Having been shut down at the state PUC (and by Xcel, Minnesota Power and most other energy companies) Excelsior Energy, proponent of the coal gas Mesaba Energy Project, is now trying to hook power purchase deals for its theoretical electricity with municipal utilities in Minnesota. Excelsior will be touring with the Minnesota Municipal Utilities Association, trying to encourage small and mid-sized towns to buy power from a plant that does not yet exist for prices likely much higher than today’s market would bear.
Thus far, Iron Range Resources has given Excelsior the equivalent of start-up funding while the state and federal government has poured millions of real dollars and hundreds of millions of PR-worthy “promised” dollars into this company. Before this, Excelsior was simply a collection of lawyers and lobbyists who enjoyed tangential personal, professional and political relationships with Range and state leaders. To date, scant private funding has been reported for this project, which has no customer, permits or objective chance of success, mostly owing to the project’s immense cost and the deep questions about the science of commercial coal gasification and carbon sequestration.
And yet, here we go again. (From Carol Overland, who represents some of the parties involved at the state PUC)
Living and working where I do, I find the notion that municipal utilities would even remotely consider locking into Excelsior’s outrageous rates all the more insulting. In Hibbing, a near civil war has broken out over the public utility’s rate hikes amid rising coal prices and the unreliability of new biomass technology. That’s wood, keep in mind, not sophisticated gas made from coal. (For further fun about Hibbing’s situation, read Hibbing Daily Tribune publisher Wanda Moeller’s fine column about the mess). That’s not to say that new technology is bad; just that it’s complicated and subject to engineering setbacks. Well, Excelsior is proposing the mother of all engineering projects, one that is very unlikely to work well at a reasonable price for many years. That is, if it’s built which it probably won’t be.
No city is ever going to lock into a power purchase agreement with a company that can’t guarantee competitive rates and reliable service. If Excelsior could deliver those things, they’d have a customer without a lick of government help and the permits would be rammed through a la Minnesota Steel. This municipal tomfoolery is a last ditch effort for survival and it’s fitting that their death throws would include such a slight to the taxpayers and ratepayers of Minnesota towns. Once everyday Rangers finally realize that this “jobs creating” monstrosity is poised to take money directly out of their pockets, it’s lights out for good.
Even if I supported this project, the economic facts don’t.
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