Legalectric

Lots of good stuff in the paper — sorry it took so long to get this posted. First is a great one last week from Charlotte Neigh, Co-Chair of CAMP:

Better ways to spend IRR’s $9.5 million than Mesaba Project

Herald Review
Last updated: Friday, August 10th, 2007 04:32:08 PM

Editor:

The Minnesota Public Utilities Commission has found Mesaba Project’s proposed contract with Xcel Energy “not in the public interest” because its power would cost too much and the risk too great for Xcel’s customers. After six years of development, this is the status of the project that has already received $5.52 million from the state’s Renewable Development Fund, $9.5 million from Iron Range Resources, and up to $22 million in federal money.

IRR funds come from production taxes on taconite mining companies in lieu of property taxes, for the benefit of Iron Range school districts and local governments, and to diversify the economy. Budgets and projects are approved by a 13-member board, including 10 state senators and representatives. IRR commissioner and staff manage day-to-day administration.

In December 2001 the board approved a $1.5 million loan for Excelsior Energy; in June 2004 the board approved an additional $8 million. This $9.5 million was for a 531 MW power plant to be built near Hoyt Lakes. Construction was to begin in 2007. Full production was scheduled for 2010. How carefully did IRR evaluate this project before making this unsecured loan?

Now the project is a 603 MW power plant near the Scenic Highway in Itasca County that has failed to get the indispensable captive customer. Excelsior’s first interest payment was due in May 2007 but it wants an extension. If this project fails, will IRR be able to recover any of the $9.5 million that Excelsior has already spent?

Excelsior’s penchant for secrecy makes information about its expenditures sketchy. IRR money may not be used for lobbying expenses but Excelsior has had more than 15 lobbyists registered in Minnesota over recent years. With what funds were they paid? Has IRR verified that Excelsior’s large payments to consulting firms did not include lobbying services? How much of their own money have Excelsior’s owners put at risk for this project?

Available documents prompt questions about how diligently IRR has monitored the reasonableness and appropriateness of some expenditures: $5,500/month for an office in Minnetonka; $23,600 for office furniture from IKEA; $8,230 for a base cabinet and sink for the office; $198.70 for lunch at the Oceanair Restaurant in the Minneapolis Hyatt; $223.65 for a V.P. to go golfing; and $1,224.49 for Tom Micheletti’s room for three nights at the Marriott Hotel in Washington, D.C. How does such extravagance benefit the Taconite Relief Area?

IRR also undertakes mineland reclamation initiatives. Why has it not provided the funds needed to prevent the Canisteo from flooding the city of Bovey? Why has it not provided the funds needed by the city of Keewatin to pay to clean up the old oil leak that is threatening its aquifer?

Let’s hope that future decisions about how to spend the money that is intended to benefit the people of the Iron Range are more prudent and responsible.

Charlotte Neigh
Co-Chair Citizens Against the Mesaba Project

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Commissioners meeting used as propaganda forum
Herald Review
Last updated: Friday, August 17th, 2007 04:07:11 PM

Editor:

On Aug. 14, Tom Micheletti had five minutes on the Itasca County meeting agenda to give an “update” on the Mesaba Project. Such a report should have more appropriately been presented two hours earlier, but that meeting is not televised on ICTV and so did not provide a forum for Micheletti to put his spin on the recent decision by the Minnesota Public Utilities Commission which found that his proposed power purchase agreement (PPA) with Xcel Energy “is not in the public interest as currently drafted”.

Micheletti tried to extend his allotted five minutes by saying that a lawyer needs more time. Micheletti has not been licensed to practice law in Minnesota since July 2000. Although this deception was inconsequential, his others weren’t.

Micheletti said the MPUC had indicated that it would “force” other utilities in the state to participate in a PPA with the Mesaba Project. He had to back down from this claim when Commissioner Burthwick asked if the other utilities were being ordered or requested to participate. As Micheletti well knows, the MPUC’ s official statement was:

…(T)he Commission asked the parties to explore how the output of such a facility could be marketed to all Minnesota’s utilities and their ratepayers.” This is far from ordering or forcing other utilities to participate in a PPA as Micheletti claimed.

