Legalectric

Excelsior Energy’s Mesaba Project, coal gasification for the Iron Range, had yet another bad day at the PUC. PHEW!!! GOOD!

It’s not done yet, EEEEEUW, BAD, but it’s one slow step closer. Excelsior lost big — all its motions were tossed out. But the life support was extended until May 1, 2008. Issues:

1. Make finding that it’s an Innovative Energy Project a “Final Decision.” Separate this out from all the other issues in this mess and let it be FInal. PUC said no.
2. Let Excelsior Energy enter more Exceptions. MORE! Haven’t we heard enough on this, and over and over and over and over… and the PUC said ENOUGH, no, no more!
3. Require that an Independent Consultant be hired a la Big Stone II, another docket where the PUC hasn’t the balls to say yes to the ALJ Recommendation and say no to the project. PUC said we don’t need an expert, we’ve got enough information.
4. They gave Excelsior Energy and Xcel another 9 months to fart around, with reports due every 90 days, and if they don’t come up with a PPA by then or both come to PUC asking for an extension, it will be considered closed.  Yes, it’s good to have some likely finality, but that’s a long way out, a lot can happen in nine months!

I think it was Commissioner Wergin’s first meeting, for sure it was one of the first, and she made a good debut. She challenged Tom Osteraas’ characterization of legislative intent — GOOD — it helps that somebody was there who remembers. She also spoke up about all that they’d submitted, stating that she’d been reading through the piles of crap submitted (well, she didn’t put it quite that way) and had the issue of entering additional Exceptions, and she felt they had plenty of opportunities and didn’t need another round.

From Aaron Brown:

Excelsior dealt serious blow at PUC

Here’s the article from Hibbing Daily News (thanks to a little birdie for this!):

MPUC rules against Excelsior

But Micheletti sees silver lining

by Mike Jennings, Editor

Published: Friday, August 15, 2008 6:12 AM CDT

ST. PAUL — Excelsior Energy suffered a major setback Thursday in its bid to build a coal gasification power plant on the Iron Range, but the company’s founder says he still has reason to hope for long-term success.

The Minnesota Public Utilities Commission endorsed an administrative law judge’s findings that Excelsior did not qualify to be guaranteed a buyer for massive amounts of power. In a September 2007 report, the administrative law judge found that Excelsior fell short of the required standard — that it employ a “clean energy technology” that also promises low overall costs.

The commission’s ruling on Thursday ends, at least for the time being, the prospect that Xcel Energy, the state’s largest utility, could be forced to buy up to 13 percent of the power it distributes to its retail customers from Excelsior. The Legislature created a framework in which that could happen, but only if Excelsior met stringent standards of cleanliness and cost. The commission put off another key decision point by settting next May 1 as the end date for negotiations between Excelsior and Xcel on a possible power purchase agreement. The commission ruled last August that Excelsior’s proposed terms for selling the 603-megawatt output of its initial generating unit to Xcel would be counter to the public interest, but it allowed the two companies to continue discussions aimed at a purchase agreement.

Burl Haar, the commission’s executive secretary, said Thursday that he didn’t think the commission was likely to grant any extension of negotiations beyond next May 1.

“My sense is that this is meant to be a deadline, and that if nothing is brought forward by that time I don’t know that the commission would be inclined to consider further proposals,” he said.

The commission also voted Thursday against three motions by Excelsior, clearing the way for the key votes on the cleanliness and cost question and the deadline for negotiations. The five commissioners voted unanimously on all questions related to Excelsior, according to Tom Micheletti, Excelsior’s founder and co-chief executive officer.

Micheletti said Thursday that he found reason for hope in the deadline extension and in comments that some commissioners made during the meeting. By next May, Micheletti said, Excelsior might be able to prove its power would be cheaper than Big Stone 2, a traditional coal-fired power plant proposed for construction near Milbank, S.D., that would supply power to the Minnesota grid.

Micheletti said commissioners seemed interested to hear that Excelsior was discussing possible power sales with utilities other than Xcel. Some commissioners had been concerned that Xcel might be forced to accept Excelsior’s entire output, he said.

The commission “clearly does not want us to go away,” Micheletti said.

He accused Minnesota Power Co. of working “arm in arm and hand in hand” with Xcel to kill Excelsior’s proposed Mesaba Energy Project, which is estimated to cost over $2 billion.

“We have bent over backwards to try to be cooperative with Minnesota Power,” even offering the utility part-ownership in the Mesaba project, Micheletti said. “But they have a different agenda.”

Excelsior’s plans for the project include the construction of two power-generating units, either near Taconite, the company’s preferred site, or near Hoyt Lakes.

The Mesaba project would employ integrated gasification combined cycle technology, a process in which coal is converted to a gas high in hydrogen through a process called gasification. The gas is then used as a primary fuel for a gas turbine.

Excelsior claims its process would reduce carbon emissions by 60 percent, compared to the next-best coal technology, and would cut mercury emissions by 90 percent.

Micheletti also says the Mesaba plant would also be well suited for the capture of more carbon, which could be shipped by pipeline to a site where it could be injected deep underground. The company has not yet offered a detailed plan for carbon sequestration, however.

Mike Jennings can be reached at mike.jennings@mx3.com. To read this story and comment on it online go to www.hibbingmn.com.

Micheletti’s right about one thing, that the Commission “clearly does not want us to go away.” They just won’t pull the plug, drive in the silver stake, they just don’t have the balls to do it. WHY? I think there’s an interesting story there.

