Legalectric

Time to haul out the big honkin’ gavel again…

I am not making this up — from the “FOURTH PREHEARING ORDER” in the Mesaba Project siting docket:

Unless excused by an Administrative Law Judge, failure of a party to file testimony when due shall result in that party being denied further participation as a party in this matter.

FOURTH PREHEARING ORDER

Ironic given that just last week, there was the backpedalling Chisago ALJ Order that said:

The fact is that our system of due process delights in the contributions that genuinely motivated parties make toward building a record for later decision-making.

Uh-huh… right… except when, as Xcel’s Chris Clark said, “We didn’t have anything to say!” Thankfully, my clients aren’t the only ones who haven’t submitted testimony. We’re in good company – there’s Xcel, Minnesota Power, so far, Excelsior is the only party to submit testimony, and that makes sense because THEY have the burden of proof in this. Intervenors are under no obligation to submit testimony, and if they “didn’t have anything to say” or if they’re cash strapped and will build the record on cross-examination, that’s just ducky.

So, show me the authority for an order like this!!!

hy are we sitting back? The ALJs’ recommendation has come down in the PPA side of things, with the ALJs recommending that Excelsior’s Petition be denied. As we wait for the Public Utilities Commission to take it up, the siting side of this is sitting… languishing… a good thing:

Commerce Siting Docket Site

For PUC Siting docket site, go to www.puc.state.mn.us and then to “eDockets” and then to “Search Documents” and then search for docket “06” and “668.”

Intervenors in a docket may participate to the extent that the choose. They can wage and active and fierce intervention or they can collect the mail as biomass, their choice. They can passively proceed with thumbs up various orifices or flood the other side with frantic information requests. It’s OUR choice. It’s not for the ALJ to limit. So here we go again, off to the races.

And of course I’m remembering the Hearing Examiner gavelling and yelling at Alan when he had the nerve to ask for the authority for ordering that he and the other Intervenors could not speak at a public hearing! I’m remembering the ALJ’s Order that CRVC explain just exactly why their representing themselves was not unauthorized practice of law (Here’s another post on that). And I’m remembering David Ludwig of the PSC essentially saying the same thing to me when I was representing a client before the PSC! How dare they try to quash the public! I expect this from the project proponents, but from state agencies? The arm of the governor???

Unless excused by an Administrative Law Judge, failure of a party to file testimony when due shall result in that party being denied further participation as a party in this matter.

Plus they’ve not added Charlotte, Ed, Ron and Linda, and Ross to the service list… so they didn’t know about this outrageous Order.

OK, fine, whatever, well, at least Xcel and Minnesota Power know about this and I trust they’re shaking their heads in amazement too…

 

In the Sunday STrib (good stuff in the paper lately, they must be working hard to counter the recent axeing of so many class A people):

   “Dead, dead, dead,” said Carol Overland, lawyer for a group of northern Minnesota landowners opposed to the Excelsior project.

“It was on life support before,” she said. “The plug has been pulled and we’re waiting for the inevitable.”

======================================================

Crunch time for coal-gas plant

More arguments are ahead before the Excelsior Energy plant on the Iron Range gets a no or a go from state regulators on the first major power plant proposed in Minnesota in three decades.

By Mike Meyers, Star Tribune

It’s become do or die by July for one of the largest economic projects ever proposed for the Iron Range.

Between now and then, the Minnesota Public Utilities Commission will collect one last round of arguments from proponents and opponents of a $2 billion-plus coal-gasification plant near the city of Taconite. The plant would also be the first large-scale power plant built in the state since the 1970s.

The plan recently received a stinging rejection from two administrative law judges who are key advisers to the PUC on the plan.

“It’s fair to say the commission gives a great deal of weight to an administrative law judge decision? Yes,” PUC spokesman Burl Haar said. “Do they always follow it? No.”

The husband-and-wife team leading Excelsior Energy aren’t planning any revisions to win over the state regulators. No changes in design. No cutting what they would charge for power. No alterations in the way they will deal with greenhouse gases.

“We’re not going to redraw the blueprints,” said Julie Jorgensen, who shares the titles of Excelsior chief executive and president with her husband, Tom Micheletti.

The price Excelsior is asking Xcel Energy to pay for power is the price needed to make the plant viable, Jorgensen said.

