IMPORTANT NOTICES
Public Evidentiary Hearings on Siting and Routing Docket
JOINT PERMIT APPLICATION: PLANT SITE / HVTL ROUTE / NATURAL GAS PIPELINE ROUTEThe Mesaba Energy Project has two cases pending before the Minnesota Public Utilities Commission: the power purchase agreement (PPA) docket, which is not yet finalized; and the siting and routing docket, where evidentiary hearings are underway and the adequacy of the final Environmental Impact Statement will be considered.
The siting docket goes back to the Applications filed in 2006, regarding the preferred and alternate sites, routes for the HVTLs and the natural gas pipeline, and air and water permits. Some of the environmental concerns overlap with issues addressed in the EIS.
ALJ Steve M. Mihalchick conducted public evidentiary hearings in Taconite and Hoyt Lakes on January 29th and January 30th respectively. Excelsior Energy introduced prefiled testimony and witnesses were available for questioning.
The four volumes of the transcript of the public hearings on the Mesaba siting docket are available at the Grand Rapids Area Library.
Vol. I is from the first day of hearing, at Taconite.
Vol. II is from the evening session at Taconite.
Vol. III is from the day session at Hoyt Lakes.
Vol. IV is from the evening session at Hoyt Lakes.
Vols I and IV contain interesting questions that were put to the witnesses and some revealing answers.
CAMP and other interested parties have submitted comments. The CAMP comments can be accessed via the Take Action page.
MESABA'S DRAFT ENVIRONMENTAL IMPACT STATEMENT
Mesaba's draft EIS is critical to whether its permits and siting applications will be approved. It is being conducted jointly by the federal Department of Energy and the Minnesota Department of Commerce.
The draft EIS has now been released. Public hearings have been held in Taconite and Hoyt Lakes. Several individuals have submitted comments. CAMP comments are listed on the Take Action page.
MINNESOTA PUC DECIDES NOT TO DECIDE ON POWER PURCHASE AGREEMENT (PPA)
About 50 CAMPers attended the session for oral arguments at the Minnesota Public Utilities Commission in St. Paul on July 31st. All were impressed with the quality of the case put on by Xcel Energy and other parties in opposition to Excelsior Energy's proposed PPA. A smaller number attended the second day of arguments and the PUC's deliberations on August 2nd.
The key question before the Public Utilities Commission was whether to force Xcel into a long-term contract to purchase the output of Mesaba I. This is critical to Excelsior's ability to: receive additional federal financial support; and attract private funding.
The PUC unanimously decided not to approve the terms of the PPA as currently proposed. However, the PUC left open the possibility that somehow a mutually acceptable PPA might yet be negotiated. They did not establish any particular time for the end of negotiations.
Time is a serious concern for Excelsior, particularly the deadline of October 1, 2007, for applying for $130 million in federal tax credits. Its chances of being awarded these credits will be lower if it doesn't have an approved PPA. Without the credits, the cost of its power will increase significantly, making the Project even more untenable.
Below is the statement issued by the PUC regarding its action. It is difficult to see how they expect the parties to overcome the obstacles to a mutually agreeable PPA when Xcel doesn't need the power and it is too costly.
Here is the statement published by the PUC:
Commission Acts on Mesaba Plant Petition
At its meeting on August 2, 2007, the Minnesota Public Utilities Commission acted on the petition of Excelsior Energy for approval of a power purchase agreement (PPA) with Xcel involving an integrated gasification combined cycle coal-fired power plant in Northern Minnesota (PUC Docket No., E-6472/M-05-1993). The Commission acted on two threshold issues:
1) Is Excelsior Energy's Mesaba Unit I Project an Innovative Energy Project (IEP) under Minn. Stat. §216B.1694?
2) Should the Commission Approve, Disapprove, Amend, or Modify Excelsior's Proposed Power Purchase Agreement with Xcel Energy?
Regarding the first point, the Commission unanimously adopted a motion by Commissioner Pugh that the proposed project complied with the specific criteria spelled out in statute and, therefore, qualified as an Innovative Energy Project.
Regarding the proposed power purchase agreement, the Commission unanimously adopted a motion by Commissioner Pugh which in essential part included the following:
Find that the PPA is not in the public interest as currently drafted, but request that Excelsior Energy, Xcel, and the Department continue to negotiate toward a final PPA. The Commission went on to identify deficiencies in the proposed PPA it wanted addressed in the negotiations. They include:
- The absence of a fixed price at a reasonable level
- The need for adequate ratepayer protections from operational risks of the proposed technology
- The need for adequate ratepayer protections from financial risks of the proposed technology
- The need for further development of plans to capture and sequester carbon
In addition, the Commission asked the parties to explore how the output of such a facility could be marketed to all Minnesota's utilities and their ratepayers.
A formal written order will be prepared and issued by the Commission in the next few weeks. For more information, call Burl Haar (651.201.2222) or Janet Gonzalez (651.201.2231).
For a printable version of the statement click here.
The Administrative Law Judges have made their recommendation.
The following excerpt has been taken from the official ruling made by the administrative law judges. The entire ruling can be found at: www.oah.state.mn.us.
