Mesaba MISO Delivery Study –> FAILED
August 24th, 2006
Above: Mesaba plan – October 25, 2005, DOE meeting                                             Way below: More Mesaba articles!
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Here is a MISO study powerpoint from the MAPP NM-SPG meeting last week:
nm-spg-mesabi-update081606-1.ppt
You can also find this study and others at www.mncoalgasplant.com (give us a couple days to get everything posted!)
More humorous stuff. The prior G477 MISO study of the East site interconnection said it couldn’t be interconnected — that if it was, only 90MW of the electricity could be delivered, and therefore, it FAILED.
Now this study, G519 revisited, comes out. There have been I think three versions of G519, and the prior one I’d read was silent as to whether the electricity was deliverable to market, and this powerpoint shows that the West site FAILED too!!! They can’t generate it on the West site and deliver it to Xcel territory. awhhhhhhhh…
They couldn’t connect this thing even if they wanted to… what will it take for them to get the message that the stars are not lining up for this site? For this project?
Here are the editorials from this weekend’s Grand Rapids Herald Review:
Editor:
There is growing community opposition to the proposed coal gasification plant on the Scenic Highway near Taconite. Lately, every time I open the paper, a new letter expresses concern over some aspect of this project. Several of my friends and neighbors are involved with Citizens Against the Mesaba Project, and I have subsequently learned a lot about the Mesaba Energy Project and Excelsior Energy.
Initially, Excelsior Energy made their proposal to the city of Hoyt Lakes soon after LTV shut down. The East Range region was desperate to replace the 1,400 lost jobs, and the 1,000 jobs promised by the Mesaba Project couldn’t have come at a better time for a community suffering from such a blow.
However, before very long, the number of permanent jobs promised by Excelsior Energy decreased to about 600, and Excelsior representative began talking about Mountain Iron as a preferred site. This site was closer to people’s homes, and local citizens expressed strong opposition. It seems that the people of Hoyt Lakes still have no idea why the preferred site moved west, and now it has come even further west with only about 100 permanent jobs expected.
In my opinion the total benefit to Itasca County seems to be minimal and comes at great financial risk to taxpayers. I believe there are also significant environmental and health concerns we should all be aware of.I encourage everyone to learn more about this project at www.camp-site.info. Please attend the Department of Commerce public scoping meeting Tuesday, Aug. 22 at the Taconite Community Center. Your concerns will be taken into consideration as a matter of public record.
Glenn Perry
Bovey
And one from Delores White:
Legislators should have done the research
Editor:
Itâ??s my understanding that it has been a few years since Tom Micheletti first proposed to the Legislature that Excelsior Energy be given the necessary legislation to put a coal gasification plant on the Range. This would indicated to me that the Department of Natural Resources and the Pollution Control Agency would have had time to do a feasibility study in order that our leaders could make an informed decision on this matter. If there were studies done, why doesnâ??t the public have access to those studies? Why does the public have to do its own research to get information and answers? The only information we are getting is from Excelsior Energy and anything they tell us has to be sorted out to get accurate information.
Shame on our legislators if they did not research this proposal before allowing this plant to reach this stage in permitting.
Delores White
Bovey
From the Timberjay – the online version is confusing, large parts are repeated, but here is what I think it’s supposed to look like:
Thursday, August 24, 2006Â Â Â Â Volume 17, Issue 33
By Marshall Helmberger
Should the Iron Range become home to a series of large coal gasification power plants, to produce electrical energy for the Upper Midwest? Are Iron Rangers willing to accept the industrial development, the powerlines, and the associated environmental costs of such projects if it means more jobs? And are other Minnesotans willing to pay more for electricity to make those jobs possible?
Those are just some of the questions at the heart of the debate over Excelsior Energyâ??s proposed Mesaba Energy project, which could be built near Hoyt Lakes or near Taconite, depending on decisions made by the stateâ??s Public Utilities Commission over the next year.
That proposal, which calls for phased construction of two 600 megawatt power plants, will be the subject of a public comment session at the Hoyt Lakes Arena this Thursday, Aug. 23, beginning at 7:00 p.m. The comments are being sought as part of the scoping for an environmental impact statement on the proposal. A similar comment session will be held Wednesday, Aug. 22, at the Taconite Community Center, also at 7 p.m.
Excelsior Energyâ??s proposal to build the nationâ??s largest coal gasification power plant to date, has attracted widespread political support in St. Paul and in the nationâ??s Capitol, and that support has brought a slew of special legislation that gives the company unprecedented rights and guarantees. Supporters say the project fits well with the Bush administrationâ??s goal of developing so-called clean coal technologies, like coal gasification, that have the potential to sharply reduce harmful power plant emissions, such as sulfur dioxide, mercury, and carbon dioxideâ?? believed to be a leading contributor to global climate change. The project, with backing from the White House and Sen. Norm Coleman, has received $800 million in federal loan guarantees that supporters say are critical if the $1.97 billion project is ever to be built.