“There’s no fudge factor here,” she said.

Opponents of the Excelsior plant, who argue that it’s not needed, is too costly and offers a sketchy plan for disposing of greenhouse gases, see the judges’ decision as fatal to the project.

“Dead, dead, dead,” said Carol Overland, lawyer for a group of northern Minnesota landowners opposed to the Excelsior project.

“It was on life support before,” she said. “The plug has been pulled and we’re waiting for the inevitable.”

Among the judges’ conclusions: The plant is not as new or innovative as promised, its power would cost more than alternative sources of electricity and its plans to keep some plant-generated carbon dioxide out of the atmosphere would cost more than $1 billion.

Jorgensen and Micheletti argue that the judges were mistaken.

Xcel also argues that the power is not needed.

In 2003, however, the state Legislature said Xcel will have to buy the power from the plant if the PUC finds the plant in the public interest.

The coal-gasification technology, which Excelsior described as innovative, transforms pulverized coal into a cleaner-burning gas. But in testimony before the law judges, critics said the Excelsior design was not environment-friendly and would generate as much greenhouse gas as any other coal plant. The law judges agreed.

“The record was closed when an independent group said the Excelsior plan is innovative,” Micheletti said.

He cited a trade group announcement last month by the Electric Power Research Institute certifying the Excelsior plant as the first coal-gasification project in the nation to issue “pre-design” specifications that can be used as a template for other projects.

State law gives regulators leeway on approving power plants, even if they’re not the lowest-cost way to get electricity, if they’re innovative and offer environmental and other benefits.

Jorgensen and Micheletti also will argue to the PUC that regulators should not compare the cost of energy from Excelsior with conventional coal plants — which are less expensive but produce more pollution and which Xcel has vowed not to build in the future.

“We find ourselves shadow boxing,” Jorgensen said of his project being compared with older technology that has no future in Minnesota.

She also said Excelsior is plans to divert 30 percent of the carbon dioxide produced at its plant to pipelines headed for North Dakota and Canada. Oil producers would buy the CO2, a greenhouse gas associated with global warming, to build up pressure in oil fields to help pump out petroleum, she said.

The net cost of the pipeline, after subtracting revenue from CO2 sales, would be far less than $1 billion estimate cited by the judges, Excelsior officials said. They offered no alternative number.

Opponents aren’t impressed by those arguments, however.

Overland said Excelsior has made no clear commitment to building a CO2 pipeline and, even if it did, 70 percent of the greenhouse gases produced by the plant still would escape into the atmosphere. In that event, the plant would be almost as great a contributor to global warming as a coal plant, she said.

Janette Brimmer, legal director for the Minnesota Center for Environmental Advocacy, said Excelsior developers are offering no binding assurances for dealing with greenhouse gases.

“When they flip that switch on, there’s no CO2 being eliminated. It’s just another coal plant,” she said.

Mike Meyers • 612-673-1746 • meyers@startribune.com 

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(Navy spin test facility)
The spin of this Mesaba ALJs recommendation of denial of the PPA is dizzying:

“The reaction (we received) is that we’ve introduced the most obnoxious kind of project you could ever imagine, rather than introducing the cleanest coal plant in the world,” [Micheletti] said.

Ummmm… this is a surprise? It IS the most obnoxious kind of project you could ever imagine!

From the Grand Rapids Herald Review:

Mesaba Energy Project sees major setback

Than Tibbetts

Herald-Review
Monday, April 16th, 2007 08:14:30 AM

The Mesaba Energy Project could be one unfavorable ruling away from ruin.

Two administrative law judges overseeing Excelsior Energy’s case for a 600-megawatt, coal-fired power plant north of Taconite ruled that the Minnesota Public Utilities Commission should not approve the company’s plans.

The commission, which has the final authority in the matter, is expected to hear the case early this summer.

Judges Steven Mihalchick and Bruce Johnson wrote in their decision that the project is not an “innovative energy project,” language crafted in a 2003 law meant to kick-start development of an integrated gasification combined-cycle, or IGCC, power plant in Minnesota.

The project’s proposed $2 billion price tag meant it would need plenty of public money as well a guaranteed buyer for the plant’s electricity. Mihalchick and Johnson also recommended that the commission scrap the proposed power purchase agreement between Excelsior and St. Paul-based Xcel Energy.

