Biomass Feasibility Project Final Report - Xcel Energy

community a sounding board for their concerns with issues like noise, odors and truck traffic
(Fibrominn, n.d.).
Northome Biomass Plant (Itasca Power)
Concerned about the long delays in the Fibrominn project, Xcel Energy, the legislature, and the
PUC began to worry that projects to meet the mandate might be completed late, or not at all.
They designed an emergency process to use in the event that attempts to meet the mandate
failed. The delays also brought a number of developers to offer their projects to the PUC and
the legislature as solutions to Xcel Energy’s difficulties. One interesting offer came from
Minnesota Power, which offered to sell biomass power to Xcel Energy from their existing biomass
boilers (Minnesota Power, 2003). Xcel Energy rejected that offer, but the political efforts of one
project developer were more difficult to ignore.
In May of 1999 Itasca Power Company and Great River Energy entered in to an agreement
under which GRE would purchase the output of a proposed Northome Biomass plant, and GRE
would build a transmission line to connect the project to the regional grid ("Great River Energy",
1999). The Northome plant was to be a small (15 MW) facility, fired with waste wood from
nearby wood products mills. In addition to generating electricity, the facility would provide
steam to nearby industrial customers (IPC, 2005).
Despite their agreement with Great River Energy, Itasca Power lobbied the legislature to make
Xcel Energy enter into a PPA with Itasca Power in 2001 “on an equal basis” with other projects
Xcel Energy was working with to meet the mandate. Over the course of the following five years,
Xcel Energy and Itasca Power engaged in a series of negotiations and regulatory proceedings
but never were able to arrive at a mutually agreeable PPA. Itasca Power’s continual efforts to
convince both the state legislature and the PUC to force Xcel Energy to sign a PPA with them
were no more successful. A press release from December of 2005 on Itasca Power’s website
announced the cancellation of the project IPC, 2005). The final mention of Itasca Power in the
PUC’s regulatory record comes in a Progress Report to the PUC in the first quarter of 2006 in
which Xcel Energy mentions that Itasca Power indicated that the price of any PPA would “have
to be substantially higher than previously discussed, primarily due to a shortage in the area of
wood residue fuel” (emphasis added). (Xcel Energy, 2006).
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Identifying Effective Biomass Strategies:
Quantifying Minnesota’s Resources and Evaluating Future Opportunities