Legalectric

Digging back, I find I took the wrong CO2 emissions number from the table in Bob Evans testimony!

I’ve been using 720 tons of CO2 per hour and that’s wrong! It’s 616 tons of CO2 per hour.
The chart is Table RSE-1, on p. 13.

b-evans-rebuttal-testimony.pdf

So I’m going back to correct the “720” — gotta be accurate!!!
Not that I feel any better about Mesaba CO2 emissions though, because it’s still 5,396,160 tons annually!

Given all the AP articles this last weekend citing the cost of Excelsior’s Mesaba coal gasification (IGCC) project as $1.2 billion, and the Bill Hanna article using that same incorrect number, I figure that even though the Mesaba Daily News article coming up will supposedly state it’s “around $2 billion” or some such, let’s go over this one more time with cites and links and circles and arrows, and then we can all sit on the “Group W” bench together!!!

While full construction cost is typically an issue in a utility owned plant, the Excelsior Mesaba docket is a Power Purchase Agreement docket, so logically, we’re looking at the bottom line cost per kilowatt hour, sort of, for the most part, but that’s not all, because this is a weird case…

This project has a different review than any other — it’s a legislative mandate and includes a least cost review plus a public interest determination that looks at economic development benefits which logically also includes economic development costs.

The least cost language, from Minn. Stat. 216B.1693:

(a) If the commission finds that a clean energy technology is or is likely to be a least cost resource, including the costs of ancillary services and other generation and transmission upgrades necessary, the utility that owns a nuclear generating facility shall supply at least two percent of the electricenergy provided to retail customers from clean energy technology.

And the public interest determination of Minn. Stat. 216B.1694 requires:

(7) shall be entitled to enter into a contract with a public utility that owns a nuclear generation facility in the state to provide 450 megawatts of baseload capacity and energy under a long-term contract, subject to the approval of the terms and conditions of the contract by the commission. The commission may approve, disapprove, amend, or modify the contract in making its public interest determination, taking into consideration the project’s economic development benefits to the state; the use of abundant domestic fuel sources; the stability of the price of the output from the project; the project’s potential to contribute to a transition to hydrogen as a fuel resource; and the emission reductions achieved compared to other solid fuel baseload technologies;

Back to cost.

The cost of power from the Mesaba Project in cents per kilowatt hour is: 6.38 (fn. 1)

The construction cost of the Mesaba project is $2,155,680,783 (fn. 2)

Project Definition and Preliminary Design Phase
$44,491,010 (50/50 split DOE/Mesaba)

Final Design and Construction Phase
$2,054,826,915 (100% Mesaba)

Deomonstration/Operation Phase
$56,362,858 (24.5% DOE, 75.5% Mesaba)

Total Estimated Cost
DOE Share: $ 36,000,000 (1.7%)
Mesaba: $2,119,680,783 (98.3%)

What does that include? Good question. More on that soon…

The Amit Rebuttal compares the cost of Mesaba with the cost of Big Stone II, that is, the REVISED cost after the BS owners announced a 60% cost increase, from $1 billion up to $1.6 billion or more. So it is comparing apples to apples — I’ve heard talk that IGCC cost comparisons are comparing updated IGCC costs with old SCPC costs and that’s not happening here.
1. Slide 16, Excelsior Energy presentation to Metro Counties Energy Task Force, October 5, 2006. (I’ll scan this in and post later)

2. p. 1-3, DOE Notice of Financial Assisstance Award

In the Duluth News Tribune and the Grand Rapids Herald there are two more letters about Excelsior’s Mesaba coal gasification (IGCC) Project:

Consider all the costs of power purchase arrangement

Public hearings are coming up (Hoyt Lakes, Dec. 19 and Taconite Dec. 20) regarding a proposed power purchase agreement, through which Excelsior Energy will try to force Excel Energy, or NSP, to purchase power from Excelsiorâ??s proposed Mesaba Project at Taconite.

Excelsior Energy must show it is the least-cost power solution for Minnesota. In addition to its power causing NSP to raise rates, the Mesaba Project plant may cause a reduction in land values, a loss in tourism and related jobs due to pollution, and a halt to the influx of retirees into the area. Check what happened to West Virginia when the coal mines provided good-paying jobs for that state. Experts say drinking water there is being polluted to the point where areas of the state are nearly uninhabitable. It could happen here. What will be the cost? What of the added health-care costs? All costs should be considered when making this least-cost decision.

Lee Ann Norgord

Bovey

Local leaders should consider all information when making resolutions regarding Mesaba Energy

Grand Rapids Herald-Review
Thursday, December 14th, 2006 11:59:22 AM

Editor:

The Itasca County Commissioners and the Itasca Economic Development Corporation recently passed resolutions of support for the controversial Mesaba Energy Project. Important aspects of this project have not been adequately and accurately presented to the public, and apparently were not considered prior to these resolutions.