The judges’ ruling — which included stating that the project is not likely to be a least-cost resource — took both proponents and opponents of the project by surprise.

Excelsior CEO Tom Micheletti said it seemed like the judges ignored most of Excelsior’s testimony.

“It flies in the face of everything that’s being discussed about the need to do something about global warming,” he said. “Either they totally ignored our evidence or they just didn’t read it.”

Excelsior officials have touted the power plant as an economic windfall for the area which would create more than 100 permanent, high-paying jobs.

Charlotte Neigh, co-chair of Citizens Against the Mesaba Project, said the ruling was vindication for CAMP members and the hard work they put in to defeating the proposed power plant.

“It demonstrates that some of the reasons that motivated CAMP were valid,” she said of the ruling. “They did an excellent job in that report…and I don’t see how the (public utilities) commissioners could vote any differently.”

If the Mesaba Project has any hopes of getting built, the public utilities commission will have to side with Excelsior and grant a power purchase agreement, Micheletti said, or construction cannot begin.

Carol Overland, an attorney for Mesaba project’s opponents, said the judges made a very strong statement.

“I was really struck by the way they started out by directly saying it’s not an innovative energy project,” she said. “That carries so much weight.”

Excelsior has about three weeks to file exceptions to the judges’ ruling.

Overland said the public utilities commission typically follows administrative law judges’ decisions except for politically charged issues or, in many cases, for Xcel Energy. With many area legislators backing the Mesaba Energy Project, the PUC’s hearing could be interesting, she said.

Peter McDermott, president of the Itasca Economic Development Corp., said the ruling is a disappointment, but still saw a window of possibility.

“I think (Excelsior has) seen stumbling blocks before and gotten around them,” he said. “Whether they can get around this, I don’t know.”

Itasca County Board of Commissioners Chairman Catherine McLynn was at a meeting of the Western Mesaba Planning Board Thursday evening when the news was announced of the judges’ ruling. McLynn said there were representatives from both Excelsior Energy and CAMP at the meeting and all were taken aback by the announcement. But McLynn stated that all, including the county, understand that this decision does not stop the project.

McLynn explained that the board remains “on record as passed by resolution” to be in support of the project should it pass the environmental permitting process. She emphasized the fact that the final decision on whether the project moves forward is not a decision of the county. However, McLynn explained that the county has been active in supporting the construction of infrastructure needed for the Minnesota Steel mill project which would also service the Mesaba Project.

“We will continue to work with Excelsior on terms and agreements that are mutually acceptable,” said McLynn in an interview with the Herald-Review Friday morning.

“We are still in the middle of the fact-finding phase,” McLynn added. “The draft Environmental Impact Statement (EIS) will be released soon and we’re waiting for that piece of information.”

Representative Loren Solberg (DFL-Grand Rapids) said he has always been in support of the states strong review system, “Companies have to respond to the review process.”

Both Overland and Micheletti noted that the ruling could have far-reaching effects. Several IGCC power plants are in the works around the county, and Minnesota was seen as the first large-scale project to test the public’s palate for new coal plants.

Micheletti said Excelsior will continue to work to bring a power plant to Taconite, adding he hopes the public utilities commission has “more experience” with energy issues.

“The reaction (we received) is that we’ve introduced the most obnoxious kind of project you could ever imagine, rather than introducing the cleanest coal plant in the world,” he said.

And a note of congratulations from Stephanie with this original:

I’ll keep it with the line drawing of me falling out of my broken chair, and the very moving photo of her with her assassinated ducks laid out on a board…

The silence is deafening… the email is way too quiet, well, plus my phone reception sucks out here… but here’s a response I received after sending out notification of the ALJ Recommendation to PUC:

Please remove me from your email list you pyschotic freak - pull your head
out of your ass and join the real world.  You and the rest of the CAVE
people do not deal in facts or in reality.

If overaggressive physcotic freaks like you would use your energy for
something productive we might actually find solutions to our problems rather
than being constantly creating new ones.

From someone ostensibly named “Shalom.” Hmmmm…

And just in case you missed it, here’s the ALJs’ Recommendation of Denial:

ALJ RECOMMENDATION – DENIAL OF PPA

One relevant thing that made me snort — consider Pawlenty’s rabid and unjustified support of Mesaba, knowing it was going down in flames — and he had this to say recently per Polinaut:

“For the 900th time, I am not running for Vice President. I don’t want to be Vice President and I’m focused on being governor of the state of Minnesota and have said I will fill out my term.”

