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Great Lakes Article:

Power-Line Plan Takes Blow after Douglas County, Wis.,

Denies Utility Access
Milwaukee Journal Sentinel Knight Ridder/Tribune Business News
02/05/2002

Feb. 5--Plans for a massive power line across central and northwestern Wisconsin hit a setback after two committees of the Douglas County Board denied a utility access to county property along the path of the project.

The committees voted last week to deny a request by Minnesota Power to conduct surveys and soil tests on county property that Minnesota Power in Duluth and partner Wisconsin Public Service Corp. in Green Bay want to use to build the 210-mile line.

The decision is important because the Public Service Commission of Wisconsin has selected the route of the line and any alterations would have to go back to the agency. While utilities have the right to condemn private land if necessary, they can't do the same with public property.

On a separate front, plans are under way on Minnesota's Iron Range to build a 2,000-megawatt power plant -- twice the size of Wisconsin Energy Corp.'s Point Beach nuclear power plant -- that could supply electricity to Wisconsin.

If approved, the $2 billion plant project could begin construction as early as this year, and could start operating by 2006 or early 2007, according to executives of Excelsior Energy Inc., a Minneapolis company founded by three former Twin Cities utility executives.

As for Douglas County developments, the two utilities said they are studying their options and hope they can work out a agreement with county officials in Superior.

The action in Douglas County is the latest sign that opponents are still maneuvering to block the power line, which would run from Wausau to Duluth. The utilities said they could face the same opposition from Marathon County officials in Wausau.

Both the Marathon and Douglas County boards have officially opposed the line.

Wisconsin has been facing an electricity crunch in recent years, and the $215 million line has been viewed as part of the solution to shoring up supplies.

In addition to building new power plants, energy planners have said the state needs to upgrade its transmission system to ensure that new supplies of power can move more readily into Wisconsin.

The Minnesota power plant would be built at Hoyt Lakes, north of Duluth, on a site formerly occupied by LTV Steel Mining Co. It would use a process called coal gasification to reduce air pollution.

Rather than burning coal directly, coal gasification is a process in which coal reacts with steam and oxygen under high pressure and temperatures to produce electricity.

"You are not taking wilderness and converting it to industrial use," said Julie Jorgensen, a former vice president of NRG Energy Inc. in Minneapolis and one of the project's planners. "You are dealing with a site that needs cleanup, but can be used to employ 1,000 people in an area that has been economically depressed."

In December, the Iron Range Resources and Rehabilitation

Board committed $1.5 million to pay for an environmental impact study of the project. Excelsior Energy would need to raise the majority of the remaining funds from private entities.

In addition, there are efforts in the Minnesota Legislature to speed the approval and construction process for the plant.

Electricity from the plant would be sold to Minneapolis-based XCel Energy Inc., formerly known as Northern States Power Co. NSP is the biggest utility in Minnesota, but also serves 220,000 customers in western and northern Wisconsin.

Jorgensen stressed that Excelsior is pitching the new plant to help close a widening gap between supply and electricity in Minnesota -- not Wisconsin. But executives at XCel say that any power they agree to purchase from an independent power producer would also be made available to its Wisconsin customers.

Although XCel has not made any formal commitment to purchase power from Excelsior, the company has encouraged Excelsior to participate in a competitive bidding process the utility is using to beef up supplies by using independent power producers, spokesman Scott Wilensky said.

By Lee Bergquist and Lee Hawkins Jr.

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