Minnesota state senators from the Energy and Utilities Finance and Policy Committee (EUFPC) came to the Westonka Performing Arts Center Jan. 22 to hold a hearing on preliminary Clean Energy First legislation.
“It is not perfect. It can be argued about, it can be criticized, but it is a step and it’s an important step,” said the bill’s author, Sen. David Senjem (R-Rochester). Senjem indicated he was optimistic a finalized bill would be signed into law by the end of the legislative session in May.
The draft legislation has already received support from both sides of the aisle and from business and labor groups for its provisions on creating jobs within the state and mitigating job loss for host communities as roughly half of Minnesota’s coal power plants are either retired or see their permits expire over the next 15 years.
The bill also received tepid support from environmental groups for its clear preference for carbon-free and renewable energy in new resource plans; but these groups also said the current bill is too restrictive in its limitations to Minnesota resources and too broad in other areas, creating what one senator termed “loopholes.”
DFL Gov. Tim Walz introduced his own clean energy vision last spring, but that plan failed to get past the Republican-controlled Senate.
Senjem’s bill includes provisions from that legislation, including the clear preference for carbon-free and renewable energy in new energy resource plans and a flexible list of which resources constitute clean energy.
Notably absent from Senjem’s bill, however, is Walz’s big ticket item – there is no mandate in the current draft for a 100 percent carbon-free energy standard by 2050.
“The bill we’ve tried to put together is a focus of what is reasonable, what is pragmatic and what is responsible,” said Sen. David Osmek (R-Mound), chairman of the EUFPC. “It is a fact that the technology to have 100 percent carbon-free by 2050 does not exist at this time – it does not exist. This bill moves us in the right direction.”
Included in the draft is an extensive menu of options for what constitutes clean energy. Not limited to solar and wind, the bill lists nuclear, carbon capture, carbon sequestration and mixed municipal solid waste as clean energy sources. In a strong push for keeping nuclear on the table, passage of the bill would also immediately lift the state’s moratorium on building new nuclear power plants, a ban that has been in place for 25 years.
“What’s going to drive this [clean energy future] is technology, and we can’t even see what some of the technologies are going to be,” said Sen. Jason Rarick (R-Brook Park).
Rarick said the bill’s flexibility around resource options, combined with provisions that allow utilities to recoup certain costs incurred in transition, could be incentive for companies to innovate green solutions to existing barriers facing that 100 percent clean energy future: carbon storage, how to recycle solar panels and how to source long-term the copper, steel and aluminum needed for wind generators.
The draft bill attempts to assuage the economic impact of transition by requiring that utilities consider local job impacts and “maximize employment of local workers” in new generation construction.
“We’re already seeing the cost of failure to plan sufficiently for the transition that’s already happening,” said Kevin Pranis, representative of the Minnesota and North Dakota chapter of LIUNA, a labor union. “Minnesota lost out on job and economic development opportunities when we didn’t have a plan to put local workers first in the clean energy build-up.”
Both Pranis and Sen. Andrew Mathews, who represents Becker, Minn., indicated their support for the bill. Becker is home to the Sherco power plant whose three units are scheduled for retirement beginning in 2023.
Much of the discussion at the PAC centered on the question of affordability and how to define “affordable,” a muddy issue according to Carlon Fontaine, senate counsel. The current draft, instead of stipulating affordability per se, sets a “just and reasonable” standard for customer rates.
That debate around rates and grid reliability drives in part a clause included in the draft bill that would still allow for nonrenewable facilities to be built or restored.
According to the draft, utilities may still apply for permits to build non-renewable facilities if they can demonstrate to the Public Utilities Commission that a carbon-free resource is not in the public interest, whether because customer rates would experience “unreasonable” increases or electrical reliability would substantially decrease.
“There’s no perfect solution for every question that’s out there of course, but I think if we’re going to move something forward we just need to be aware of this affordability and reliability piece and making sure that we’re not throwing out good things in search of something perfect,” said Sen. Erik Simonson (DFL-Duluth).
But Sen. Scott Dibble (DFL-Minneapolis) said the bill as it currently stands includes too many “exceptions,” “caveats” and “opt-outs” that run counter to what the legislation was drafted to do.
“I sincerely believe this actually moves us backward from where we are today and allows for more carbon to be emitted into our atmosphere,” said Dibble, who noted that the draft legislation specifies only “new” energy needs.
The bill’s restriction to Minnesota resources in the consideration of clean energy alternatives was another point of contention. Kara Josephson of the Minnesota Center for Environmental Advocacy termed that restriction “unnecessary” and an “incentive” for utilities to acquire dirtier energy from out of state. Still, Josephson hailed the draft legislation as one of the few bipartisan bills in the country.
Proponents of the bill repeatedly referred to the Clean Energy First draft as “an important step” and the goal of a clean energy future as a “journey” that will have to be continually revised as technology advances.
“This is a journey, this a process,” said Senjem. “We’re working on it.”