That was in the Brainard Dispatch too:

Pawlenty makes clear he wants to stay put

From the Duluth News Tribune, here’s another guy who will have to run for office again, yet here he is, pontificating on Mesaba’s demise:

“I’m disappointed,” said Sen. Tom Saxhaug, DFL-Grand Rapids. “But it’s not the Public Utilities Commission [making the recommendation]. We’re still waiting to hear from them.”

And remember, Sen. Tom Saxhaug is the guy who tried to ram through the Mesaba personal property tax exemption without letting the local governments know he’d submitted the bill!!! The county got on him about it and it was QUICKLY amended to include the necessity of a Host Fee Agreement to assure local governments get their fair share instead of getting screwed. He showed just what constituents he was representing in that little maneuver, and he showed his utter disregard for the public interest.

Meanwhile, Tom Micheletti’s not having a very good day.

Also from the Duluth News Tribune, Micheletti’s comments:

On Thursday night, Micheletti said he is “shocked,” by the judges’ conclusions.

“Our lawyers are still reviewing it,” he said. “But it appears it’s entirely negative. It’s totally at odds with the national consensus [on cleaner power plants] and essentially adopts the position of the Minnesota Department of Commerce that the project doesn’t offer any advantages over traditional power plants.”

Micheletti said the conclusions don’t mean the project is dead, but he clearly isconcerned.

“Obviously, something like this takes you back,” Micheletti said. “It’s so at odds with technology that could be a savior.”

Here’s from the STrib:

Coal-to-gas plant dealt a setback by judges

The judges said energy and environmental costs of building and operating the plant outweigh the economic benefit.

By Mike Meyers, Star Tribune

The dream of a $2 billion coal-gasification plant on the Iron Range the was dealt a setback Thursday when two administrative law judges urged the Minnesota Public Utilities Commission to deny the plans of Excelsior Energy, a newcomer power company.

While not binding on regulators, the ruling is filled with warnings, from doubts that the plant will burn coal as cleanly as guaranteed to an opinion that Excelsior would not, as promised, likely deliver electricity at a lower cost than alternative energy suppliers.

After sifting through thousands of pages of testimony in a hotly contested case, judges Steve Mihalchick and Bruce Johnson wrote that the plan is “not in the public interest.”

The judges’ warnings to the utilities commission — which is expected to rule on the project later this year — include cautions about whether risks to Minnesota’s economy would be overshadowed by the benefits of the biggest investment in decades on the troubled Iron Range.

And, in a move that undermines a key argument for building the Excelsior plant, the judges found that the design to transform pulverized coal into gas is not particularly new or innovative.

To build the plant, Excelsior needs a customer. The Legislature four years ago directed Xcel Energy Inc. to buy power from the proposed 600-megawatt plant. But Xcel, in expert testimony, said the power isn’t needed in 2011 when Excelsior’s Mesaba plant is supposed to open.

Xcel argued that Excelsior’s power would cost more than alternatives and put Xcel at financial risk if everything didn’t go according to plan — two arguments the administrative law judges accepted in their findings.

The project would create 3,500 construction jobs from 2008 to 2011, according to Excelsior’s economic consultant, and employ 107 full-time workers to keep the plant running. The company said millions of dollars in benefits would flow to local communities, as well.

But the judges were skeptical. “There are economic development benefits to the state from the project, especially to the nearby area,” they wrote. “There are also negative economic development impacts from the increased costs that will be passed on to business and individual ratepayers and from the negative environmental consequences of the project.

“Overall, the economic development benefits weigh in favor of the project. But they do not justify an unreasonable price for its electric capacity and energy.”

Excelsior officials were unavailable for comment.

Xcel offered a cautious response:

“We have not had the opportunity to review the administrative law judges’ report in detail,” said Judy Poferl, Xcel director of regulatory administration. “We appreciate that the judges recognized the concerns raised by the parties to this proceeding. We will continue to participate in this case and look forward to resolution by the Minnesota Public Utilities Commission.”

The commission is expected to rule on the proposal this summer.

