There’s a piece on MPR too, but I”ve not heard it yet, I wasn’t glued to the radio at 6:20 a.m.!!!


Here’s the STrib article, thanks Mikey! This Garvey “letter” or “Policy Statement” or “Late Filed Testimony” is such a mess of mixed messages, a step, but it’s something that could mean something to everyone, quite the political statement… sigh…

This STrib report is just part of the story, note that Amit found the costs Garvey says should be included in the flat rate are way higher than that, $170-180/MWh, and nevermind that Amit’s estimate of the costs of transmission are WAY low (and the transmission request has been DENIED by MISO) .

MOST IMPORTANT: Garvey talks about COST of carbon capture and sequestration BUT there is no requirement that it be done! So we pay but don’t get any benefit — that’s called a TRADE, it’s not carbon capture and sequestration! This doesn’t pick up that disctinction, and it’s an important one.

Range coal-gasification plant hits obstacle

January 08, 2007 â?? 9:53 PM

By Mike Meyers, Star Tribune

Current plans for a $2 billion coal-gasification plant on the Iron Range are â??not yet in the public interest,â? according to a state commerce official.

Excelsior Energy must first promise to control air pollution more dramatically than it has planned and sharply increase the protections it offers consumers against runaway electricity rates, argues Edward Garvey, deputy commissioner of energy and telecommunications at the Minnesota Department of Commerce.

Garveyâ??s criticisms are contained in a letter he wrote to two administrative law judges who are considering Excelsiorâ??s proposed plant just north of Taconite, Minn.

The judges are expected to make a recommendation to the Public Utilities Commission next month. The plant cannot be built without the PUCâ??s approval.

Excelsior officials hope to start construction early next year and have the plant in service in 2011, with much of its power sold to Xcel Energy for use in Minnesota.

Garveyâ??s proposals could represent major new costs for the project and limit the ability of Excelsiorâ??s developers to recover those expenses from electricity customers. The price tag for the power plant could rise by hundreds of millions of dollars if Excelsior is compelled to keep 90 percent of its carbon dioxide from going up its smokestacks, a company executive estimated.

â??What the letterâ??s trying to offer is a path out of whatâ??s been a contentious litigation,â? Garvey said in an interview Monday. The power-plant proposal has won support and drawn fire from legions of lawyers, accountants, engineers and other experts since it was filed with the state in December 2005.

Julie Jorgensen, Excelsior co-president and chief executive, said she reads Garveyâ??s letter as the latest round of negotiations, with the agencyâ??s suggestions only a â??wish list.â?

â??My immediate reaction is that if all of these things could be had without driving up the cost of the power, we of course want to give it to them,â? Jorgensen said.

Garvey said the sticking points, in the Commerce Departmentâ??s view, center on three issues:

â?¢ Excelsior wants to sell Xcel Energy 603 megawatts of electricity. But state legislation directing Xcel to buy Excelsiorâ??s power limits the requirement to 450 megawatts â?? a limit that should be kept, Garvey wrote.

â?¢ The power purchase agreement between Excelsior and Xcel should include the costs of sequestering 90 percent of the greenhouse gases created by burning coal and the cost of transmission lines. Both are big-ticket expenses. Jorgensen said the price certainly would be in the hundreds of millions of dollars. The cost of diverting CO2 created in burning coal â?? a process that could involve building more than 600 miles of pipelines to ship the gases for underground storage in Canada or North Dakota â?? could run as high as $891 million and reduce the operating efficiency of the plant by as much as 40 percent, Xcel said in one filing before the PUC.

In a nod to those higher costs, Garvey said the commerce agency suggests, over the life of the contract, a price no higher than $110 per megawatt hour â?? or â??twice the cost that the Legislature set for energy from a biomass facility in the 2003 energy legislation.â?

â?¢ The agency also wants more consumer safeguards.

â??There should be terms that protect ratepayers from any performance failures of the Mesaba project,â? Garvey said.

â??The direct power purchase agreement costs payable by ratepayers are excessive and are not balanced by ratepayer benefits,â? he wrote to the judges.

Jorgensen said the Excelsior proposal already includes safeguards for electricity customers that they wonâ??t get from a conventional coal-fired or gas-fired plant built by Xcel or another utility. For instance, Excelsior will not be paid for power it doesnâ??t produce.

â??Every kilowatt hour we donâ??t deliver, we take a ding on the payments,â? she said. â??Utilities arenâ??t penalized for outages.â?

Mike Meyers â?¢ 612-673-1746

©. All rights reserved.

And about that transmission service denial…

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