By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
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Developer Michael Krause has long dreamed of a wood-fueled power plant at the edge of Minneapolis's East Phillips neighborhood, and he has no shortage of supporters. The City Council unanimously endorsed his Midtown Eco Energy facility three times. Krause and his business partners are closing in on $78 million in bonds administered by the city's Empowerment Zone office. Several surrounding neighborhood groups have given the project their blessing. And the Minnesota Pollution Control Agency has drafted, albeit not yet granted, an air emissions permit.
Enthusiasm for the plant, which would replace the small-scale garbage transfer station near Lake Street and Hiawatha Avenue as soon as 2009, extends to the mayor's office. R.T. Rybak is "a huge proponent of the facility," says mayoral spokesman Jeremy Hanson.
But questions loom about the power plant's economic viability and whether it's really as eco-friendly as Krause and his backers claim. In addition to more than $80 million in startup costs, the facility requires lots of wood to burn and a power company to buy the electricity it produces. And critics contend the plant would also rain down as much as a million pounds of pollutants—from carbon monoxide to lead—each year.
Krause has been working for years on the proposed power plant, which would burn wood to fuel a steam-propelled turbine. His quest began when he was the director of the Green Institute, a Phillips-based nonprofit that in 2003 won a $1.9 million energy department grant to study the project's feasibility. Krause left the institute in 2005 and founded Kandiyohi Development Partners, a development company. Last year, when the Green Institute deemed the project too risky and abandoned it, Krause swooped in and picked up the rights for $75,000.
Among Krause's business partners is Kim Havey, the former head of the city's Empowerment Zone office. Krause is also friends with council member Lisa Goodman; the two own property together in Kandiyohi County. Krause and Havey say the burner will be a boon to the city, saving 120,000 to 140,000 tons of greenhouse gas emissions annually when compared with coal, creating upward of 20 jobs, and providing electricity for 15,000 homes. In addition, the steam created as a byproduct of the electricity generation would be used to heat two nearby facilities, Abbott Northwestern Hospital and Midtown Exchange, which currently use natural gas and fuel oil, with the potential for more businesses to sign up.
But not everyone shares their enthusiasm. Phillips community activist Lynne Mayo hasn't yet studied the particulars, but she doesn't like what she's heard so far. Four years ago, Mayo helped remove 16 inches of poisoned soil from a community garden a few blocks from the plant. She has little desire to do so again. "If it's going to be dumping one million pounds of toxins, how could I support that?" she says.
Alan Muller, an anti-burner advocate based in Delaware who is helping to organize resistance here, says the plant would emit not only the laundry list of hazardous chemicals spelled out in the request for an MPCA permit—everything from benzene to formaldehyde to sulfur dioxide—but also as-yet unregulated pollutants, commonly called nanoparticles for their small size, which recent studies have linked to heart disease and cancer. "You can't rely on air pollution regulatory policy to protect you," he says.
The Green Institute abandoned the project largely because of worries about the supply of wood, says Carl Nelson, the institute's director of community energy. Competition for wood is fierce, both for use as a fuel source and as mulch. Wood supplies also fluctuate. A big storm will produce an excess of available wood from downed trees, and a hot housing market in the suburbs means lots of trees and brush cleared to make way for new homes. However, says Nelson, "During the lean years, where are you going to get it from? We might have been secure in getting fuel for the next five years. But the further out you go, the more challenging it becomes."
Kandiyohi brushes aside these concerns, saying that a study it commissioned shows that there is more than enough wood in the Twin Cities to go around.
To be viable, the plant also needs a buyer for the electricity it will generate. As of yet, no such deals have been struck. Kandiyohi says it's been in talks with Xcel Energy—which by law needs to get a portion of its energy from renewable sources—since early this year. But according to Xcel spokesman Patti Nystuen, "There is currently no power purchase agreement between Xcel Energy and Kandiyohi Development, and no active negotiations to pursue such an agreement."
If the plant never gets built, that would be just fine with Julie Andrus. The Prospect Park resident worries about the impact its emissions might have on her 14-year-old daughter. "I just think how sad it would be if the Twin Cities ends up with such bad air that we fear for our children going out and playing soccer."