Mike Meyers • 612-673-1746 • meyers@startribune.com

.

Read all about it:

ALJ RECOMMENDATION – DENIAL OF PPA

From the decision:

CONCLUSIONS OF LAW

1. The Minnesota Public Utilities Commission and the Administrative Law Judges have jurisdiction over this matter pursuant to Minn. Stat. §§ 216B.08, 216B.1693, 216B.1694, and 14.50, Minn. R. 1400.5100-.8400, and to the extent not superseded by those rules, Minn. R. 7829.0100-.3200.

2. The Commission gave proper notice of the hearing in this matter, has fulfilled all relevant substantive and procedural requirements of law or rule, and has the authority to take the action proposed.

3. The IEP Statute permits the Commission to amend or modify the initial PPA to raise or lower the amount of the Project’s statutory power sale entitlement.

4. The Project does not satisfy the first prong of the definition of an Innovative Energy Project under Minn. Stat. § 216B.1694, subd. 1(1), because the Final PPA does not assure that coal will be used as the primary fuel and because it has not been established that the Project significantly reduces all of the statutorily identified emissions in comparison to traditional technologies.

5. The Project satisfies the second prong of definition of an Innovative Energy Project under Minn. Stat. § 216B.1694, subd. 1(2), because it is capable of offering a long-term supply contract at a hedged, predictable cost.

6. Since the Project fails to meet the requirements of Minn. Stat. § 216B.1694, subd. 1(1), it is not an “Innovative Energy Project” for purposes of Minn. Stat. § 216B.1694.

7. Since the Project is not an Innovative Energy Project, it does not qualify under Minn. Stat. § 216B.1694, subd. 2(a)(4), as a “Clean Energy Technology” as defined in section 216B.1693.

8. The Final PPA is not in the public interest as required by Minn. Stat. § 216B.1694, subd. 2(a)(7).

9. The Final PPA should not be approved, primarily because of its unreasonable cost to Xcel Energy and its ratepayers, the likelihood that its cost will increase, not decrease over time, and because of the other deficiencies identified in the Findings. While Excelsior Energy and its witnesses have claimed that the PPA cost will become more reasonable in the future, particularly in light of the Project’s environmental benefits, there is not sufficient evidence of that value to overcome the very significant cost difference that exists today.

10. The Project and its technology do not meet the definition of a Clean Energy Technology under Minn. Stat. §216B.1693(c) because they do not significantly reduce all the statutorily identified emissions in comparison to traditional technologies.

11. The Project and its technology do not satisfy the requirements of Minn. Stat. § 216B.1693(a) because the Final PPA is not, and is not likely to be, a least cost resource including the costs of ancillary services and other necessary generation and transmission upgrades.

12. It would be contrary to the public interest for the Project to supply at least two percent of Xcel Energy’s retail load starting in 2012.

Based on the foregoing Conclusions, and for reasons set forth in the following Memorandum, the Administrative Law Judges make the following:

RECOMMENDATION

IT IS HEREBY RESPECTFULLY RECOMMENDED that the Public Utilities Commission order:

1. That Excelsior Energy’s Petition asking the Commission to approve, amend, or modify the terms and conditions of the Final PPA under Minn. Stat. § 216B.1694 be DENIED and that the Final PPA be DISAPPROVED.

2. That if the Commission approves the Final PPA, that it first be amended through negotiations among Excelsior Energy, Xcel Energy, and the Department to address the deficiencies identified in this Report, then returned to the Commission for final approval.

3. That Excelsior Energy’s Petition asking the Commission to determine under Minn. Stat. § 216B.1693 that the Project and its IGCC technology is, or is likely to be, a least-cost resource, thus obligating Xcel Energy to use the plant’s generation for at least two percent of the energy supplied to its retail customers, be DENIED.

4. That Excelsior Energy’s Petition asking the Commission to determine that, under the terms of Minn. Stat. § 216B.1693, at least 13 percent of the energy supplied to Xcel Energy’s retail customers should come from the Units I and II of the Mesaba Energy Project by 2013 be considered in Phase 2 of this matter.

Dated: April 12, 2007

/s/ Steve M. Mihalchick
STEVE M. MIHALCHICK
Administrative Law Judge

/s/ Bruce H. Johnson
BRUCE H. JOHNSON
Administrative Law Judge