The Minnesota Public Utilities Commission dealt a blow to Excelsior Energy Inc.'s plans to build a gasified coal plant on the Iron Range today.
Commissioners unanimously rejected Excelsior's petition to reconsider an earlier denial of a proposed power purchase agreement with Xcel Energy.
"Today's decision wasn't a surprise to anyone who has been following the docket," said Tom Osteraas, senior vice president and general counsel for Excelsior.
"Back in August 2007, the commission disapproved the planned purchase agreement we had proposed, and this was the culmination of the disapproval they ordered almost two years ago," he said.
Marc Fournier, a rate analyst for the commission, said the case is now considered closed. But Excelsior may still challenge the PUC's decision by taking the matter to the Minnesota Court of Appeals.
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Today's ruling throws into question the future of Excelsior Energy's plans to construct a 600- to 1,200-megawatt power plant near the town of Taconite.
But the project is not dead, according to Osteraas.
"We're still moving forward," he said.
While identifying a buyer for the power it would produce is a key element to making Excelsior's project a go, it's just one of several critical steps, according to Osteraas. Other tasks at hand include conducting an environmental review, obtaining needed permits for the project, completing engineering work and lining up financing. Osteraas said the company has made "tremendous progress" on a number of these fronts.
"Our project continues to be important to meeting national and state energy security goals. It's also represents a way to replace the existing fleet of coal plants with a cleaner technology." he said.
Osteraas said the importance of the project is underscored by federal loan guarantees and investment tax credits that have been approved for its proposed power plant.