Closer to home, the state Legislature has exempted the project from requirements that force other utilities to prove thereâ??s a need for the power they plan to produce, and even passed a law that requires the stateâ??s largest electrical utility, Xcel Energy, to buy the power generated by the plant. The Legislature also granted Excelsior eminent domain authority that will allow the private company to push large new powerlines across private property, with or without approval from landowners.
State Sen. Tom Bakk, a strong supporter of the project, said the legislative incentives were needed to ensure that the plants were located on the Iron Range. Bakk said he believes new base generating capacity will be needed in the Upper Midwest over the next 20 years, and he sees Mesaba Energyâ??s plans as one way to meet that need, while bringing jobs to the Iron Range at the same time.
Bakk said he sees the project as an opportunity for diversification of the Iron Range economy, which has tended to rise and fall with the health of the iron mining industry. And while power plant proposals typically generate significant public opposition, Bakk doesnâ??t think that will happen here. â??Itâ??s an area thatâ??s comfortable with smokestacks,â? he said.
Opposition is growing
But some are more comfortable with smokestacks than others, and a growing number of critics say the project is a poor fit on the Iron Range and is an unwelcome detour on the stateâ??s path towards a more decentralized energy system that focuses on smaller scale projects and more renewable energy sources.
Thatâ??s one of Jim Bernsteinâ??s primary complaints. Bernstein, who served as Commerce Commissioner in the Ventura administration, helped draft the stateâ??s current energy roadmap. He says the Mesaba Project represents a wrong turn for a long list of reasons, and thatâ??s why Bernstein recommended against the project when Excelsior Energy co-founders Tom Micheletti and Julie Jorgenson first brought the idea to him in 2002.
Among Bernsteinâ??s objections was the fact that the energy wasnâ??t needed on the Iron Range, which meant any power produced there would have to be transported to the Twin Cities through construction of a major new powerline through the stateâ??s recreational heartland. Such power lines not only lose power along the way, they are incredibly expensive and generate huge amounts of public opposition. Bernstein said all those factors weighed heavily against siting the project on the Iron Range. â??If Minnesota Power had come to me and said they needed the power on the Range, it would have been a totally different story,â? he said.
The high cost of powerline construction will ultimately be paid by Xcelâ??s customers, notes Bernstein, and that is likely to come in the form of a substantial rate increase for the majority of the stateâ??s residents.
Bernstein said decisions on where and when to site new power generation should be made based on objective criteria, such as need, cost, and environmental factors, rather than a political desire to create jobs. â??When Tom Micheletti first approached me, he sold it as job creation for the Iron Range. It was all about jobs,â? he said. Bernstein said he thinks the jobs potential has been oversold. â??They started out talking about more than 1,000 permanent jobs, but thatâ??s been steadily scaled down,â? Bernstein said.
In filings with the stateâ??s Public Utilities Commission, the company is now projecting 107 permanent jobs in the projectâ??s first phase.
Sen. Bakk said heâ??s not surprised by the latest jobs number, given the highly automated nature of modern plants. â??Thatâ??s the number I kind of expected. I toured a similar coal gasification plant in Terra Haute [Indiana], and there werenâ??t many people there.â? But Bakk said construction jobs would be another benefit of the project as well as potential spin-off jobs for vendors serving the plant.
Environmental pluses and minuses
To Ed Anderson, a Grand Rapids physician and a member of Citizens Against the Mesaba Project (CAMP), the trade off of jobs for environmental damage is a poor one for residents of the area. Anderson is also a member of a citizens advisory task force that was recently appointed by the Department of Commerce to provide input on the Mesaba Project.
â??When you look at all the issues, and see the costs involved versus the jobs theyâ??re now talking about, we just feel itâ??s not in balance,â? he said. While Anderson acknowledges that the air emissions of the plant would be less than with a conventional coal-fired plant, he notes it would still entail about 5,000 tons per year of pollutants, ranging from particulates to sulfur dioxide. Anderson said little is known at this point about the public health impacts of those emissions. â??The reality is that there are going to be emissions, and increased illness here,â? Anderson said.
Sen. Bakk believes the environmental pluses of the project outweigh the negatives. â??Environmentally, this is a very good project,â? said Sen. Bakk. â??The emissions are significantly less than with a conventional coal plant. Some numbers Iâ??ve seen show a 90 percent reduction. Thatâ??s why the federal government has put money towards it, to try a new technology.â? Besides lowering emissions, coal gasification allows for the capture of carbon dioxide emissions, which is seen as a major step forward in efforts to control global climate change.
