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Tuesday Talk: Q and A on Energy Legislation

June 18, 2013 By Joe Sheeran, Communications Director

While recently enacted renewable energy legislation didn’t go as far as some progressives would have hoped, many of its provisions did move Minnesota closer to a greener energy portfolio. Since the 2013 Omnibus Energy Act contains a number of new and intricate details, we’ve invited Will Nissen (Fresh Energy Policy Associate and Minnesota 2020 Fellow) to answer your questions about the new energy laws and what’s next on Minnesota’s energy horizon. He’ll be involved with the discussion from 8-9 this morning.

Here are some highlights of the bill:

  • Calls for a feasibility study to examine raising renewable energy standards beyond the current 25 percent by 2025, which could put MN on a solid path to generate 40 percent of energy from renewable sources by 2030.
  • Establishes a 1.5% by 2020 Solar Electricity Standard for investor-owned utilities in Minnesota, the Midwest’s strongest solar standard.(Cooperative and municipal utilities are exempt.)
  • Opens the door for more industrial and community run solar arrays by raising net metering capacity from 40 kilowatts to 1,000 kilowatts.

What do you think of the new energy legislation?

We had a great discussion this morning. More questions? Post them! Will will check back throughout the day.

Thanks for participating! Commenting on this conversation is now closed.

31 Comments:

  • Amelia Kroeger says:

    June 18, 2013 at 6:35 am

    I applaud the work of Fresh Energy, and numerous other organizations addressing global warming = climate change. Although far from what I think is necessary, the recent legislation in MN is yet another step in the right direction. My gratitude for all past, current, and future efforts to move us forward toward renewable energy alternatives.

    • Will Nissen says:

      June 18, 2013 at 8:10 am

      Thanks Amelia! None of the progress made this session would have been possible without the efforts of many people and organizations, including Minnesota 2020 and member groups of the Minnesota Clean Energy and Jobs Campaign.

  • Joe says:

    June 18, 2013 at 8:02 am

    Will, the solar advancements are a great step forward. But some in the environmental community set out on a much more ambitions green energy agenda. What pieces of legislation will we see in future years?

    • Will Nissen says:

      June 18, 2013 at 8:07 am

      Third-party financing/leasing for solar projects in Minnesota is a critical policy for driving down the cost of solar and saving customers money on day one. We also need to align utility incentives with investing in energy efficiency by removing utilities’ strong financial incentive to sell more energy. There may be several avenues to accomplish these policies, so stay tuned.

      • Arne says:

        June 18, 2013 at 8:39 am

        Can you say more about alternatives to volumetric tariffs?

        • Will Nissen says:

          June 18, 2013 at 8:46 am

          That’s a tough nut to crack. Utilities have fixed costs(the infrastructure like poles, transformers, and power lines) and variable costs(fuel for the power plants) for delivering your energy. Currently customers are, more or less, charged based on how much energy they use to cover those utility costs. Some argue a switch to more fixed charges on the utility bill, but that has perverse effects on low-income customers and decreases customers’ incentives to save energy. Time-of-use rates have been used in other states, in which customers are still charged based on how much energy they use, but the rate varies depending on when the energy is used throughout the day. For example, it costs utilities more to generate electricity in the afternoon on a hot summer day than it does at 2am when few people are using lots of electricity.

          • Will Nissen says:

            June 18, 2013 at 8:50 am

            One gas utility in Minnesota also experimented with what are called inverted block rates, in which the customer is still charged a rate based on how much energy they use, but that rate increased as the customer used more. This was meant to encourage customers to decrease their energy use, but had unintended side effects and is no longer used.

  • Will Nissen says:

    June 18, 2013 at 8:03 am

    Good morning! We had quite the legislative session this year when it comes to energy policy in Minnesota. What do you think? What are some next steps forward in crafting Minnesota’s energy policy?

  • Will Nissen says:

    June 18, 2013 at 8:20 am

    One piece of the energy bill this year that’s getting some buzz is community solar gardens. Through this mechanism, people and businesses can group together to invest in an off-site solar project and get credit on their utility bill for the electricity it produces. So you don’t even need to own a roof to get solar. Would you participate in a program like this?

  • Sue B says:

    June 18, 2013 at 8:21 am

    I think it’ a good first step in the right direction, but I would like to see things move forward faster.  Instead of spending more time on “feasbility” studies, lets just do it!  Almost anything is “feasible” if you have the will to accomplish something, and are willing to make the commitment to do everything it takes to make it happen.  When President Kennedy declared in 1960 that we would reach the moon within a decade, it didn’t sound “feasible”, but it happened because it became a high priority.  The same can happen with the switch from fossil fuels to renewables if we want it to happen.  Germany is far ahead of us in solar with their “100,000 Roofs” program, even though they are less sunny than us.  Enough so, that after the Fukushima disaster, they declared by 2020 they would be able to close their nuclear plants.  Why can’t we move forward now with wind, solar, biofuels, and every other renewable source before our planet is destroyed.  Yes, it’s expensive, but doing too little costs more in the long run.  Climate experts believe that our severe weather is one glaring result of climate change.

    • Will Nissen says:

      June 18, 2013 at 8:28 am

      You bring up a great point Sue. Yes, transitioning our energy sector away from fossil fuels has costs. But the cost of the status quo is becoming increasingly more expensive. We have the technical capabilities to generate significantly more our or energy from non-fossil and nuclear fuel sources, but there are social and political levers that need to be pulled to make that happen. Making sure your legislators hear you, and your cooperative or municipal utility if that is your provider, is critically important.

