Why has Excelsior Energy chosen a site in the middle of woods and wetlands, without any existing infrastructure?

State and Federal Funding Approved So Far:
$9.5 million dollars from IRR for Excelsior Energy’s project
$10 million dollars from State Renewable Energy Resource Fund
$36 million dollars from Federal Department of Energy
$800 million dollars in Federal loan guarantees
$12 million dollars in State Bonding for Itasca County Infrastructure

Other project-related costs:
From Herald-Review - Friday, June 30th, 2006
County board gets an update on conservation easement projects
... Approved a contract with the Range Association of Municipalities and Schools for the services of Ron Dicklich to work as project coordinator for the Minnesota Steel and Excelsior Energy projects. The total of the contract is not to exceed $5,000 per month, which is reimbursable from state bonding funds.
Approved a contract with SEH to provide engineer assistance for the Minnesota Steel and Excelsior Energy projects. The contract is valid from June 28, 2006 through Aug. 31, 2006 and will be paid for hourly, not to exceed a total of $10,000...

Press Release
CAMP issues economic position paper
Citizens Against the Mesaba Project
11/10/2006

Economics of the Mesaba Energy Project
Prepared by Citizens Against the Mesaba Project
November, 2006

The Itasca Economic Development Corporation, relying on two studies by the UMD Labovitz School of Business and Development, recently announced its support for the Mesaba Energy Project. The initial Arrowhead Region study, commissioned by Excelsior Energy, was published in 2005; a second study, commissioned by the IEDC and focussing on Itasca County, was published in April 2006. These studies are seriously flawed and misleading, and the disclaimers given by the authors have been ignored. The authors have cautioned that these studies are not cost-benefit analyses and should not be used to determine policy or make decisions.
The Minnesota Chamber of Commerce has concluded that the net economic impact of the Mesaba Energy Project to the state is likely to be negative.* If all costs were properly analyzed the net impact to Itasca County would likely also be negative. [more...]

*Testimony of William Blazar, Sr. V.P., Public Affairs and Business Development, before the Minnesota Public Utilities Commission (MPUC), 10/10/06

S.F. No. 2570 - Mesaba Energy Plant Property Tax Exemption (first engrossment)
Author: Senator Tom Saxhaug
Prepared by: Matthew S. Grosser, Senate Research (651/296-1890)
Date: April 7, 2006

Summary:

The bill removes most of the requirements in law for an exemption from property tax for machinery and other personal property associated with the proposed Mesaba energy plant. The requirements being stricken include: that the plant be located at an energy park; that the plant be located at an active or former mining site; that the location of the plant have on-site rail access; that the location have direct rail access to a Great Lakes port; and that the location have sufficient on-site water resources. The bill also amends the time frames during which phases of construction of the facility must begin. The bill requires an agreement between the owners of the facility and the host community for payment in lieu of property taxes.
http://www.revisor.leg.state.mn.us/revisor/pages/search_status/status_detail.php?b=Senate&f=sf2570&ssn=0&y=2006
S.F. No. 2570, 1st Engrossment - 84th Legislative Session (2005-2006) Posted on Mar 20, 2006 1.1
A bill for an act
1.2 relating to taxation; modifying the personal property exemption for certain
1.3 electric utility generation facilities;amending Minnesota Statutes 2004, section
1.4 272.02, subdivision 55.
1.5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 Section 1. Minnesota Statutes 2004, section 272.02, subdivision 55, is amended to read:
1.7 Subd. 55. Electric generation facility; personal property. Notwithstanding
1.8 subdivision 9, clause (a), attached machinery and other personal property which is part of
1.9 an electric generating facility that meets the requirements of this subdivision is exempt. At
1.10 the time of construction, the facility must be sited on an energy park that (i) is located on
1.11 an active mining site, or on a former mining or industrial site where mining or industrial
1.12 operations have terminated be designated as an innovative energy project as defined in
1.13 section 216B.1694, (ii) is be within a tax relief area as defined in section 273.134, (iii)
1.14 has on-site have access to existing railroad infrastructure within less than three miles, (iv)
1.15 has direct rail access to a Great Lakes port, (v) has sufficient private water resources
1.16 on site, and (vi) is have received by resolution approval from the governing body of
1.17 the county and township or city in which the proposed facility is to be located for the
1.18 exemption of personal property under this subdivision, and (v) be designed to host at
1.19 least 500 megawatts of electrical generation.
1.20 Construction of the first 250 500 megawatts of the facility must be commenced
1.21 after January 1, 2002 2006, and before January 1, 2005 2010. Construction of up to an
1.22 additional 750 megawatts of generation must be commenced before January 1, 2010
1.23 2015. Property eligible for this exemption does not include electric transmission lines and
1.24 interconnections or gas pipelines and interconnections appurtenant to the property or the
2.1 facility. To qualify for an exemption under this subdivision, the owner of the electric
2.2 generation facility must have an agreement with the host county, township or city, and
2.3 school district, for payment in lieu of personal property taxes to the host county, township
2.4 or city, and school district.
2.5 EFFECTIVE DATE.This section is effective the day following final enactment.

