The Minnesota Public Utilities Commission unanimously agreed Tuesday that permits issued to Excelsior Energy two years ago for a flexible-fuel power plant should suffice for the construction of the natural gas-fired power plant the company is working toward now.
The plant is proposed to be built on a site in the city of Taconite, and the permits also govern the route of high-voltage transmission lines as well as a natural gas pipeline.
Opponents including the Sierra Club and a citizens' activist group argued that the permits should not be approved for the revised project without further review. But Minnesota lawmakers passed legislation in support of allowing plans to move forward without new permit applications. That legislation appears to buy Excelsior until 2019 to begin construction.
So far, however, the company has not found a customer for the power its would-be plant would produce.
A final written order formally documenting Monday's decision by the PUC should be issued in several weeks.
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In 2001, Excelsior proposed to build an Iron Range plant that would convert coal into a gasified fuel and burn it as a highly efficient way to generate power. The innovative $2.1 billion plant was expected to operate with fewer emissions than a conventional coal-fired facility, and was supposed to create more than 1,000 construction jobs as well as 150 full-time, ongoing positions in the small town of Taconite, located next to Itasca County's Canisteo mine pit.
But those plans never materialized, and the project was recently revamped to call for a 600-megawatt plant -- about half the size first proposed -- running on natural gas rather than coal.
The controversial project has been heavily subsidized with public tax dollars.
In 2004, the U.S. Department of Energy earmarked $36 million to help Excelsior develop its plant. But this July, department officials decided to withhold additional funding for the project, after investing about $22 million.
Bill Gibbons, a spokesman for the DOE, said: "The department determined that it was not in the best interests of the taxpayer to continue investing in this project past the initial stage."
Besides the $22 million in Department of Energy funds it received, Excelsior also borrowed about $9.5 million from the Iron Range Resources and Rehabilitation Board. The company garnered yet another $10 million in grant funds from the Minnesota Public Utilities Renewable Development Fund.