Ross Hammond, P.E., the former manager of NSPâ??s Riverside power plant in St. Paul, agrees that coal gasification has real potential. Hammond now works for Fresh Energy, a Minnesota-based organization that promotes energy efficiency and renewables.
â??I like the technology,â? said Hammond, â??but it has to be built in the right place in the right way.â? The right place, according to Hammond, is near geologic formations that allow carbon dioxide captured in the gasification process to be pumped underground, where it wonâ??t contribute to climate change. â??Northeastern Minnesota is one of the worst places to do that,â? he said, because the hard bedrock in the region wonâ??t absorb the carbon dioxide. That means carbon dioxide produced by a plant on the Iron Range will most likely be emitted to the atmosphere, said Hammond, negating one of the key advantages of the new technology.
Sen. Bakk agreed that the sequestering the carbon dioxide is an important goal, but he said he is unaware of whether or not that might be possible for a plant located on the Range.
State Sen. Tom Bakk, a strong supporter of the project, said the legislative incentives were needed to ensure that the plants were located on the Iron Range. Bakk said he believes new base generating capacity will be needed in the Upper Midwest over the next 20 years, and he sees Mesaba Energyâ??s plans as one way to meet that need, while bringing jobs to the Iron Range at the same time.
Bakk said he sees the project as an opportunity for diversification of the Iron Range economy, which has tended to rise and fall with the health of the iron mining industry. And while power plant proposals typically generate significant public opposition, Bakk doesnâ??t think that will happen here. â??Itâ??s an area thatâ??s comfortable with smokestacks,â? he said.
Opposition is growing
But some are more comfortable with smokestacks than others, and a growing number of critics say the project is a poor fit on the Iron Range and is an unwelcome detour on the stateâ??s path towards a more decentralized energy system that focuses on smaller scale projects and more renewable energy sources.
Thatâ??s one of Jim Bernsteinâ??s primary complaints. Bernstein, who served as Commerce Commissioner in the Ventura administration, helped draft the stateâ??s current energy roadmap. He says the Mesaba Project represents a wrong turn for a long list of reasons, and thatâ??s why Bernstein recommended against the project when Excelsior Energy co-founders Tom Micheletti and Julie Jorgenson first brought the idea to him in 2002.
Among Bernsteinâ??s objections was the fact that the energy wasnâ??t needed on the Iron Range, which meant any power produced there would have to be transported to the Twin Cities through construction of a major new powerline through the stateâ??s recreational heartland. Such power lines not only lose power along the way, they are incredibly expensive and generate huge amounts of public opposition. Bernstein said all those factors weighed heavily against siting the project on the Iron Range. â??If Minnesota Power had come to me and said they needed the power on the Range, it would have been a totally different story,â? he said.
The high cost of powerline construction will ultimately be paid by Xcelâ??s customers, notes Bernstein, and that is likely to come in the form of a substantial rate increase for the majority of the stateâ??s residents.
Bernstein said decisions on where and when to site new power generation should be made based on objective criteria, such as need, cost, and environmental factors, rather than a political desire to create jobs. â??When Tom Micheletti first approached me, he sold it as job creation for the Iron Range. It was all about jobs,â? he said. Bernstein said he thinks the jobs potential has been oversold. â??They started out talking about more than 1,000 permanent jobs, but thatâ??s been steadily scaled down,â? Bernstein said.
In filings with the stateâ??s Public Utilities Commission, the company is now projecting 107 permanent jobs in the projectâ??s first phase.
Sen. Bakk said heâ??s not surprised by the latest jobs number, given the highly automated nature of modern plants. â??Thatâ??s the number I kind of expected. I toured a similar coal gasification plant in Terra Haute [Indiana], and there werenâ??t many people there.â? But Bakk said construction jobs would be another benefit of the project as well as potential spin-off jobs for vendors serving the plant.
Whatâ??s next?
While the political stars may have aligned for the Mesaba Project, it now faces what could be a far more difficult process as it seeks to negotiate a power purchase agreement with Xcel Energy and wade through the lengthy siting and permitting process established by the Public Utilities Commission. Excelsior filed its formal application with the PUC on July 6, which starts the clock ticking on a one-year deadline for final action by the state agency.
The power purchase agreement is likely to be the most critical step in the process. All sides agree that without that agreement, the plant has no future. While the Legislature passed a law entitling Mesaba to a power purchase agreement, the legal wrangling over the meaning of that legislation continues. â??Itâ??s certainly a bone of contention,â? said Janet Gonzalez, an attorney with the PUC. The controversy was only exacerbated by Excelsiorâ??s decision to seek approval for two 600 megawatt plants, while the legislation only authorizes a purchase agreement for 450 megawatts. According to Gonzalez, the PUC could order Xcel to buy the extra power from Mesaba, but only if it determines that the electricity generated there represents the least costly optionâ?? a test few believe Mesaba will meet.