S.F. No. 3131 - Omnibus Tax Bill
Innovative Energy Project Personal Property. Modifies the requirements for a property tax exemption that was granted to an electric generating facility. Under the current law, the facility was required to be sited on an energy park that was located on an active mining site, on a former mining or industrial site, where operations have terminated. This criterion is replaced with a requirement that the facility must be designated as an innovative energy project. The requirement that the facility have on-site access to existing railroad infrastructure is modified so that it must have access to existing railroad infrastructure within three miles. The requirements that the facility must have direct rail access to a Great Lakes port and have sufficient private water resources on site, are stricken and replaced by the requirement that this facility would have received approval from the governing body of the county, township, or city where it is located for the exemption of the personal property. Current law requires the construction of the first 250 megawatts of the facility must be commenced between January 1, 2002, and January 1, 2005. This provision would require construction of the first 500 megawatts between January 1, 2006, and January 1, 2010. Construction of an additional 750 megawatts of generation is required under current law to be commenced before January 1, 2010. This section extends that period for five years. It also provides that in order to obtain this exemption, the owner of the electric generating facility must have an agreement with the host county, township, or city and school district for payment in lieu of personal property taxes to those taxing jurisdictions.
http://www.revisor.leg.state.mn.us/bin/bldbill.php?bill=S3131.3.html&session=ls84
S.F. No. 3131, 3rd Engrossment - 84th Legislative Session (2005-2006) Posted on Apr 21, 2006

58.31 Sec. 10. Minnesota Statutes 2004, section 272.02, subdivision 55, is amended to read:
58.32 Subd. 55. Electric generation facility; personal property. Notwithstanding
58.33 subdivision 9, clause (a), attached machinery and other personal property which is part of
59.1 an electric generating facility that meets the requirements of this subdivision is exempt. At
59.2 the time of construction, the facility must be sited on an energy park that (i) is located on
59.3 an active mining site, or on a former mining or industrial site where mining or industrial
59.4 operations have terminated be designated as an innovative energy project as defined in
59.5 section 216B.1694, (ii) is be within a tax relief area as defined in section 273.134, (iii)
59.6 has on-site have access to existing railroad infrastructure within less than three miles, (iv)
59.7 has direct rail access to a Great Lakes port, (v) has sufficient private water resources
59.8 on site, and (vi) is have received by resolution approval from the governing body of
59.9 the county and township or city in which the proposed facility is to be located for the
59.10 exemption of personal property under this subdivision, and (v) be designed to host at
59.11 least 500 megawatts of electrical generation.
59.12 Construction of the first 250 500 megawatts of the facility must be commenced
59.13 after January 1, 2002 2006, and before January 1, 2005 2010. Construction of up to an
59.14 additional 750 megawatts of generation must be commenced before January 1, 2010
59.15 2015. Property eligible for this exemption does not include electric transmission lines and
59.16 interconnections or gas pipelines and interconnections appurtenant to the property or the
59.17 facility. To qualify for an exemption under this subdivision, the owner of the electric
59.18 generation facility must have an agreement with the host county, township or city, and
59.19 school district, for payment in lieu of personal property taxes to the host county, township
59.20 or city, and school district.
59.21 EFFECTIVE DATE.This section is effective the day following final enactment.

Articles:
$1 billion bonding bill gets green light from Pawlenty
Associated Press
Thursday, June 1st, 2006

Excelsior Energy gets $36 million
Federal funds flow for Iron Range coal gasification project
By BILL HANNA
Mesabi Daily News
Monday, May 22nd, 2006

Lawmakers take offensive on 21st Century Minerals Fund
John Hendrickson
Herald-Review
Wednesday, May 3rd, 2006

Excelsior Energy takes step toward tax exempt status
John Hendrickson
Herald-Review
Wednesday, April 12th, 2006

Itasca County Board Meeting
Excelsior Energy & MSI 4/4/06
Coordinator Chuck Michael, SEH (Short Elliott Hendrickson Inc.)
Mesaba Energy Project Update - April 2006 (PDF file)

State To Spend Renewable Energy Funds On Coal Gasification Plant
WCCO news
February 18, 2005

Unproven Company with Ties to Corporate Failures Slated to Receive $800 Million Loan Guarantee in Energy Bill
http://www.citizen.org
November, 2003

The WasteBasket
Taxpayers for Common Sense
October 14, 2003

Web log commentary from David Bly
October 2, 2003