Meanwhile, the Office of the Legislative Auditor about the IRR’s Mesaba Project expenditures should be out soon. Now this should be good — going through Excelsior Energy’s Mesaba Project documentation to the IRR and finding the $1,200 in golf balls, a trip to a candidate fundraiser, big buck hotel in Washington and “movies,” and a trip to Italy was choice, and this will probably go a lot further than those juicy discoveries!

Another coal plant bites the dust — #68 so far per Bruce Nilles, Sierra Club. Another good news aspect is that it’s a Gates investment, or shall I say “Cascade Investments, LLC” which is the Gates’ investment arm, the same Cascade Investments, LLC that has invested in Big Stone! So, is Big Stone next? The scenario is similar, “doubling the plant size” and the heat is on…

PNM Resources drops Texas coal-plant expansion
Tue Aug 12, 2008 12:44pm EDT

HOUSTON, Aug 12 (Reuters) – PNM Resources’ Energy Co venture with Cascade Investments LLC has dropped a plan to double the size of a Texas coal plant, the company said on Tuesday.

Albuquerque, New Mexico-based PNM (PNM.N: Quote, Profile, Research, Stock Buzz) said in a release it would not pursue a 305-megawatt expansion at its Twin Oak coal-fired plant in Robertson County, about 130 miles (210 km) northwest of Houston. The existing Twin Oaks plant has two units, totaling 300 MW.

The company did not give a reason in the statement.

Last year, PNM signed a non-binding letter of intent to contribute the existing coal units to Energy Co, an unregulated energy joint venture with Bill Gates’ Cascade Investments unit.

PNM also said it will sell its Texas electric retail business unit, First Choice Power, and reduce its dividend payment as it works to restore the financial health of its regulated utility business in New Mexico, according to the release.

(Reporting by Eileen O’Grady; Editing by Marguerita Choy)

Yup, too much time on my hands… but Kenya’s in early stage renal failure and it’s time she made her mark in cyberspace:

Kenya in Doggiespace

Blogs for Dogs… Yup, this is what the internet is all about, how did we ever get by without it?

Supposedly the St. Paul Port Authority has recommended biogas as fuel for Rock-Tenn.  Now just what does “biogas” mean?  And produced in “rural Minnesota” and sent via pipeline?  What pipeline, through whose yards? And a twist – Rock-Tenn must commit for 10 years?  GOOD, that’s a first… and a necessary requirement to commit to stay if their steam needs are government subsidized.  Would 10 years be enough to justify that level of public spend?  Can the public get an equity interest for its investment?

Garbage?

Hone asked for an assurance that refuse-derived fuel is definitively “off the table.” She didn’t get it, as both Klein and Carpenter said they could not make that statement.

From the Daily Planet:

Rock-Tenn fuel plans: Win/win at last?

Here’s the article from STrib:

Biogas is endorsed as best fuel for recycler

So biogas “endorsed” but garbage not off table.  What does the “endorsement” mean?

The new Draft Air Permit is out for the Laurentian “biomass” burner in Hibbing, and Comments are open until August 18, 2008.  This is the “clean energy” plant that was violating its air permit and was fined.  Now we’ve got the new one… what’s different?

Notice of Draft Air Permit

Draft Air Permit

Draft Air Permit – Technical Support Document

Comments should be sent, BY AUGUST 18, to:

Toni Volkmeier, Air Quality Permits Section
Industrial Division, Minnesota Pollution Control Agency
520 Lafayette Road North, St. Paul, Minnesota 55155
651-296-8717 – Fax

email: toni.volkmeier@pca.state.mn.us

I noticed in the permit’s Technical Support Document that although the federal rules have been vacated, they are issuing it “as if” noting that the federal rules were incorporated into the Minnesota Rules.  But as Alan notes, if the rules were vacated because they were ineffective, insufficient to protect the environment, what good is that? Here’s direct from the Technical Document:

2. Regulatory and/or Statutory Basis

New Source Review
The facility is an existing major source under New Source Review regulations. No changes are authorized by this permit.

Part 70 Permit Program
The facility is a major source under the Part 70 permit program.

New Source Performance Standards (NSPS)
The existing wood boiler (EU007) is subject to New Source Performance Standards Subpart Db. The applicability is not affected by the changes made through this permit action.

National Emission Standards for Hazardous Air Pollutants (NESHAP)
The wood boiler (EU007) is permitted as subject to NESHAPs Subpart DDDDD, which has been vacated.  All operating conditions remain the same; however, when the CEMS requirements were consolidated into a single group (GP003), any citations that were previously Subpart DDDDD requirements were changed to Minnesota Rules requirements.

Compliance Assurance Monitoring (CAM)
Since there are no actual changes to emission units, CAM is not an issue at this time.

Minnesota State Rules
Portions of the facility are subject to the following Minnesota Standards of Performance:
• Minn. R. 7011.0510 Standards of Performance for Existing Indirect Heating Equipment
• Minn. R. 7011.0715 Standards of Performance for Post-1969 Industrial Process Equipment
• Minn. R. 7011.2300 Standards of Performance for Stationary Internal Combustion Engines
No changes to applicable requirements result from the changes made through this permit amendment.

So here’s my question… if the MPCA is issuing permits under federal rule, and if they’re doing their Part 70 Permits under federal delegation, and where the rule has been vacated because it didn’t cut it, on what basis, under what authority, are they issuing permits?  This seems to be an area where they’re wide open to challenge!  I would think that any permit issued under the Minnesota adoption of those rules that were deemed inadequate could be thrown out rather easily…