Excelsior Energy, the Minneapolis company that has proposed building a power plant north of Taconite, Minn., said Wednesday that it has acquired a key parcel of land for the project.

The company purchased 240 acres for $190,000 in a court-supervised land sale in Itasca County. Court-appointed referee Andy Shaw, who supervised the sale, said a district judge must approve the transaction.

Tom Micheletti, CEO of Excelsior Energy, said the company isn't ready to build because it doesn't have a purchaser for the power. He said the land acquisition, along with options on adjacent property, gives the company control of the site.

He said Excelsior is talking to potential customers, hoping the retirement of older, coal-fired generators over the next few years will create a market for the project.

Known as the Mesaba Energy Project, it originally aimed to turn coal into gas and burn it for power, an innovative design developed with $40 million in state and federal funding. But that project is on the shelf, and the company now proposes to build one or two combined-cycle natural gas generators costing up to $1 billion.

The coal-gasification project had provoked opposition from a local group called Citizens Against the Mesaba Project. Charlotte Neigh, co-chair of the group, has a different view of the proposed natural gas project.

"If it comes down to building a natural gas plant to produce energy for which there is a demonstrable need, that takes away a whole lot of reasons for objecting to it," she said. "It is not the same six coal plants that nobody wants."

The land sale came under court jurisdiction because the tract's parcels had various owners. Shaw said one large property owner brought what is known as a partition action to settle disagreements over the fate of the land. A second, 80-acre parcel was sold to that property owner.

David Shaffer • 612-673-7090 • Twitter: @ShafferStrib