Legalectric

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:

economics-of-the-mep.pdf

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

CAMP issues Economic Position Paper

11/10/2006

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
11/10/2006
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 http://www.excelsiorenergy.com/public/filings_frame.html.

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: www.excelsiorenergy.com.

CONTACT: Will Harrington, 952-847-2372

E-mail: williamharrington@excelsiorenergy.com

AND I TRUST YOU ALL KNOW BY NOW THAT YOU CAN GET ALL THE TESTIMONY IN THE POWER PURCHASE AGREEMENT BY GOING OVER ON THE UPPER RIGHT HERE AND CLICKING ON “MESABA COAL GASIFICATION TESTIMONY!” (everything, not just the testimony Excelsior wants you to see).

From the City of Red Wing in its November Newsletter:

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The City has announced that it has released the background information gathered on the 2005 Council appointment candidates after the Office of the Attorney General deemed it public information based on the City’s lack of authority to collect such information. Note that in the time that this has been an issue, they didn’t announce that people had complained, they didn’t announce that one (moi) had filed a formal complaint, they didn’t announce the Dakota Co. Attorney opinion that a crime had not been committed, and did not announce that the Attorney General had determined that the City’s request for authorization and that therefore the City’s completion of background checks was unauthorized and inappropriate and smacked of prohibited intent of taking action as a result of information received, BUT the City does announce that it has released the information it gathered to the newspaper — seems a feeble attempt to cover up their improprieties and make it look like the paper is the bad guy when it’s the City that’s the bad actor.

Passive voice, circular and backwards thinking… drives me crazy. Distract, divert… that’s what they tried to do here: 071406-background-checks.doc Get a clue, it doesn’t work. The City is the party with the problem here. And here’s what they are saying they’re doing:

The City Council will evaluate the findings from the Dakota County Attorney’s Office and the Attorney General’s Office and consider their impacts on its practice of requesting consent to perform candidate background checks prior to the 2008 election.

Really. That’s it. It’s been three months and one election since I filed a formal complaint, and it’s been a month since the A.G.’s Opinion, and there’s been no statement that the “practice” will cease. They “will” evaluate, future tense? It hasn’t happened yet? I would think that something that the Council hasn’t authorized would be pretty damn easy to publicly and loudly discontinue — yet nothing.

Anyway, here’s what’s new… the City sent this announcement to all residents, to all addresses and P.O. Boxes in the City, and it’s a one sided slanted story they present. Their view is disproportionately focused on the Dakota Co. opinion, which “exonerates” the City, but remember, the Dakota Co. opinion only addresses whether there was criminal activity, not whether there is an actionable civil intrusion on candidates’ rights. It does not recount the strong language with which the City was told by the A.G.’s Office that background checks of candidates for elected office were not authorized, no way, no how! There does not seem to be any consideration for those people who were the subjects of background checks, and who did not anticipate this result.

When I learned of the A.G.’s Opinion and reviewed it, and recognized that it meant the information would be released to the paper, I expressed my concern about how it would be used. As an attorney dealing with confidential information of many sorts, and having been the subject of an intense background check to be admitted to the Minnesota Bar, I’m concerned about the positions those folks may be in. I hoped the information could be used to very generally expose the types of intrusive checks that were done by the City, and to use the types of information gathered and potential impacts to drive home the severity of this constitutional violation and intrusion on the city’s part. I expressly stated my concern about damage that could be done to those 2005 appointment candidates because it was an unexpected twist in this mess and it’s important to state it. Information can be misconstrued, peoples lives and circumstances change — it’s just not a good idea to walk the public through others’ lives. And it disturbs me that the City has presented it as they have, as if it is the paper holding the rope on the guillotine, when it was the City’s unauthorized acts that raised this issue. At this point, we have to trust the journalistic ethics of those with the information. I’ve been thinking about this for about a month now, have expressed my concern directly, and despite the “Wente the Hatch(et)” mistep (to put it mildly), I do trust that this will be handled responsibly (deep breathe here, holding breath…).

A disturbing aside — I raised this topic at the District 28 (Goodhue/Wabash Counties) Green Party meeting today, and there seems to be little appreciation of the Consitiutional issue this presents. It’s not just the City Council that has to “read your Constitution!” It’s so fundamental that I’m mentally sputtering in shock!

Primary documents:

A.G. Opinion – No authorization for background checks
ag-opinion-oct-6-2006.pdf

Dakota County Opinion – No crime was committed
(does not address whether there were civil wrongs)
dakota-co-attorney-sept-27-2006.pdf

Here’s the Red Wing City Council minutes when background checks were instituted, and a letter from the Red Wing City Attorney regarding appointment process v. a special election:
red-wing-council-minutes-june-21-27-july-11.pdf
red-wing-city-atty-election-process-advice-june-16-2005.pdf

Here’s the recent November newsletter announcement in pdf in case you want to print it out (I’m making it larger but it’s still hard to read):
city-newsletter-nov-10-2006.pdf

Here’s the newsletter announcement and sort-of explanation: