Energy issues remain unsettled in Minnesota legislature

Over the next few days the Minnesota Legislature will likely try to merge two vastly different bills involving energy policy into an omnibus bill that will likely face heavy scrutiny from Gov. Mark Dayton.

Gone is a major priority of energy and environmental groups (including members of RE-AMP, which publishes Midwest Energy News) that would have raised Minnesota’s renewable energy standard to 40 percent by 2030.

Instead, the GOP-led House plan calls for a rollback of much of Minnesota’s bipartisan Next Generation Energy Act. The legislation is part of a jobs bill, unlike Senate legislation that mainly focuses on energy policy.

The House bill “is really unfortunate, short-sighted and a step backwards for Minnesota,” said Justin Fay, who led the Clean Energy & Jobs campaign to raise the renewable energy standard.

In an effort to get something done, the Sierra Club’s Michelle Rosier worries the Democratic-controlled Senate might accept some proposals in the House bill.

“The challenge with this session is because there are so many pieces in the air they are trying to negotiate across a broad spectrum of issues…that some of this could get passed,” she said.

On the other hand, the two different approaches to energy could lead to an unbridgeable chasm. So far reports say legislative leaders meeting at the governor’s mansion continue to struggle to reach an agreement.

And the deadline is Monday, unless the Legislature goes to a special session.

Led by House Job Growth and Energy Affordability Policy and Finance Chair Pat Garofalo, a Republican from Farmington, House bill 843 does the following:

  • Eliminates science-based goals for reducing carbon that have been in place since 2007.
  • Eliminates a moratorium on new nuclear power plants.
  • Sunsets in 2016 the Conservation Improvement Program that sets an annual savings goal of 1.5 percent of retail energy sales for investor owned utilities. A commission would be appointed — composed mainly of utilities — to develop a new program.
  • Requires a legislative vote on any proposal created by state agencies to meet the EPA’s Clean Power Plan targets. The legislation is part of a national movement to slow or kill the EPA’s program.
  • Transfers Xcel’s Renewable Energy Fund to the state and opens it to applications for projects located anywhere in Minnesota. The program is paid for by Xcel ratepayers and currently only operates in its territory.
  • Allows hydropower projects of more than 100 megawatts to be counted toward a utility’s RES. The move allows utilities such as Minnesota Power to use electricity purchased from Manitoba Hydro to count against its carbon offset goals.
  • Allows cooperatives and municipal power providers to add fixed charges — without limits — to the bills of customers generating solar energy.
  • Weakens the state goal of growing solar 1.5 percent a year and eliminates a measure requiring Minnesota to generate 10 percent of the state’s energy from solar by 2030.
  • Creates an “off ramp” allowing utilities extra time to meet their RES goals if they incur a cost impact of 2 percent or greater on retail rates due to renewable energy investments.

One other part of the legislation is called an “energy intensive trade exposed rate” that allows utilities under certain circumstances to offer lower energy rates to large industrial customers while increasing them on small businesses and residential customers.

The legislation is a reaction to a number of layoffs at large industrial plants in northern Minnesota, Rosier said. The House bill gives any utility the option to ask for the rate while the Senate bill gives it only to Minnesota Power, the utility serving that region.

Although no longer working on the issue the Minnesota AARP wrote a letter saying the strategy puts the burden on ratepayers.

“It’s a zero-sum game,” said state policy director Will Phillips. “If you give large industrial users a break someone has to make up the difference and residential customers will be left holding the bag.”

The Senate energy bill does not line up with the House on many issues. It creates an incentive plan for electric vehicles and creates a path for communities needing assistance with siting of large solar projects.

The bill makes modifications to the Guaranteed Energy Savings Program, to wind and solar repowering language, to the energy audit program and to rules involving solar permitting authority.

Rosier said it is possible that energy issues will not be much of a part of a larger agreement because the governor and the Senate have signaled they see little common ground.

“No energy legislation is an option,” she said.

One thought on “Energy issues remain unsettled in Minnesota legislature

  1. Just a point of clarification regarding electric vehicle incentives. Both bills have something, but they are pretty different. The House budget bill does include an incentive program for electric vehicles. It is a rebate program, funding by money now going to the Renewable Development Fund. The House bill also has some electric vehicle PUC related language, but it is quite different than the Senate language alluded to in the article.