The energy company believes it can overcome a setback dealt the project Thursday by two judges who urged it not be built. Opponents say the deal is dead.
Excelsior Energy officials on Friday said they expect to overcome a new hurdle to building the company's planned $2 billion Mesaba coal-gasification plant on the Iron Range.
"Excelsior remains confident that the PUC [Public Utilities Commission] ... will look at the comprehensive record in this case and determine that the Mesaba Project is in Minnesota's best interest," they said.
But the leader of a citizens group opposed to the plan predicted the demise of the long-planned plant to be build near City of Taconite.
"It's dead. I don't think it's going to die right now, but I think it's coming," said Ed Anderson, who is co-chairman of Citizens Against the Mesaba Project.
Many of the coalition's members live in northern Minnesota.
After studying thousands of pages of testimony, two administrative law judges concluded that the state should turn down a plan for Excelsior to generate about 600 megawatts of electricity up north to sell chiefly to Xcel Energy Inc. Excelsior promises to bring 3,500 construction and ancillary jobs to the economically depressed region.
The plant would add 107 full-time, permanent jobs, developers said.
The Minnesota Legislature in 2003 mandated that Xcel buy power from a newcomer power company, Excelsior, if a number of cost, design and environmental conditions were met.
In a ruling released Thursday, the judges said Excelsior's plan failed many of those tests. The Mesaba plant would not be the lowest-cost electricity provider available to Xcel; it would not be as clean-burning as promised; and it would not represent cutting-edge, innovative technology, they said.
The opinion also seemed to favor an argument by Xcel that the amount of power generated by the Mesaba plant wouldn't be needed when it came on line in 2011.
Their ruling is not binding on the PUC, which is expected to make a decision this summer concerning the fate of the Mesaba proposal, but does represent a barrier to the project.
A state official who wrote to the law judges and urged greater pollution controls and consumer protection against high electricity rates said he hopes that changes to the Mesaba plan can keep the proposal alive.
"We continue to support the project. But we have the concerns that we've already articulated," said Ed Garvey, deputy commissioner of energy and telecommunications at the Minnesota Department of Commerce.
"Our intention is to work with the folks at Excelsior," he said.
In a prepared statement, Excelsior said that the law judges overlooked thousands of pages of expert testimony in reaching their conclusions.
Much of the company's criticisms centered on testimony that suggested that Excelsior's plant would be cleaner than conventional coal-fired plants and better able to keep carbon dioxide from entering the atmosphere -- testimony that the law judges didn't entirely accept.
"This conclusion is entirely at odds with technical reality and the consensus of national technology experts, including experts at Harvard and MIT, which have concluded that commercial-scale carbon capture from conventional coal plants is at least 10 years away," Excelsior said of the judges' ruling.
But environmental groups applauded the warnings raised by the law judges.
"If we don't need the power, why put up with the pollution?" said Anderson, of Citizens Against the Mesaba Project. "We don't think we get much out of this."