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Bill outlines Iron Range power plant

Associated Press

ST. PAUL -- A bill introduced at the Legislature would set up a special tax-free zone for a massive new power plant on the Iron Range.

The measure would help Excelsior Energy build a 750-megawatt plant in Hoyt Lakes at the site of the closed LTV mine. Introduced in both chambers, it will probably have an initial hearing in the Senate in the next few days.

The bill, sponsored by Sen. David Tomassoni, a Democrat from Chisholm, would require the state commerce commissioner to designate energy generation enterprise zones. The zones would be located in "economically depressed" areas, and the bill would designate the size, location and type of technology a plant in such a zone could use.

The project would address a growing demand for electricity in the Midwest while bringing as many as 1,000 jobs to the Iron Range, Tomassoni said. "There is no doubt that Minnesota is going to need a new power line, if not several new power lines," he said.

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Rep. Michael Beard, a Republican from Shakopee, is carrying the bill in the House.

The Excelsior plant would generate electricity using a coal-gasification technology that produces less air pollution than straight coal-burning power plants. The company is also hopeful the U.S. Energy Department will provide project funding, said Thomas Micheletti, a principal investor with Excelsior.

The bill would provide Excelsior with sales and income tax exemptions and an accelerated property depreciation schedule. It would also provide regulatory incentives, including a requirement that the state Public Utilities Commission issue a certificate of need for the plant.

Last year, Tomassoni carried legislation for Excelsior that would have changed the criteria the utilities commission uses to approve contracts between power producers and retail power providers. That measure was defeated by critics who said it would have set up a ready-made market for Excelsior, putting the company at an unfair advantage over other regional competitors.

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