Micheletti also portrayed this as a desire by the MPUC to spread the “benefits” of the project statewide. The MPUC actually said that it was interested in spreading the “risks” statewide because they are too great to be imposed on Xcel’s customers alone.

Micheletti claimed that there is a need for the power that Mesaba would produce, although he tried to keep the MPUC from considering need in its analysis. He asserted that Mesaba would be a low cost alternative, although the MPUC unanimously found that the proposed PPA was too costly.

Micheletti had the audacity to thank the commissioners and the residents of Itasca County for their “fantastic support” of the project, although many of the people in the room are active opponents of the project – a fact that the ICTV audience won’t know because no response was allowed.

Usually the commissioners’ meeting is limited to acting on requests for board action. No action was requested by Micheletti and there was no reason for him to be on this agenda. The county shouldn’t permit its meetings to be used as a propaganda forum for promoters who want to spin their projects.

Colleen Blade
Nashwauk

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Nonsense presented at county board meeting
Herald Review
Last updated: Friday, August 17th, 2007 04:06:28 PM

Editor:

I attended the Itasca County Board of Commissioner’s meeting on Aug. 14 and want to relay all the good news that was reported by Thomas Micheletti, speaking on behalf of the Mesaba Energy Project. I was delighted to hear that the project was still alive and that there were very good prospects that its “environmental benefits” would soon be spread across Itasca County. I now reckon that the smokestacks are designed to spew pure oxygen rather than the noxious gases that I previously thought.

The other bit of good news is that the Public Utility Commission, while denying a power purchasing agreement that would require Xcel customers (that is, us) to purchase Mesaba’s higher-priced electricity, has suggested a compromise that would require a number of other power purchasers to share in paying for the higher-priced electricity. Mr. Micheletti noted that this would allow Mesaba to share its “economic benefits” more widely. I must admit that this latter point confused me a little. Since Itasca County has provided the land, lake, and other subsidies for the power plant, I’m not sure I want to share any benefits more broadly. I think that we should keep the benefits of higher electricity prices right here in Itasca County. In fairness, since our commissioners are responsible for these environmental benefits and higher electricity prices perhaps they should be rewarded by having them all.

The commissioner’s meeting was a scene befitting a chapter from Alice in Wonderland. Environmental costs are now labeled “environmental benefits” and higher utility bills are now labeled “economic benefits.” Do our commissioners really believe such nonsense? Oddly, I didn’t hear any of them laughing.

Burt Abrams
Bovey

The CapX 2020 Certificate of Need application came in the mail Friday.  HOW DARE THEY!  OK, fine:

www.nocapx2020.info 

It’s going to be a long couple of years…

Seems my favorite gas turbine salesman is getting pissy, getting worried. When he wantz to keep the opposition from talking, wants only proponents to be heard, it must be that he sees that yet another IGCC project is vulnerable. Keep your eye on the Sierra Vista Herald for his missive, and note what he says about the toady enviro organizations that are supporting IGCC — which of them have not received “grants” to do so, eh? Let’s see, I’m a whore against IGCC (when not against tanks and bazookas and machine guns per David Gross, Esq.), Harry is a whore for gas turbines (natural or IGCC) and enviros are whores for IGCC. We’re all whores but it seems a bit lopsided. Anyway, here’s what he had to say about the article:

I read your article in the August 14 issue of the Sierra Vista Herald entitled: “2 Supervisors Deny Travel Expenses for Power Plant Expert” and I feel compelled to write to you about it.

My hope is that you would make this letter public as a follow up to your article.

The article was brought to my attention by a web blog written by Ms. Carol Overland, the Minnesota lawyer identified by board member Paul Newman as the purported expert on IGCC tachnolgy.

The blog can be found at: https://legalectric.org/weblog/1821/.

What your article failed to point out (or rather what Mr. Newman failed to point out) is that, in the case of the proposed Minnesota IGCC project, Ms. Overland was not acting as an independent industry expert witness on IGCC technology, but rather as a locally retained lawyer representing a group of property owners that opposed the project for various private reasons – mostly having to do with property interests and not environmental issues.

