May 8 PUC meeting could reveal fate of Mesaba boondoggle

The Minnesota Public Utilities Commission will revisit the second phase of the Mesaba Energy Project Power Purchase Agreement (PPA) with Xcel at its May 8 meeting. Two major questions are to be answered. Will the PUC recognize Excelsior Energy's proposed coal-gas power plant as a "least cost" innovative project AND will they set a deadline for negotiations between Xcel and Excelsior to set prices?

An Administrative Law Judge, in an advisory ruling, told the PUC last fall that the Mesaba project is far too expensive to be in the public's interest. And Xcel doesn't need or want Excelsior's power. Unless the state PUC mandates that Xcel buy this overpriced power from this boondoggle yet-to-be-built power plant, there can be no project. This May 8 PUC meeting might be the beginning of the long overdue end of this economic development farce. Let's hope so, because if Excelsior gains new life through political dealings then Mesaba becomes an election issue that badly muddies the U.S. Senate race. I prefer not to think about that until May 8.

Coal gas boondoggle circling the drain

There hasn't been much coverage about the Minnesota Public Utilities Commission meeting from this past Thursday. Two decisions regarding my least favorite Iron Range economic development project emerged from that meeting. As you may know, Excelsior Energy is proposing the Mesaba Energy Project, a coal-gas power plant for the Iron Range. The project enjoys a good deal of support from the elected officials on the Iron Range but has also attracted well-organized citizen opposition. I continue to repeat and repeat and repeat that this project is a boondoggle that will never produce jobs or electricity.

Anyway, here's the dispatch from a fellow Itasca County resident and MinnesotaBrown reader who was at the meeting:

1) The PUC ruled that transmission infrastructure for the Mesaba Energy Project IS exempt from a Certificate of Need as is stated in Minn. Stat. § 216B.1694, but Excelsior Energy still has to have routing and environmental permitting reviews completed on the route(s). This allows EE to move forward with preliminary design, but no construction. (If they have the money to do so, which is a big question mark.)It is possible that Minnesota Power will take this to the courts.

2) The PUC denied Excelsior Energy's petition for an unlimited stay on the (Power Purchase Agreement) for Phase II. This means that the PUC will address the PPA for Phase II and hopefully soon!

For the uninitiated, the "power purchase agreement" has to do with a 2003 state law in which several local legislators tried to mandate that Xcel Energy buy power from Excelsior, which was then (and remains) essentially a collection of lobbyists and consultants raising money off the government. The cost of this unique kind of "clean coal" plant is enormous and Excelsior would be unable to gain financing without a guaranteed customer.

Anyway, Thursday's meeting means that the PUC will decide relatively soon on this power purchase agreement. Anti-Mesaba comments from several members of the PUC indicate that the jig is up. If the current PUC is to vote on this issue they are likely to deny the PPA and effectively kill this lousy excuse for a "jobs" project.

UPDATE: Sunday's Grand Rapids Herald-Review reports on the PUC meeting. Relying solely on an interview with Excelsior's co-CEO Tom Micheletti and a confounded Minnesota Power PR rep, the story misses the point. Micheletti and Excelsior have thrived up here because so few local media types understand the energy business or the nature of this project. Anyway, here is Micheletti's desperate spin on Thursday:

“It went very well,” said Excelsior Energy CEO Tom Micheletti by phone about the hearing in St. Paul after it was completed.

Micheletti felt the transmission issue was the more important of the two petitions before the MPUC. He also did not have any qualms about expressing his disdain for Minnesota Power, which asked the MPUC to delay a decision on transmission infrastructure until final action on the power purchase agreement has been taken.

“They (Minnesota Power) are taking frivolous and unwarranted positions on state law,” Micheletti said. “I have a new name for them. ARP. Anti Range Power. And you can quote me on that.”

Ha Ha! They DID quote him! Of course, Minnesota Power has been making power on the Iron Range for almost 100 damn years. Excelsior never will. So, you know. I have a new name for them. BSF. The first word is "Bull" and the last one is "Factory." I'll let you figure out that middle word.

As sure as B.S. trails a boondoggle

Come on down, Iron Range! It's time for another fun episode of "Logical Fallacy."

Yesterday, Xcel Energy -- the largest and most influential energy company in the state -- said they aren't going to invest in any new coal plants until the government decides on firm carbon limits or until the cost of cleaner coal plants become commercially viable. Minnesota Power and other utilities have released similar declarations this year, and indeed this is the prevailing viewpoint across the country according to media reports I've read.

So here's your challenge. Spot the logical fallacy from this story about Excelsior Energy's appeal of the state PUC's decision to deny their efforts to force Xcel to buy their power.

A) "The Public Utilities Commission has placed a continual and constant burden on us to demonstrate that this plant is needed when the Legislature has already determined that issue,” [Excelsior CEO Tom Micheletti] said.

B) “The bottom line is: This project is still going to be built. It will happen, as sure as night follows day,” Micheletti said.

C) “It’s going to happen because we need the power, and someone needs to demonstrate that coal can still be used to produce power in this country,” Micheletti said.

ANSWER: Well, shucks. You get the premise. All of the above. Micheletti's logic implies that our energy future is solely dependent on coal, that this project is the only way to accomplish energy on the Iron Range and that the Legislature should simply eliminate the PUC because those decisions should best be left to state senators who take money from and make buddies with those who want to start power plants.

A little natural gas peaking plant in Hibbing or Chisholm or Buhl would take care of our problems without driving up energy prices and would give us time to develop cleaner baseload power. A $2 and a half billion boondoggle run by lawyers is not necessary or smart.

Whenever you hear a lawyer/lobbyist say "As sure as night follows day" and "the bottom line" in the same sentence, you can bet you're dealing with unfiltered B.S. Don't fall for it, folks.