Based on these Findings of Fact, and for reasons set forth in the following Memorandum, the Administrative Law Judges make the following:
CONCLUSIONS OF LAW 1. The Minnesota Public Utilities Commission and the Administrative Law Judges have jurisdiction over this matter pursuant to Minn. Stat. §§ 216B.08, 216B.1693, 216B.1694, and 14.50, Minn. R. 1400.5100-.8400, and to the extent not superseded by those rules, Minn. R. 7829.0100-.3200.
2. The Commission gave proper notice of the hearing in this matter, has fulfilled all relevant substantive and procedural requirements of law or rule, and has the authority to take the action proposed.
3. The IEP Statute permits the Commission to amend or modify the initial PPA to raise or lower the amount of the Project’s statutory power sale entitlement.
4. The Project does not satisfy the first prong of the definition of an Innovative Energy Project under Minn. Stat. § 216B.1694, subd. 1(1), because the Final PPA does not assure that coal will be used as the primary fuel and because it has not been established that the Project significantly reduces all of the statutorily identified emissions in comparison to traditional technologies.
5. The Project satisfies the second prong of definition of an Innovative Energy Project under Minn. Stat. § 216B.1694, subd. 1(2), because it is capable of offering a long-term supply contract at a hedged, predictable cost.
6. Since the Project fails to meet the requirements of Minn. Stat. § 216B.1694, subd. 1(1), it is not an “Innovative Energy Project” for purposes of Minn. Stat. § 216B.1694.
7. Since the Project is not an Innovative Energy Project, it does not qualify under Minn. Stat. § 216B.1694, subd. 2(a)(4), as a "Clean Energy Technology" as defined in section 216B.1693.
8. The Final PPA is not in the public interest as required by Minn. Stat. § 216B.1694, subd. 2(a)(7).
9. The Final PPA should not be approved, primarily because of its unreasonable cost to Xcel Energy and its ratepayers, the likelihood that its cost will increase, not decrease over time, and because of the other deficiencies identified in the Findings. While Excelsior Energy and its witnesses have claimed that the PPA cost will become more reasonable in the future, particularly in light of the Project’s environmental benefits, there is not sufficient evidence of that value to overcome the very significant cost difference that exists today.
10. The Project and its technology do not meet the definition of a Clean Energy Technology under Minn. Stat. §216B.1693(c) because they do not significantly reduce all the statutorily identified emissions in comparison to traditional technologies.
11. The Project and its technology do not satisfy the requirements of Minn. Stat. § 216B.1693(a) because the Final PPA is not, and is not likely to be, a least cost resource including the costs of ancillary services and other necessary generation and transmission upgrades.
12. It would be contrary to the public interest for the Project to supply at least two percent of Xcel Energy’s retail load starting in 2012.
Based on the foregoing Conclusions, and for reasons set forth in the following Memorandum, the Administrative Law Judges make the following:
RECOMMENDATION
IT IS HEREBY RESPECTFULLY RECOMMENDED that the Public Utilities Commission order:
1. That Excelsior Energy’s Petition asking the Commission to approve, amend, or modify the terms and conditions of the Final PPA under Minn. Stat. § 216B.1694 be DENIED and that the Final PPA be DISAPPROVED.
2. That if the Commission approves the Final PPA, that it first be amended through negotiations among Excelsior Energy, Xcel Energy, and the Department to address the deficiencies identified in this Report, then returned to the Commission for final approval.
3. That Excelsior Energy’s Petition asking the Commission to determine under Minn. Stat. § 216B.1693 that the Project and its IGCC technology is, or is likely to be, a least-cost resource, thus obligating Xcel Energy to use the plant’s generation for at least two percent of the energy supplied to its retail customers, beDENIED.
4. That Excelsior Energy’s Petition asking the Commission to determine that, under the terms of Minn. Stat. § 216B.1693, at least 13 percent of the energy supplied to Xcel Energy’s retail customers should come from the Units I and II of the Mesaba Energy Project by 2013 be considered in Phase 2 of this matter.
Thank you for attending the public hearings!
For more information about the Excelsior Energy Power Purchase Agreement and Case Documents, please visit www.mncoalgasplant.com/ppa.html
Economics of The Mesaba Energy Project
Economic Position Paper download.
Updated 12/17/06
Renewable Energy Fair
CAMP booth at the Renewable Energy Fair!
There will be upcoming newspaper ads. Stay tuned.
Thanks to those of you who are contributing letters to the editor. They have made a difference!
There is a downloadable PDF file of our 10/31/06 Informational Packet.
We encourage you to share it with friends and neighbors and spread the word about CAMP!
CAMP is a group of volunteers committed to bringing information to the citizens of Itasca County and beyond regarding Excelsior Energy 's proposed power plants. Please consider a contribution to CAMP. Operating expenses such as printing, renting meeting space, and advertising add up. We need contributions. All donations will be used to move CAMP forward in its mission. Checks may be made to CAMP and sent to the following address:
CAMP
P.O. Box 583
Grand Rapids, MN 55744
THANK YOU!!