Excelsior Energy, the Minneapolis-based company that never delivered on its promise to produce electricity with clean-coal technology, is getting government help to clean up its debts.
A development agency for the Iron Range, where the company's ill-fated coal-gasification project was to be located, on Monday approved the outline of a deal that will allow the company to skip further payments on $9.5 million in state loans dating back to 2002.
The Mesaba Energy Project, which was to have been built by 2011, never got off the ground as the recession cut electrical demand, no utility wanted the power and the fracking boom cut the price of natural gas, leaving clean-coal projects unable to compete.
"We don't have unlimited resources," said Excelsior CEO Tom Micheletti in an interview Monday.
The company has made three annual $100,000 payments since 2010 on the two loans from the Iron Range Resources and Rehabilitation Board (IRRRB), a state development agency funded by taconite industry taxes.
On Monday, the board authorized IRRRB Commissioner Tony Sertich to renegotiate the debt terms, giving the company until the end of 2019 to develop the project or the development agency will take it over. The company still would get 25 percent of the proceeds if the agency found a buyer for the project after that — a condition that two board members questioned.
"I have never heard of anyone getting 25 percent back on a repossessed house or a repossessed business," said Rep. David Dill, DFL-Crane Lake.
Excelsior has said it would consider developing a natural gas-fired power plant at its site north of Taconite, Minn. But the company didn't join the competitive bidding to build such a plant for Xcel Energy, the state's largest power company.