Regarding the environmental issues related to alternative ways to use coal for power generation, I believe that the technical data will support IGCC technology as the cleanest possible alternative.

Please see attached chart that was developed for the Department of Energy on that subject.

There is no doubt that both sides of the argument related to coal-based power can come up with their own set of “experts” to present arguments pro and con. But the facts regarding the qualifications and the real motives of such experts should be made clear.

This should be the case whether or not the use of public funds is being considered to cover the travel expenses to bring such “experts” to town – or even if they are invited to provide their expert opinions gratis via teleconference.

The motives of so-called “experts” who are paid by opponents to a project always have to be questioned.

The very fact that a number of major nationally recognized environmental organizations have themselves been generally supportive of IGCC technology as the cleanest alternative for coal-based power generation should speak for itself.

if the Board of Supervisors is looking to have a truly qualified and independent technical expert on IGCC technology, I would suggest that they invite technical experts from the major environmental groups.

Yours very truly,

Harry Jaeger
Gasification Editor
Gas Turbine World Magazine

PS I believe that the project in Minnesota that was reportedly killed by Ms. Overland’s expert testimony is still alive, as the Minnesota PUC has recently suggested that the project developer and the local utility work together to find a way to make it work in the public interest.

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Ummmmmm… let’s see… go to the “major environmental groups” that are supporting IGCC with funding to do so from the Joyce Foundation?  Good idea… good source for “truly qualified and independent technical experts.”  Remember this list of recipients please, from a Joyce Foundation press release:

Announced August 2006

Clean Air Task Force, Inc.
Boston, MA $787,500
To promote Integrated Gasification Combined Cycle in the upper Midwest. (21 mos.)

Clean Wisconsin, Inc.
Madison, WI $500,000
For a coordinated administrative intervention and public information campaign aimed at promoting coal gasification with sequestration as an alternative to conventional coal plants proposed for Wisconsin. The Wisconsin Citizens Utility Board would also be a partner in the intervention and campaign. (1 yr.)

Energy Foundation
San Francisco, CA $100,000
To support smaller-scale efforts to contest the licensing of conventional coal plants in the Midwest. (1 yr.)

Great Plains Institute for Sustainable Development
Minneapolis, MN $437,500
To support the efforts of its Coal Gasification Working Group. (21 mos.)

Michigan Environmental Council
Lansing, MI $87,500
To persuade regulators, utilities, and power plant developers in Michigan that any new coal plants should be able to use the latest technologies for capturing and storing carbon emissions. (21 mos.)

National Wildlife Federation
Reston, VA $122,700
To build support in Indiana and Michigan for coal gasification as an alternative to conventional coal-burning power plants. National Wildlife Federation affiliates Indiana Wildlife Federation and Michigan United Conservation Clubs would be partners in this effort. (21 mos.)

Natural Resources Defense Council, Inc.
New York, NY $437,500
For its efforts to oppose the construction of new conventional coal plants and promote alternative plants using coal gasification with carbon sequestration. (21 mos.)

Ohio Environmental Council
Columbus, OH $113,750
To support its ongoing efforts to promote IGCC in Ohio and to oppose the permitting of a conventional coal plant proposed by AMP-Ohio, a municipal utility consortium. (21 mos.)

Resources for the Future, Inc.
Washington, DC $75,000
To conduct a quantitative assessment of the risks to shareholders and electric utility ratepayers of investing in various coal combustion technologies. (1 yr.)

Rockefeller Family Fund
New York, NY $50,000
To support ongoing coal advocacy activities of the Renewable Energy Alignment Mapping Project. (1 yr.)

University of Wisconsin-Madison Center on Wisconsin Strategy
Madison, WI $175,000
To build support among labor leaders in Wisconsin and other Midwest states for coal gasification as an alternative to conventional coal power plants. (21 mos.)

