Excelsior Energy announced Friday that it had taken another step toward accessing federal loan guarantees for an Iron Range plant that would gasify coal and use the fuel to generate electricity. The project was one of 16 the Department of Energy approved to proceed with filings.
Assuming the proposed power plant materializes, Excelsior could be in line to receive loan guarantees that would cover 80 percent of the project costs. As Excelsior proposes to spend about $2 billion to construct a 603-megawatt plant, the federal loan guarantees could total $1.6 billion.
Excelsior aims to construct its first facility in Itasca County, just north of the town of Taconite. However, the Minnesota Public Utilities Commission dealt the project a setback earlier this year when it rejected a plan that would have compelled Xcel Energy to purchase the output from Excelsior's power plant.
Excelsior CEO Julie Jorgenson said her company will take the PUC's comments into account in putting together a new proposal that would involve the sale of the proposed plant's power output to multiple utilities in the state.
The company claims its proposed plant would produce far less pollution than a conventional coal-fired plant. Excelsior also has said its project could include a system that would capture and sequester carbon emissions from the plant.
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Jorgenson said she views the application go-ahead Excelsior received from the Department of Energy as "a huge milestone" for the project.