The commissionersâ?? letter said that they were, â??pleased that these economic development benefits do not come at the expense of the environment.â? There is alarming information in the permit application and the scoping documents for the Environmental Impact Statement regarding environmental damage and, we believe, it is irresponsible to make such a statement prior to the release of the draft EIS in February, 2007. CAMP (Citizens Against the Mesaba Project) supports appropriate economic development but this project would negatively affect the county and its residents.

Excelsior Energy has provided â??talking pointsâ? for proponents to use in supporting the project, which do not stand up to informed scrutiny, in our opinion. We believe there is already more than enough baseload generation in the planning stages to meet the projected need for our region. Experts have concluded that this project is not likely to provide cost-competitive energy and also question its reliability. The Minnesota Pollution Control Agency recently concluded that the emissions of IGCC technology are not significantly less than those of supercritical pulverized coal plants, except for sulfur dioxide. The main benefit claimed for IGCC is capture and sequestration of carbon dioxide but, we have found, this cannot be done on the Iron Range and the cost of piping it elsewhere is prohibitive.

The projected economic impact has been grossly inflated based on a study that cautions that it is not a cost-benefit analysis and should not be used to determine policy or make decisions. The Minnesota Chamber of Commerce has concluded that the net economic impact to the state is likely to be negative. The economic impact of this project is questionable at best, in our opinion, and will come at significant cost to the environment, public health, real estate values, tourism and recreation.

The IEDC 2005 Community Report lists five major goals, including â??Natural Environment: People in the Itasca Area will conserve and protect our natural resources to give future generations a healthy environment and a strong economy.â? This project would annual emit more than 5,000 tons of pollutants. This includes 54 pounds of mercury, which would adversely affect hundreds of lakes and hundreds of thousands of fish harvested each year. The emissions would cause illness for people with lung and heart disease, asthma for children, heart attacks and strokes, premature deaths, and sickness for otherwise healthy people. The project plans to close the Canisteo to recreational use and ruin it as a fishery with contaminated discharge water. This project is not compatible with protecting natural resources or creating a healthy environment.

Local leaders should carefully consider all of the available information. Understanding the true costs of this project inevitably leads to the conclusion that it would not benefit our community.

Ed Anderson, M.D., and Charlotte Neigh

CAMP co-chairs

This is a little holiday cheer from CURE, the “other” CURE, Clean Up the River Environment, who are doing grassroots work on Big Stone II.Â

And on the Big Stone I front, this is from my Sierra Club cohort, attorney Bruce Nilles, who is working on the Big Stone I air permit in a federal venue:

There is no way the Big Stone II coal plant will start construction in 2007, even were we to lose at every step, which ain’t gonna happen. No construction can commence without a final and effective air permit.

The state of South Dakota operates its air permit program under a delegation agreement from USEPA. This means that an air permit is a federal permit and our appeal option is directly to the US EPA Environmental Appeals Board. Under this system, once the state issues a final permit decision and the permit is appealed to the Environmental Appeals Board, the effectiveness of the permit is stayed. That is, no construction may commence during the appeal process. The appeal process takes any where from 9 months to as much as three years. Sierra Club and our allies have had significant success before the Board appealing permits issued in Illinois. For example, the Indeck permit was issued 10/2003 â?? the Board issued its final ruling (remanding the permit back to the state) in 10/2006. Indeck is now back to square one in the permitting process.

It appears that South Dakota/Otter Tail Power have finally realized they have a serious problem with the air permit. You will recall that the state issued the draft air permit in mid-2006. We submitted extensive comments opposing the issuance of the air permit. The state took the unprecedented step of withdrawing the draft air permit. Now the state has applied to USEPA to change its entire permit program so that air permits in SD are no longer federal permits, but state-issued permit through a state-approved permit program. Specifically, the state wants to eliminate the current bar on commencing construction while an appeal is pending. The state is pressuring USEPA to quickly approve this change â?? USEPA has told them the earliest they would propose to approve such a change would be in the Spring of 2007. The first step in the approval process is for USEPA to put out a notice in the federal register that it is proposing to approve the program changes. At that time we can submit comments opposing the change â?¦ and depending on the strength of our comments, USEPA may take months/years to make the change. All the while the state of South Dakota has not issued a final air permit and construction may not commence.

In addition to this serious problem, we have also filed a 60-day notice of intent to sue over ongoing clean air violations at BS1. We expect to file in federal court in January/February. If we are successful in this litigation it knocks out the validity of the air permit for BS2 which is premised on OTP taking credit for â??voluntaryâ? pollution reductions at BS1.

BS1 is the second dirtiest NOx polluter in the Nation â?? right after the Riverside plant in MN, which is on tap to be repowered w/natural gas shortly. The NOx emission rate from BS1 is more than 20 times higher than a coal plant w/modern pollution controls. So when they say they wonâ??t increase air pollution with the addition of BSII it should not give anyone any solace.

Let me know if you have any questions about any of this and feel free to share any of this with others.

Bruce

Done, it’s shared!.

Stolen from GRHR – Excelsior’s new office at the Peterson Funeral Home in ColeraineÂ

Oh, my, there he goes with that “L” word again…

Micheletti said that would not be the case.

â??Theyâ??re lying,â? he said.

Uh-huh…