Announced May 2006
Izaak Walton League of America, Inc.
St. Paul, MN $300,000
To support intervention in the licensing hearings for the Big Stone II power plant in South Dakota and Minnesota. (1 yr.)

… sigh… does Harry really think that’s a good idea?  … sigh…

Click here and check out this blog about the Bowie Power Station

It’s very, very hot down there in Arizona right now, and no, it’s not the dog days of summer rampin’ it up…
2 Supervisors deny travel expenses for power plant expert

By Shar Porier
Herald/Review

Published on Tuesday, August 14, 2007

BISBEE — Cochise County Board of Supervisors member Paul Newman will not be able to use taxpayer funds to pay for transportation of an expert he feels would bring insight he needs to make a decision about the proposed Bowie coal-powered electrical plant.

In a specially-called meeting Monday afternoon, Newman asked for legal advice about bringing in a Minnesota lawyer who is an expert on Integrated Gasification Combined Cycle technology to answer questions on the proposed Bowie 600-megawatt power plant.

Newman believed there was a minority issue since he is the only Democrat on the board of supervisors.

“As a minority member of this board, I have the right and the duty to find the best expert in the country to enlighten all the constituents of Cochise County, and, in fact feel it is my fiduciary duty as a member of the minority. I feel I am an individual supervisor with the need to ask questions,” he said to board chairman Richard Searle and Supervisor Pat Call both of whom are Republicans.

Carol Overland, he explained, has been at the center of a heated debate on a similar project in Minnesota. He feels her expertise in the field would provide insight as to what questions the supervisors may want to ask pertaining to the plant’s operations, emissions and by-products.

“She was on the legal team who brought the project to a halt. She knows the kind of questions we need to ask of Southwestern Power Group. I feel I found an essential person to help me ask the pertinent questions,” Newman said.

In a memo given to Searle, Call and county staff he wrote, “The public deserves to hear Ms. Overland’s national perspective in order to understand the importance of this major zoning proposal. The public has a right to know the pros and cons of this proposal. On a personal note, I believe that this zoning decision will be the most important decision of my two terms in office.”

Newman asked Cochise County Attorney Ed Rheinheimer if he could use his discretionary travel funds to pay for her travel expenses from Minnesota to Arizona. Rheinheimer responded, “To me it’s a policy issue for the board whether or not to approve the expenditure of funds. Travel funds are discretionary funds, but they have limitations … She has no formal relationship with the county. She has not been hired or placed on retainer for her opinion. I’m not questioning her expertise or that she could help. But, the board has to approve the expenditure of taxpayer money.”

County Administrator Mike Ortega agreed and added his opinion that the town hall meeting is for Newman’s constituency, so the spending of county funds to appear before one supervisor may not be a viable expense. He added that Newman would have to convince the other two supervisors that another expert opinion is needed.

The county recently contracted with EDAW (Eckbo, Dean and Williams based in San Francisco) to look over the IGCC plant and proposed recovery systems, with funding provided by Southwestern Power Group II.

Newman was hoping to get Overland on a videoconference call, but was told by county clerk Katie Howard the supervisors meeting room did not have that capability. It was only available in the small conference room. Since Overland would not be able to be seen or heard by the public, Newman then asked if he would be permitted to have her talk via long distance on a conference call.

He was told that would be doable. Overland may be able to offer her advice during the upcoming work session tentatively set for later this month or at the future meeting where the fate of Bowie’s coal-powered plant would be decided.

For now, Newman will have to rely on activist Nancy LaPlaca at the town hall meeting.

LaPlaca is involved with a similar IGCC plant proposed in Colorado.

Though Newman asked Searle and Call to attend the town hall meeting, neither will be able to do so because of scheduling conflicts.

The town hall meeting will be held from 5:30 to 8:30 p.m. today in the supervisors’ meeting room on Melody Lane.

Herald/Review reporter Shar Porier can be reached at 515-4692 or by e-mail at shar.porier@bisbeereview.net.

——————————————

And more…

Some urging alternative to proposed power plant

By Shar Porier
Herald/Review

BISBEE — “I looked at the company in length online and I don’t believe their evil; they’re just trying to work with what exists, but it’s too late for that.”

