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Governor Dayton Must Step Up to Protect Energy Consumers

, policy analyst, Clean Energy | February 22, 2017, 4:43 pm EST
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Two bills are making their way through the Minnesota legislature that would hack away at the Minnesota Public Utilities Commission’s (MPUC) authority to protect consumers. Given the unnerving level of bipartisan support these bills are receiving in the legislature, it’s time for Governor Dayton to step up and protect consumers, as well as Minnesota’s long legacy of clean energy achievements.

Setting a dangerous precedent in Minnesota’s oversight of utility monopolies

Perhaps the most dangerous bill in the bunch (HF113/SF85) would legislatively approve Xcel’s proposed natural gas plant to replace two retiring units at the Sherco coal-fired power plant in Becker, Minnesota. The bill would strip the Minnesota Public Utilities Commission’s (MPUC) traditional role of reviewing plans to ensure investments are in the best interest of consumers.

While Xcel included the proposed natural gas plant in its latest integrated resource plan, the MPUC declined to approve it, expressing concern that other alternatives might be more beneficial to ratepayers over the long term. Significant doubt remains whether the investment makes sense, but that debate will be silenced if this bill becomes law. The House voted to pass the bill on February 9, and last week the Senate voted to pass a similar bill as well.

The House will now take up the bill to reach a compromise. Governor Dayton has signaled his support for the bill despite the risks to ratepayers, but he should reconsider.

Despite the Governor’s good intentions to help protect the local Becker economy,  this bill sets a dangerous precedent for future utility investment decisions. What happens next time the MPUC declines to approve a proposed billion dollar (or more) investment by Xcel? Do they come back to the legislature for another blank check? Protecting ratepayers from paying for bad investments is a core function of the MPUC. If this bill becomes law, Minnesota ratepayers face an uncertain and potentially costly energy future.

Closing the door on rural ratepayers

Another legislative proposal, HF234/SF141, would remove the MPUC’s authority to resolve disputes between Minnesota’s rural electricity cooperative utilities and their members. The weak rationale for this proposal suggests that somehow cooperative members don’t need this dispute resolution venue because they have local control over their utilities.

In reality, disputes do occur between electric cooperatives and their members, and without an objective arbitrator to resolve them, the co-op holds all the cards. This bill is particularly directed at disputes that have arisen over the exorbitant fees that cooperatives are charging members to connect solar PV systems to the grid.

These fees are an attempt by cooperative managers to maintain the status quo and only serve to slow Minnesota’s transition to cleaner, lower-risk energy sources. Maintaining the MPUC’s role as arbitrator of these disputes provides protections for cooperative ratepayers as well as Minnesota as a whole.

Commission’s role

The MPUC’s role is to protect and promote the public’s best interest in safe, adequate, and reliable utility service at fair and reasonable rates. This is done by providing much needed independent and comprehensive oversight and regulation of utilities. Unfortunately, these bills seek to erode the MPUC’s mission, and authority.

Governor Dayton can’t have it both ways. He must stand by his word not to accept any bill that limits or weakens the Commission’s authority to protect the interests of Minnesota’s energy consumers.

Creative Commons/Mulad (Flickr)

Posted in: Energy

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  • Jason Fredensborg

    The bill going through the legislature does not stop the MnPUC from having authority over Xcel for cost recovory. It simply allows Xcel to begin construction of the plant and associated inferstructure. Thousands pages of documentation were submitted to the PUC that showed a need for additional generation coenciding with the retirement of the second coal unit (2026). It also detailed how it is the most cost effective type, and placement of the proposed 2×1 combined cycle unit. An opinion which the department of commerce agreed with.
    The company is also bringing on over 1000MW of new wind generation over the next few years. As the grid loses coal base load units and becomes more and more saturated with wind and solar, new gas plants will be required at strategic locations to ensure capacity, and system reliability.
    This is not a “blank check”, it is simply allowing the company to begin building a new plant that they have already shown is in the public best interest. If Xcel wants to be able to get some of that money back, they will continue to do all due dillegence.

    • J-dawg

      The point is that Xcel has NOT shown that building the gas plant is in the public’s best interest. That was the whole point of the PUC saying, “We’re not approving this until you show us it’s really in the public’s best interest.”
      The PUC knows how electricity supply and reliability work, btw.