Legalectric

Or are they? And who cares? And why is anyone concerned? Apparently the realities of IGCC, the fantasy of coal gasification, the claims with out any factual basis whatsoever, well, it seems things are getting hot, cooling down, it’s all over the map and everyone’s in a snit. What’s … Dog, I need another word for “hilarious” … anyway, it’s funny, it seems NRG is getting pissy about their reputation! They’re worried as being perceived as backing AWAY from IGCC, but from here, in the middle of a coal gasification cost docket, it seems that getting as far away as possible is the best way to preserve credibility — in Minnesota, coal gasification and Excelsior’s Mesaba Project is political leprosy. Remember the Policy Statement of Ed Garvey ???? Backing away from IGCC is a good and credible thing to do!
Here’s the PRESS RELEASE that NRG sent out, copied by Power Engineering.

According to Power Engineering, here’s the TXU email comments that NRG was responding to:

Reality Check: Proposed IGCC Power Plants Face Cancellation, Cost Recovery Opposition and Delay

AEP: Billion-Dollar Plant’s Costs Are Escalating

“The company said earlier this year the plant would probably cost about $1 billion. It promised to provide a more detailed cost estimate by the end of this year. But in a letter hand- delivered on the day after Christmas to its regulator, the state Public Service Commission, the company’s lawyers said it wouldn’t be able to provide the estimate at this time.

“…What we’ve found out is, part of the higher cost is from the construction market — concrete, steel, labor — the regular things you have in construction,” Matheney said. “It’s also the first time a plant of this type has been built to commercial scale.”

…The company has repeatedly said it will only build such plants in states where regulators allow it to recover its costs. That means ratepayers would have to pay increased rates.”

…Morris [AEP Chairman and CEO Mike Morris] said the process of getting the regulatory and legal authority to build the integrated gasification plants “is taking longer than we’d like — at least longer than I’d like. And arguably longer than our customers can really afford and longer than the instate regulators can afford.”

– Charleston Daily Mail, 12/27/06

NRG: Company Shelves Plan For “Clean Coal” Power Plant

“…NRG officials said they decided to drop the coal technology (IGCC) because the company couldn’t build the planned 630-megawatt plant in time to receive state incentives….Environmental groups were already fighting the plant, saying the new coal technology still produces carbon dioxide, which, unless captured, contributes to global warming. The technology to capture the gas is still being developed.”
– Associated Press, 11/28/06

AEP: CEO Says Issues Could Delay Clean Coal Build

“…The company had been hoping to build an integrated gasification combined cycle (IGCC) power plant in Ohio by 2010, “but it’s probably more like 2011 or 2012,” AEP CEO Michael Morris said….The process in Ohio has been slowed because of a lawsuit that alleges that the state public utility commission would overstep its authority by approving cost recovery for the coal plant. Morris said he expects a decision from the state’s Supreme Court early in 2007….”
– Reuters, 11/06/06

The Bottom Line: IGCC is still a developing technology that is not yet available at the scale, efficiencies and availabilities needed to meet Texas’ near-term power needs.

Cost Recovery Is Not an Option in Texas: Electric utilities developing IGCC plants in other states depend on limiting their technology and operational risk with regulatory cost recovery — that’s not an option in Texas.

IGCC Technology Not Guaranteed for Texas Fuels. No IGCC technology suppliers are currently providing guarantees for IGCC plants using the coals available in Texas.

AEP’s billion dollar plant’s costs escalating? Well, DUH! Remember this? Excelsior’s DOE Financial Assistance Agreement

Does that seem like anything to get pissy about? So will someone explain to me how TXU’s “bottom line” assessment is off? AEP is hopefully going back to the drawing board, reassessing their costs for their project, which are likely something like Excelsior’s $2,155,680,783 for 600MW, or $3,593/kW. NOT INCLUDING CARBON CAPTURE OR SEQUESTRATION — another DUH! Obviously a hundred or so coal plants in Texas is not a good idea, and if you want to be appalled, check out their PLANS. But IGCC is not the answer, not here, not there…

The situation here in Minnesota with Excelsior Energy is anything but normal, what with deals for nuclear waste, deals for wind, I think my clients and moi are the only ones not part of a deal on this, and with that backdrop of wheeling and dealing, then we toss on top all the known problems of coal gasification, all the bait and switch of this particular proposal, all the risk shifting and cost shifting, and there’s no way that anyone with a modicum of consciousness could think that Excelsior’s Mesaba Project is a good idea and that it’s even remotely regarded as likely to be least cost. There is no way that anyone who has read even part of the testimony could support it. For example, the Department of Commerce brief is pretty direct – check it out HERE.
For those of you not acquainted with NRG, where Excelsior Energy’s Tom Micheletti and Julie Jorgensen are from, and also everyone else on their team, if you don’t know what NRG’s about, here s a must read docket. CLICK HERE – Go to the PUC’s SEARCH screen and search for docket: 02-1346. Read all about it! NRG is the company that went down and almost took Xcel out, Meyer Shark’s been on Xcel for decades and is the only one really paying attention to this. Slowly, NRG is turning around, but not without casualties.

NRG – this looks like a good time to reassess your lust for IGCC. Take a good look at the Excelsior record to gain some perspective on how you may fare in a regulatory proceeding. IGCC is a house of cards — and it’s not in the public interest. But more on point, it’s not in NRG’s interest. IGCC is not in AEP’s interest. IGCC is not in TXU’s interest. And afterall, your corporate interest — that’s literally your bottom line. IGCC ain’t a happen’ thang…