So said Cochise County resident Michael Gregory in regard to Southwestern Power Group II during Tuesday night’s town hall meeting held by county Supervisor Paul Newman on the proposed Bowie power plant. The meeting was aimed at getting questions answered and information to the public.

“We should be leapfrogging into new technologies, like solar,” Gregory added.

He knows about solar. He’s been using solar energy to power his home for 35 years.

Gregory was one of several who spoke out against using coal to create energy, no matter the technological advances of integrated gasification combined cycle that creates a heated synthetic gas from coal to generate electrical power.

David Getts, general manager of Southwestern Power Group II, gave a brief overview of the 600-megawatt electrical generation project, but hit a stumbling block when it came to admitting that carbon sequestering via greenhoused vegetation as has been proposed was an unknown.

“We know we cannot go underground here,” Getts said. “We want to sequester carbon dioxide in tree seedlings or vegetables in state of the art greenhouses. … We are all worried about global warming. We know control of carbon emissions is coming. So we want to develop a strategy of carbon sequestration, but we don’t know what the targets will be or what the hurdles will be. We don’t know how much carbon we will be able to capture and use.”

Getts said he would like to build a solar plant here in Arizona, but utility companies won’t buy electricity generated by the more expensive solar power.

But Nancy LaPlaka, an environmentalist working in her home state of Colorado to fight a proposed integrated gasification combined cycle plant there, said the cost of solar and the cost of integrated gasification combined cycle with the capture additions are pretty much equal, and there is the added benefit of no carbon emissions.

“These things used to be decided by just a few people, but now pollution is a community issue,” she said. “Coal plants are one of the biggest producers of carbon dioxide. They produce 60 percent of all carbon dioxide emissions.”

She pointed out how the addition of scrubbers, the cooling systems and the filters to remove contaminants in the system reduced plant efficiency, and so it has to burn more coal to produce more power. In fact, carbon dioxide capture alone decreases output by 20 percent.

“Clean coal is an oxymoron,” she said.

Elna Otter, who represented the Sierra Club, questioned whether the county actually needed a power plant at all.

“We have enough power for our needs,” noted Otter. “Most of the power produced will go to other places. … We can’t be sure the predictions of Arizona growth will come about.”

She suggested that the power plant be built at the coal mines to save transporting it.

“The Sierra Club will support coal only if it is mined responsibly, burned cleanly and meets environmental responsibilities. … We promote clean energy,” Otter added.

Newman granted most of the time to those who wanted to speak and the experts he brought in. And he said to Getts, “I want to give the people a chance to talk and ask questions, since they did not get the chance at the work session we held with you. All your experts got to speak, but even I did not get to ask all the questions I had.”

He said he wanted to hold a second town hall once the results were in from the San Francisco-based firm Eckbo, Dean and Williams, the consultants hired to advise the Board of Supervisors and the county Planning Department on what conditions to place on the rezoning request.

Since the county consultant’s staff received all the material only recently, the tentatively scheduled work session for next Tuesday was postponed until sometime in September, said Jim Vlahovich, the deputy county administrator. That could put the vote on approval of the rezoning request off until October.

HERALD/REVIEW reporter Shar Porier can be reached at 515-4692.

The Big Stone II decision came out a few minutes ago, and it’s more BS…

Big Stone II – ALJ Recommendation

… sob…

And here’s the really disturbing part, from paragraph, #10 in the Conclusions:

The Applicants failed to give meaningful consideration to the Mesaba Project as a supply option as required by Minn. Stat. § 216B.1694, subd. 2(a)(5). However, that failure may be excused because it is unlikely that energy from the Mesaba Project will be available when Big Stone II comes online. The Commission may wish to condition the Certificate of Need upon the Applicants making the Mesaba Project a supply option for a portion of their additional energy needs.

