DES MOINES -- The state's City Development Board Thursday rejected a plan by the city of Waterloo to annex 345 acres northeast of the city to accommodate a proposed coal-fired power plant.

Environmental groups and some local residents voiced their opposition to the annexation at a public hearing last month in Waterloo. Elk Run Energy Associates, a subsidiary of LS Power, wants to build a $1.3 billion, 750-megawatt power plant in the annexed area.

The board, on a 3-2 vote, found that Waterloo's annexation plan, which included land from owners who objected to the annexation, did not meet the state regulations required for approval.

Property owner Merle Bell was opposed to the idea of the 37-acre farm that has been in his family for generations being annexed by the city.

Board member Susan Cosner of Panora questioned why the city said it would not annex the land if it weren't for the power plant project.

"I don't think that I was convinced at the hearing that the planning was to the level that I think a city the caliber and size of Waterloo should have been performing," Cosner said.

Waterloo Mayor Tim Hurley, who attended the meeting, said they'll look at their alternatives but did not know what the next step might be.

"We'll put our heads together and really see what it means," Hurley said.

He defended the city's work on the annexation plan.

"I know how hard my staff worked. I know what kind of homework was done. And the fact that we didn't make that apparent, I'll accept that for now, and we'll take that as a lesson learned," Hurley said.

He said whether they file another application for annexation would depend on what the power company wants to do next.

Mark Milburn, a project development manager for Elk Run Energy, was surprised by the board's action.

"I think we just need to go back and look at what the board said, and then work with the city and try to understand what's the best way to respond," Milburn said.

Milburn didn't see Thursday's action as a major setback to the project, which must still gain other regulatory approvals from the Iowa Utilities Board and the Iowa Department of Natural Resources.

He said the proposed project site does not have to be annexed by the city to move forward. The company chose the site because of the available land and the access to a railroad and water supply, Milburn said.

Annexation by the city would mean police, fire and utility services to the site, according to Milburn.

Mark Kresowik, a conservation organizer with the Sierra Club, praised the vote. He said his group has concerns about the power plant's impact on global warming and its health effects.

"I think it's definitely a major victory for the opponents of the coal-fired power plant and again, for the citizens of Waterloo," Kresowik said.

Milburn rejected claims that the power plant would be harmful for residents or the environment. He said the data opponents are citing are based on coal-fired plants built decades ago that aren't as efficient and don't have the emission controls the proposed plant will have.

"The project will not be detrimental to human health or the environment," Milburn said.

Contact Charlotte Eby at (515) 243-0138 orchareby@aol.com.