The Mesaba Project non-decision on the IGCC coal gasification boondoggle of the century came down at the PUC week before last — has it been that long? (I guess it’s fair to say that it made me sick, for the last week, I’ve been taking massive amounts of drugs for ear infections, unable to hear, and living with the feeling of ice picks and red-hot needles sticking in my ears… sometimes it’s hard to be a dog… but being waited on and cared for sure helps!) I’ve been at a loss to explain it, and looking at the 20 pages of notes just made it even more frustrating. As luck would have it, the PUC did it for me, issuing a memorandum on the decision, and here’s what it says:

Commission Acts on Mesaba Plant Petition
At its meeting on August 2, 2007, the Minnesota Public Utilities Commission acted on
the petition of Excelsior Energy for approval of a power purchase agreement (PPA) with Xcel involving an integrated gasification combined cycle coal-fired power plant in
Northern Minnesota (PUC Docket No., E-6472/M-05-1993). The Commission acted on
two threshold issues:

Is Excelsior Energy’s Mesaba Unit 1 Project an Innovative Energy Project
(IEP) under Minn. Stat. §216B.1694?

Should the Commission Approve, Disapprove, Amend, or Modify Excelsior’s
Proposed Purchase Power Agreement with Xcel Energy?

Regarding the first point, the Commission unanimously adopted a motion by
Commissioner Pugh that the proposed project complied with the specific criteria spelled out in statute and, therefore, qualified as an Innovative Energy Project.

Regarding the proposed power purchase agreement, the Commission unanimously adopted a motion by Commissioner Pugh which in essential part included the following:

Find that the PPA is not in the public interest as currently drafted, but request that Excelsior, Xcel, and the Department continue to negotiate toward a final PPA.

The Commission went on to identify deficiencies in the proposed PPA it wanted
addressed in the negotiations. They include:

  • The absence of a fixed price at a reasonable level
  • The need for adequate ratepayer protections from operational risks of the proposed technology
  • The need for adequate ratepayer protections from financial risks of the proposed technology
  • The need for further development of plans to capture and sequester carbon

In addition, the Commission asked the parties to explore how the output of such a
facility could be marketed to all Minnesota’s utilities and their ratepayers.

A formal written order will be prepared and issued by the Commission in the next few
weeks. For more information, call Burl Haar (651.201.2222) or Janet Gonzalez

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