Citizens Against the Mesaba Project has published a critique of the economic impact “studies” provided in Excelsior’s application and offered by Excelsior as evidence in the Power Purchase Agreement for the Mesaba coal gasification project.

Here’s CAMP’s Economic Analysis:


Here’s the Camp Press Release, published in BusinessNorth:

CAMP issues Economic Position Paper


Citizens Against the Mesaba Project has responded to the claims of economic benefits for Itasca County to be expected from the proposed Mesaba Energy Project.

In its recently released position paper, CAMP points out that the two studies relied on by the Itasca Economic Development Corporation in its support for the Project are not reliable indicators of economic benefit.

The studies, commissioned from the UMD Labovitz School of Business by Excelsior Energy and the IEDC, are not cost-benefit analyses, and their authors caution that they should not be used to determine policies or make decisions.

CAMP points out that the qualifications of the developer are questionable. Mesaba I would be the first project for Excelsior Energy and eight of its nine top executives held positions with NRG Energy, Inc., an energy-producing company that grew aggressively in the 1990s and had to file for Chapter 11 bankruptcy in 2003.

CAMPâ??s primary focus is on the flaws of the UMD studies. These include unverified data from Excelsior Energy used as input, and projections of millions of dollars in â??value added spendingâ? that donâ??t take into account that most of these dollars will flow out of the county and the state.

CAMPâ??s concerns are supported by evidence being introduced in the pending proceeding before the Minnesota Public Utilities Commission (MPUC) related to Excelsiorâ??s attempt to force Xcel Energy to purchase the 603 MW of electrical output from Mesaba I. The Minnesota Department of Commerce has concluded that there are financial and business risks and the proposed plant is not likely to be a least-cost resource, as required by Minnesota law. The Minnesota Chamber of Commerce has concluded that the net economic benefits to the state are likely to be negative. Minnesota Power has raised concerns about: the lack of rail and coal contracts; a gasification technolgy that has not been proven to work on such a large scale or using sub-bituminous coal; making unrealistic environmental promises; and using up already scarce and valuable air shed needed to meet permit requirements for other viable northeastern Minnesota projects that would use existing natural resources.

CAMP has concluded that Itasca County should consider the identified financial and operational

risks, as well as the risk of serious detriment to the clean air and water that attracts visitors and residents.

Without a proper cost-benefit analysis that considers the costs to tourism and recreation, decreased land values, public health and the environment, there is no basis for concluding that this Project would benefit Itasca County.

Contact: Charlotte Neigh (218) 245-1844

Moments later, what should appear on the BusinessNorth site? What a coincidence — methinks we got their attention! But look what they’re saying, given bold emphasis below — 6,00MW needed in the STATE, which is utter crap. The 6,000MW figure comes from the Capx2020 Technical Update , found at their site under “About Us” (every time I try to get there, everything freezes up, go figure). You’ll find the boundaries of that “region” on p. 4, and then take a close look at the map on p. 7 that shows all the new generation, all 16,712MW of it. And then, when you compare the CapX2020 load growth estimates, that’s WAAAAAAY different than those of the 1005 NERC Load and Capability report, which states that MAPP has overestimated its growth and the region’s growth had really risen only 0.6% in the prior year. That’s reflected in the Xcel IRP, which shows that the biggest power load in the state, bigger than all others combined, doesn’t need baseload capacity until 2015 and then it needs only 375MW. Here’s Xcel’s Baseload Need Assessment. In short, the 6,000MW “need” for the REGION is exaggerated and is more than met by planned generation. Here’s the MISO queue of planned generation. Shortage? Yeah, right…

Expert testimony on Mesaba Energy Project demonstrates it is the most cost-effective baseload power solution for Minnesota
Minnetonka – Excelsior Energy announced that it has filed testimony of nationally recognized experts on the subjects at issue in its docket before the Minnesota Public Utilities Commission (MPUC), seeking approval of its proposed power contract with Xcel Energy.

Power would be supplied under the contract from the first unit of the Mesaba Energy Project, an integrated gasification combined-cycle (IGCC or coal gasification) plant under development near Taconite, Minn.

The power contract is presently pending before an administrative law judge who is scheduled to make findings of fact and recommendations to the MPUC in February of 2007. The MPUC is expected to make its decision in the spring of 2007. All material permits and required transmission planning is underway and construction is scheduled to commence on the Mesaba Project in early 2008, with completion scheduled for 2011.

The Mesaba Energy Project will meet a portion of the need for more than 6000 MW of new generating capacity needed in Minnesota by 2020, cited by utilities and the Minnesota Chamber of Commerce as being critical to the Stateâ??s energy security. Nationwide, the North American Electric Reliability Council reports that demand for electricity will increase by 141,000 MW but projected resources will increase by only 57,000 MW in the next decade.

Testimony in the administrative proceeding has been provided by 19 expert witnesses, including Professor Jim Chen from the University of Minnesota Law School, who is a national expert in the field of regulated industries, Andrew Weissman, Senior Managing Director of FTI Consulting Inc. in Washington D.C., Roger Gale, President and CEO of GF Energy LLC in Washington D.C., Edward C. Bodmer of Lisle, Illinois, a senior energy economic analyst with Pace Global Energy Services LLC, Margaret A. Meal, a chartered financial analyst from San Francisco, California, Douglas Cortez from Hensley Energy Consulting LLC in Orange County, California, and Edward N. Steadman, Senior Research Advisor at the Energy and Environmental Research Center at the University of North Dakota.

Julie Jorgensen, co-CEO of Excelsior Energy, said, â??These experts conclude that the Mesaba Energy Project is the best choice for the state to reduce increasing reliance on natural gas as a fuel for power generation, and to meet increasing baseload power demand while minimizing environmental impacts. In addition, the experts confirm that the proposed power purchase agreement will protect Xcelâ??s customers from significant risks that customers would otherwise bear if Xcel builds its own baseload plant.

Finally, the expert analysis demonstrates that the cost of output from the Mesaba Project is comparable to the costs associated with a conventional coal alternative, and provides consumers with a hedge against the costs of complying with tightening emission limits and future limits on greenhouse gas emissions.�

Copies of Excelsiorâ??s testimony may be obtained at

About Excelsior Energy

Excelsior Energy Inc. is an independent energy company focused on the rapid market penetration of coal gasification technology to meet the nationâ??s increasing demand for electric energy with significantly reduced environmental impacts. In 2001, the Mesaba Energy Project was established to bring an integrated gasification combined cycle (IGCC) plant to Minnesotaâ??s Iron Range. The management team includes industry veterans in the electric utility, independent power, environmental and project development areas. The company website is:

CONTACT: Will Harrington, 952-847-2372



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