve Minnkota Power Cooperative's route plans for the new power line. The decision clears the way for the Grand Forks-based utility to begin construction next month.

The commission has held several public hearings along the proposed route to hear from landowners, which Clark said resulted in minor changes to Minnkota's plan.

The line will carry electricity to Grand Forks from Minnkota's Milton R. Young station, about 40 miles northwest of Bismarck in western North Dakota's coal country.

Minnkota provides electricity to 11 rural electric cooperatives and a dozen municipal utilities in eastern North Dakota and western Minnesota, which together serve more than 130,000 customers.

The new transmission line will replace an existing line that runs from the Young plant to Hermantown, Minn., west of Duluth in northern Minnesota.

A Minnkota subsidiary earlier sold the existing power line to Minnesota Power, a unit of Allete Inc. of Duluth. Minnesota Power plans to use the line to carry renewable electricity from western North Dakota wind farms to its customers in the Duluth area.

As part of the deal, Minnesota Power is gradually relinquishing its right to buy half of the electricity from the Milton R. Young station, which is generated by burning coal. Minnkota will snap up the coal power and use it to meet growing electric demands from its own customers, regulatory filings say.

The new power line "will provide a more direct path" for electricity from the Young station to serve Minnkota's customers, according to an analysis of the changes by the U.S. Agriculture Department's Rural Utilities Service.

The changes will also "facilitate the development of additional wind generation in North Dakota by Minnesota Power for delivery to eastern Minnesota," the analysis says.

Clark said the new Minnkota line is the biggest power-line project undertaken in North Dakota since the development of several coal-fueled electric power plants in western North Dakota in the 1970s.

Commissioner Kevin Cramer said the power-line swap will boost Minnesota Power's ability to transmit wind-generated electricity from North Dakota to Minnesota, and meet a requirement in Minnesota law that utilities supply a portion of their electricity from renewable sources.

A federal tax subsidy crucial to the wind power industry's economic health faces an uncertain future, Cramer said.

"The interesting thing to see will be how Minnesota Power fills the full capacity of that ... line going into Duluth with wind, especially depending on how the production tax credit gets handled in the next Congress," Cramer said.