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