Excelsior Energy plans for Iron Range plant hit another snag

ST. PAUL (AP) - The plans by Excelsior Energy to build a coal gasification plant on the Iron Range have hit a major snag.

Minnesota's Public Utilities Commission has ruled that the plant is too costly and risky and is not in the public interest.

Instead, the regulators told Excelsior officials to renew talks with Xcel Energy about buying power from the proposed plant.

Excelsior Energy says the project would save ratepayers money. But Xcel Energy and the public utilities commission say it would increase energy prices.

Excelsior Energy President Tom Micheletti says the PUC clearly supports the idea of coal gasification-generated electricity.

"I think the commission made it pretty clear that they want this project to happen. They don't know exactly how," said Micheletti. "They said one thing, that they don't want Xcel's customers to bear all of it. But they've sent a message out that they want this project to happen, and I think they were very clear about that."

The two companies will try again to write a power purchase agreement. The PUC will also encourage other Minnesota utilities to consider purchasing power from the Mesaba Energy Project.

Environmentalists have also criticized the plant, saying that it would spew greenhouse gases and make global warming worse.

(The Associated Press contributed to this report)

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