Currently, the purchase agreement is the subject of a contested case hearing before an administrative law judge. Both sides should have an initial round of testimony into the judge by Sept. 5, but final PUC action on the matter isnâ??t likely to be completed until March, 2007. The PUC has the authority to accept, reject, or modify any agreement reached by the two sides.
And if the proposal does move forward, the PUC will decide where the plant will be built. While Excelsior has indicated it prefers the Taconite location, the PUCâ??s Bob Cupit says that his agency currently considers both sites to be viableâ?? and that the final decision will likely come down to overall cost. â??We assume that either site could be designated at the end of the process,â? he said.
Here’s Marshall Helmberger’s very thoughtgful Editorial about the Mesaba Project:
Marshall Helmberger – Photo from MPR site
Whatâ??s the value of 100-200 permanent jobs on the Iron Range? Some would no doubt call them priceless, and advocate anything that offered good paying employment in the region.But we all know that everything good comes with a cost and smart consumers know to look before they leap. We wouldnâ??t buy a new car without knowing the price tag and we sure as heck shouldnâ??t buy a power plant without understanding the full implications of our decision.
Unfortunately, that appears to be what the Legislature, Gov. Tim Pawlenty, and Sen. Norm Coleman have done with Excelsior Energyâ??s proposal to develop a series of large coal gasification power plants on the Iron Range. While even critics agree that coal gasification has tremendous promise as a way to burn coal with far fewer emissions than conventional power plants, those stack emissions are just one piece of a complex and incredibly expensive project that will have implications not just for employment on the Iron Range, but for Minnesotaâ??s energy future.
If judged by the standards set for all other power plants in Minnesota, Excelsiorâ??s $2 billion-plus Mesaba Energy Project would have never advanced past the drawing board. But politics has overruled questions that would have normally derailed this project early on. Excelsior co-founders Tom Micheletti and Julie Jorgenson understood the allure of economic development on the Iron Range and used what now appear to be inflated promises of as many as 1,000 permanent jobs to build a case for their project, based on political appeal rather than sound economic and environmental considerations.
The stateâ??s other utilities have said they donâ??t need or want the power Excelsior proposes to generate, so the state Legislature passed a law requiring Xcel Energy to buy it whether they need it or not. When critics pointed out that the private sector would never invest in such a high-risk project (the first of its kind in the nation) located hundreds of miles from those who are supposed to use the power, Sen. Norm Coleman brought $800 million in federal loan guarantees to the table. While such political intervention has increased the odds that the plant will be built, it wonâ??t make the plant a better fit with Minnesotaâ??s current energy roadmapâ??which emphasizes decentralized power generation and renewablesâ?? nor will it make the power it generates any more affordable for customers.
We may eventually learn that this proposal is financially viable, but at this point we donâ??t know how much it will cost to produce the power, or to transmit it hundreds of miles to the users of that energy. We do know it is almost certain to cost more than Xcel Energy currently pays for power, which means that jobs on the Iron Range will come with a potentially hefty price tag for customers of the stateâ??s largest utility. Until we know how big that price tag will be, it is irresponsible for the Legislature to force Xcel Energy to buy power from Mesaba.
Creating those jobs on the Range will also come at a huge personal cost for the hundreds of landowners in central and northeastern Minnesota, who will lose homes and recreational property to make way for the massive new powerline this project will entail. We all know from the stateâ??s earlier powerline battles, how contentious and divisive the use of eminent domain can be. If the energy being transmitted along a new power line were desperately needed in the Twin Cities, that would be one thing. But this isnâ??t about need, itâ??s about politics, and those 100-200 permanent jobs on the Iron Range.
Those jobs will carry a toll as well for those who want Minnesota to tap more of its wind energy potential. A preliminary study of the projectâ??s impact to the stateâ??s power distribution system has already indicated that it could require the state to reduce its commitment to wind energy, to prevent imbalances in the grid. That would cost jobs in parts of western Minnesota and limit the financial windfall that wind power has offered to many struggling farmers in that region.
And while coal gasification can reduce the emissions normally associated with coal-fired power plants, it canâ??t meet the environmental benefits of our best energy source, which is conservation. Investing $2 billion in energy efficiency technologies would produce far more employment in Minnesota and leave the state further down the path towards energy independence. Thereâ??s no coal mined in Minnesota, so every pound of coal burned in a Minnesota power plant represents more dependency and more dollars shipped from the state. Every watt we can produce in homegrown alternatives or save through more efficient lighting and industrial operations is like money in the bank.
Thereâ??s no doubt that good jobs are needed on the Iron Range, but at what point do we say the price is too high? The potential for higher rates and lost jobs in other parts of the state puts the onus on Excelsior Energy to prove this makes sense. Until we have the answers to these and many other questions, the jury should remain out on the wisdom of the Mesaba Energy project.
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