Mesaba Energy Project

A special Minnesota law passed in 2003 committed Minneapolis-based Xcel Energy to buy 450 megawatts (MW) of power from Excelsior Energy’s proposed Mesaba Energy Project. However, Mesaba has drawn criticism from Xcel itself, as well as from business groups on the basis of its high projected costs.

In April 2007, the Minnesota Public Utilities Commission’s Administrative Law Judges recommended that the plant be denied a Power Purchase Agreement, as it is not a least-cost resource, nor an “innovative energy project” as defined by state law.

In August, the state PUC affirmed this finding, arguing that the Integrated Gasification Combined Cycle (IGCC) plant is not in the public’s best interest; however, it ruled that Excelsior could meet its demands by introducing carbon capture mechanisms. In late Oct. 2007, the Minnesota Department of Commerce posted draft environmental impact statements (EIS) for the plant.

At a Nov. 27 public hearing to discuss the EIS in Taconite, numerous area residents expressed opposition to the plant.

Written comments on the EIS were due by Jan. 11, 2008. The Sierra Club submitted comments detailing the harmful effects of the plant's carbon dioxide and toxic air pollutant emissions. Also in January 2008, the Minnesota Court of Appeals dismissed the Excelsior's appeal of the PUC's findings from August 2007.

In April 2008, Minnesota’s Public Utility Commission issued an order stating that Excelsior Energy needed to find a larger, state-wide market before the Mesaba unit could be considered financially viable for consumers. Excelsior is now awaiting the PUC’s decisions on several other issues that will determine whether or not the utility company will be able to move forward with its proposal.

In August 2007, the MN PUC rejected the power purchase agreement for the Mesaba plant, and ordered Excelsior and Xcel to enter into negotiations to find a mutually beneficial solution. In September 2008, the Public Utilities Commission issued an order that by May 1, 2009, Excelsior and Xcel would no longer be legally bound to continue negotiations and the case would automatically close unless they filed an agreed upon power purchase agreement or a joint request for a time extension.

Project Details
Sponsor: Excelsior Energy Location: Itasca County, Minnesota Capacity: 603 MW Type: IGCC Status: On hold after denial of permit

Citizen Groups

 * Citizens Against the Mesaba Project, info [at] camp-site.org
 * Fresh Energy, info [at] fresh-energy.org
 * Minnesota Center for Environmental Advocacy, mcea [at] mncenter.org
 * Minnesota Sierra Club, north.star.chapter [at] sierraclub.org

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