Critics say Excelsior needs to re-permit Mesaba as a gas project

Excelsior Energy is trying to work through opposition at the Minnesota Public Utilities Commission to its plan to drop coal gasification at its long-delayed Mesaba power plant project and develop the plant, with existing permits, with natural gas as the fuel.

In July 12 comments filed at the commission, Excelsior said that mncoalgasplant.com (MCGP.com) and the Sierra Club North Star Chapter are both opposing that plan. “In short, neither commenter raises any legally relevant objections, instead seeking to introduce new legal requirements for the Mesaba Project, in contravention of express requirements of Minnesota law,” the company said.

Minnesota statute requires that site and route permits for an innovative energy project must be deemed valid for a plant meeting certain requirements, Excelsior argued. The requirements are that the plant be a natural gas-fired plant located on one site designated as an innovative energy project site. The statute also specifies that the existing permits be deemed valid following issuance of a final state or federal environmental impact statement.

“As evidenced by the information supplied recently by Excelsior to the Minnesota Public Utilities Commission (Commission’) and by previous filings in this docket, the plant in question is ‘a natural gas-fired plant located on one site designated as an innovative energy project site…following issuance of a final state environmental impact statement,” said Excelsior. “No commenter has suggested that the plant does not meet these requirements. Therefore, the permits ‘must be deemed valid’ by operation of Minnesota law. Excelsior has been working to satisfy the request of the Minnesota Pollution Control Agency that the Commission confirm that Minnesota law directs that such permits are to be ‘deemed valid.’ A Commission finding is not a requirement of the statute,” the company said.

The Sierra Club North Star Chapter said in its June 29 comments that it opposes transferring the Excelsior Energy site and route permits, approved more than two years ago, for a coal plant to a new proposal for a natural gas plant.

“This is a significant request, and one in which the Commission should weigh the need, cost, and feasibility of the project. The Sierra Club believes that there is no reason to extend the two-year old permits to a new natural gas plant. As with the initial Mesaba Energy Project, Excelsior Energy has not produced evidence that there is need for this project,” the Sierra Club said. “There simply is no reason to grandfather a brand new natural gas plant into a permit determination made for a coal plant over two years ago, especially where there is no determination of need for the project.” Even if there was evidence of need for additional capacity, the commission “should not be forced to rubberstamp a fossil fuel project’s siting permit without consideration of clean energy options such as renewable energy or energy efficiency,” the Sierra Club said.

MCGP.com said in its extensive comments that the commission wants input on Excelsior’s project change request and frames the issues as whether the site and route permits are valid for the natural gas-fired generation facility now proposed at the same site, and whether additional environmental review is required under state law. Excelsior received extensive regulatory exemptions and benefits as a part of the 2003 Prairie Island legislation, the comments noted.

“Excelsior Energy is seeking assurance, prior to filing an Air Permit application with the MPCA that no additional environmental review is required,” MCGP.com said. “Under the statute, a number of provisions are triggered, but before that analysis, the Excelsior Energy proposal needs some scrutiny. Excelsior Energy must submit an amended application to the Commission with sufficient detail to allow for determination of applicability of the statute.”

MCGP.com argued that a conventional gas plant is far different from a coal gasification power plant and hardly qualifies as an ‘innovative energy project’ that was given the legislative exemptions and benefits. “If this natural gas plant, as proposed, is not a step towards an ‘innovative energy project,’ then the Innovative Energy Project statute is not applicable. Costs for an IGCC compatible natural gas power unit are higher than a typical natural gas plant. Again, we don’t know what Excelsior Energy is proposing – it must disclose precisely what is proposed,” the organization said.

Excelsior told the commission it is currently planning to limit initial development to one of the two IGCC units to only the power block (i.e., as a natural gas combined cycle plant). All impacts of this new facility are either unchanged or lower relative to the IGCC, the company added in arguing that the existing site permit be extended to cover the project change, which would forestall the need to get a new site permit. The approved permit authorized Excelsior to build and operate a fuel flexible IGCC power plant to be constructed in two phases; each phase capable of producing about 600 MW (net) of baseload power. The plant site is referred to as the West Range site, of about 1,727 acres in size, located in Itasca County. 

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.