Excelsior Energy’sMesaba Energy Project

Update for the NM-SPG

August 16, 2006

Current Project Parameters

• Two 606MW IGCC units• ISDs 2011 and 2013• Primary Site- West Range

– POI---Blackberry 230kV Sub– Near Taconite, MN in Itasca County

• Alternate Site- East Range– POI---Forbes 230kV Sub– Near Hoyt Lake, MN in St. Louis County

• Designated as an Innovative Energy Project under special MN Legislation

MISO LGIP

Current Status

Transmission Progress to Date

– Transmission Concept Screening Study July 2003– East Range GO Analysis August 2004– East Range GI Request to MISO October 2004

• Queue # 38280-01, Project G477• First Unit 531/552MW ISD 2010• Network Resource Service

– G477 Feasibility Study Report March 2005• 6 months

– West Range GO Analysis May 2005– West Range GI Request May 2005

• Queue # 38491-01, Project G519• First Unit 600MW ISD 2010• Network Resource Service

Transmission Progress to Date

– G519 ‘Out of Queue’ Study Agreement August 2005– West & East Range Preliminary

GO Facilities Engineering Designs December 2005– West & East Range GO Analyses

Updates December 2005– G519 Feasibility Study Results December 2005

• 8 months

– G477 & 519 System Impact Study Results April 2006• 11 and 19 months

– G477 & 519 restudy of short circuit results July 2006– Second unit GI request submitted January 2006

• Designated G597

Transmission Progress to Date

– G597 Feasibility Study Report July 2006– G477&519 Facilities Studies underway July 2006

• MP has contracted to perform

– G597 SIS Agreement Executed August 2006

Note: Between July 2004 and December 2005 Excelsior performed six series of powerflow studies to evaluate GO facilities and network reinforcements

MISO Study Results

• Project G477 SIS (Forbes POI)

– Powerflow : No problems identified – Short Circuit : Several pre-existing over-dutied

breakers but no new ones caused by G477– Stability : All simulations are stable and within

damping criteria. No transient low voltage violations.– Deliverability Analysis: Failed

• Awaiting MISO study proposal to continue NRIS process• TSR submitted by Xcel for NITS (local capacity resource)

MISO Study Results• Project G519 SIS (Blackberry POI)

– Powerflow : Some issues identified during contingencies. Resolved with the addition of a new Boswell-Riverton 230kV line.

– Short Circuit : Several pre-existing over-dutied breakers delete [plus four new 115kV breakers at Nashwauk Sub due to G519]

– Stability : All simulations are stable and within damping criteria. No transient low voltage violations.

• New Boswell-Riverton 230kV line was included in these studies.

– Deliverability Analysis: Failed• Awaiting MISO study proposal to continue NRIS process• TSR submitted by Xcel for NITS (local capacity resource

MISO Study Results

• Project G597 Feasibilty Study (Blackberry POI)– Powerflow: numerous local contingency

violations identified• Not unexpected with both MEP II and new 800MW NE MN

unit included without any network upgrades

– Short Circuit: four Nashwauk 115kV breakers overdutied

Note: Modeling didn’t include proposed Minnesota Steel Plant or CAPX 2020 Projects

Other Mesaba Energy Project Progress

• Filing made 12/23/05 with MPUC for a PPA with Xcel Energy– under Innovative Energy Project Legislation

• Joint Siting/Routing Application made 6/16/06 for both units, all GO facilities, and gas pipeline.– Application accepted as complete 7/6/06.

Proposed GO Facilities

• G519: 9 mile double circuit 345kV steel pole structures, operated 230kV for MEP I

• G477: Two 345/115kV steel pole lines replacing existing 115kV structures for most of their 34 and 37 mile routings, with 345kV side operated 230kV for MEP I

West Range GO Facilities

West Range GO Routings

East Range GO Facilities

East Range GO Routings

Questions??