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Project Rationale

The Minnesota Legislature enacted the Innovative Energy Project ("IEP") Statute and the Clean Energy Technology ("CET") Statute in 2003 with the aim of providing the State with a path forward to resolve critical energy issues.  Certain market conditions that prompted the Legislature to proactively foster the construction of IGCC facilities in Northeastern Minnesota included:

  • Rising natural gas prices and proposals to significantly increase reliance on gas-based generation
  • The average price for natural gas had risen to the level of $4.54 to $5.25 per thousand cubic feet
  • No new base load facilities were on the drawing board in the State of Minnesota
  • Concerns over exported jobs and imported pollution from high emission, out-of-state conventional coal plants
  • Air emission limits appeared likely to tighten which could force older, less efficient power plants to shut down
  • Deteriorating economic conditions in Northeastern Minnesotathe Iron Range had lost an additional 2,000 jobs with the closure of LTV Mining, bringing the total to more than 10,000 in the then-preceding decade

Given these concerns, the benefits that IGCC generation facilities on the Iron Range could deliver to the State were clear.

"The Mesaba Project, and the many IGCC plants that will follow its lead, will put Americans to work, protect our natural environment, reduce pressure on natural gas resources and further our Nation's energy independence and national security goals."

U.S. Senator Norn Coleman

Since passage of the legislation, the market conditions that were the foundation for the enactment of the Statutes have only become more pronounced, underscoring the importance of the Project to a balanced, hedged energy portfolio for Minnesota.