Minn. Stat. § 216B.1694, subd. 2(a)(5) states, in pertinent part:

(5) shall, prior to the approval by the commission of any arrangement to build or expand a fossil-fuel-fired generation facility, or to enter into an agreement to purchase capacity or energy from such a facility for a term exceeding five years, be considered as a supply option for the generation facility, and the commission shall ensure such consideration and take any action with respect to such supply proposal that it deems to be in the best interest of ratepayers;

Oh??? And just what “fossil-fuel-fired generation facility” might the PUC be approving here? As the opinion carefully notes, it’s transmission, not the generation part of the project that’s at issue here. So WFT???

In the STrib:

Coal-fired plant gets boost from judges

The PUC was advised to issue permits for transmission lines to carry power from the proposed South Dakota plant to Minnesota.

By Mike Meyers, Star Tribune

Last update: August 15, 2007 – 9:19 PM

Plans for a $1.6 billion coal-fired power plant on Minnesota’s boundary with South Dakota cleared a major milestone Wednesday, when two administrative law judges urged state regulators to issue permits for transmission lines to deliver power to customers in Minnesota.The next step comes later this year, when the Minnesota Public Utilities Commission (PUC) decides whether to follow the advice of administrative law judges Steve Mihalchick and Barbara Neilson.

Without the transmission permits, the 630-megawatt power plant, called Big Stone II, wouldn’t be built in Big Stone City, S.D., about 175 miles west of Minneapolis. About 2 million of the 2.3 million electricity customers who would get power from the plant live in Minnesota.

The decision, which was months behind schedule, was hailed as a victory by the developers of Big Stone II, but was called disappointing and perplexing by critics who have tried to scuttle the power plant they call a costly and unnecessary polluter.

“We’re gratified,” said Rick Matteson, spokesman for a partner in the project, MDU Resources Group, based in Bismarck, N.D.

“This is a significant ruling,” he said. “It’s really one of the last hurdles we had to jump to bring this plant into reality to serve customers.”

Environmental groups vowed to fight on, however.

“We are very disappointed,” said Bill Grant, director of the Midwest office of the Izaak Walton League, an environmental advocacy group with offices in St. Paul.

Grant said that he and other environmentalists will appeal to the PUC to ignore the findings. Transmission lines, if approved, would crisscross Minnesota and cost as much as $275 million to build. The power plant, whose start-up costs are footed by developers and paid for over time by customers, is planned to be up and running in 2012.

“We believe the administrative law judges got it wrong,” Grant said.

Mihalchick and Neilson, who advise the PUC concerning regulatory measures, downplayed expected future costs of carbon emissions if the federal government imposes caps on how much carbon dioxide utilities and industries can send into the air.

Big Stone II annually will emit an estimated 5 million tons of carbon dioxide (CO₂), a greenhouse gas linked to global warming.

A government tax on carbon could add $20 a ton to the cost of burning coal at Big Stone II, Grant said.

“In our view, those costs will be significant and enough to make it uneconomic relative to a plant that didn’t emit CO₂ or less CO₂,” he said.

The judges sided with estimates of prospective carbon tax costs closer to those provided by Big Stone II developers, in the range of $6 to $9 a ton, Grant said.

Big Stone II will incorporate technology to reduce CO₂ emissions by 20 percent, say developers of the plant, a consortium of utilities that includes Otter Tail Power, Central Minnesota Power, Great River Energy and the Southern Minnesota Municipal Power Agency. They already operate another coal plant, Big Stone I, in town.

Environmentalists are not convinced.

“I’m perplexed,” said Beth Goodpaster, a lawyer for the Minnesota Center for Environmental Advocacy.

The administrative law judges seemed to align themselves with many of the arguments of critics of the power plant, but then come down on the side of Big Stone II developers, she said.

Goodpaster said she was heartened to read that the judges saw flaws in the estimates of Big Stone II developers who certified that a coal-fired plant was the cheapest way to produce power for customers.

“If Big Stone has not evaluated all their alternatives properly, how do you know they need the plant?” she said. “It just doesn’t make sense.”

A PUC decision concerning the plant is expected before the end of the year.

Mike Meyers • 612-673-1746

Mike Meyers • meyers@startribune.com