  • Sam Villella says:

    June 18, 2013 at 8:46 am

    It is an important first step, even though it is watered down a bit.  The exclusion of the munis & coops is a great disappointment.  I think the feasibility study was a nice add on.  As a solar PV homeowner, I am most intrigued by the value of solar component and its future effect on net metering.  It’s successful implementation seems important but may well hinge on the utilities.

    • Will Nissen says:

      June 18, 2013 at 8:55 am

      Glad you brought this up Sam. Minnesota is the first state to develop a value of solar rate, in which all the costs and benefits solar brings to the grid are incorporated into the price utilities pay for solar electricity fed to the grid (Austin, TX and San Antonio, TX have developed value of solar rates). This is a critical step because current policies and electricity rates don’t account for these costs and benefits. The MN Department of Commerce will develop a methodology by January 31, 2014 to determine the value of solar rate, and utilities will calculate their rate using that methodology. So you’re right, Sam, this will hinge on utilities. But the Public Utilities Commission has to approve the rate utilities develop, so there is opportunity for public comment and stakeholder participation in this process.

    • Will Nissen says:

      June 18, 2013 at 8:58 am

      Unfortunately, municipal and cooperative utility customers will not have access to the solar policies passed this session (like community solar gardens, the value of solar rate, and the increased net metering capacity). Coops and munis fought against those provisions hard during session, so if you’re a cooperative or municipal utility customer and you want access to these policies let your board members know.

  • Will Nissen says:

    June 18, 2013 at 9:04 am

    Thanks for participating everyone! I’ll be checking in throughout the day, so feel free to keep posting questions and comments.

  • Darwin Dyce says:

    June 18, 2013 at 9:10 am

    Indeed movement towards clean and sustainable energy is critical. Legislation is needed to encourage individuals and business to do so. At the same time the fossil fuel/fool industry has so much of the public ear. Any awareness that organizations and individuals can do about the very real dangers of fracking for gas or oil is critical. Such dialoge combined with investment in clean sustainalbe energy on personal and policy is so very much needed. Thanks for having a piece of that discussion.

  • Paul Conklin says:

    June 18, 2013 at 9:15 am

    One thing we need to be careful of is “one size fits all” mandates.  As we diversify energy sources, not all are appropriate for all utilities.  Solar is great for summer day time A/C driven peak loads.  It is not much help for electric utilities that with a winter night time heating peak load.

    We need much more research and development incentives for alternative energy storage, load management and smart grids that can get energy from where it is made to where it is needed.  (Note that this requires powerlines. It is interesting that many who are pushing alternative energy are protesting the power lines needed to move that energy where it is needed.)

    • Will Nissen says:

      June 18, 2013 at 11:02 am

      I agree that solar won’t power our entire grid (without complementary battery storage at least, which is years away). But 1.5 percent solar, while it does increase our current solar market by more than 30 fold, is not a significant amount of generation. I see it as diversifying our energy portfolio. Also, cooperative and municipal electric utilities are exempt for the standard, so not every utility in Minnesota is being asked to comply. Regarding transmission lines, we can’t effectively incorporate renewables at larger scales without changing how we move electricity around the state, region and country.

  • Greg Kapphahn says:

    June 18, 2013 at 9:34 am

    I am especially interested in the idea of community-run solar arrays.  I live in housing which, due to trees which provide very useful shade, would be useless for solar arrays on the roof.  The idea that interested folk could combine their efforts to invest in a solar array (or more than one) which could be located in an ideal place allows people such as me to invest in solar when we have no good place to install it.  In my local community, there are many factories, stores, apartment buildings, churches, etc., whose roofs would be ideal for such installations which would be quite invisible and would not change the beauty of our local natural surroundings in the least.

    • Will Nissen says:

      June 18, 2013 at 11:18 am

      That’s great Greg, that is exactly the intention of the policy.

  • Donald Schultz says:

    June 18, 2013 at 9:43 am

    The greatest renewable “source” of energy are the energy twins:  greater energy efficiency and consumer conservation.  Did the legislature come up with any incentives to encourage the energy twins?

    • Will Nissen says:

      June 18, 2013 at 10:45 am

      Part of the omnibus energy bill included stronger policy regarding energy efficiency. Minnesota’s stated energy policy now considers energy efficiency as the least-cost energy resource preferred above all other resources (such as coal, nuclear, natural gas, wind, solar, etc.). This will be critical in utility resource planning at the Public Utilities Commission as utilities and regulators prepare increases in energy demand. But Fresh Energy and allies introduced legislation to align utility incentives with energy efficiency, which currently have a strong financial incentive to sell more and more energy. This will open the door for utilities to embrace and champion energy efficiency and conservation. We will be pushing that bill (Senate File 1628) next year, so keep an eye out for that.

      • Will Nissen says:

        June 18, 2013 at 11:04 am

        Note, above it should be “as utilities and regulators prepare for increases in energy demand.”

  • Frank H. says:

    June 18, 2013 at 9:50 am

    While I too think that more could/should be done, both legislatively & with financial incentives directed at individual/household consumers, I applaud these latest attempts to direct our state to a greener, more sustainable energy future.

  • Kipling Thacker says:

    June 18, 2013 at 10:25 am

    The solar energy mandate was not well thought out.  If the objective is to support an in favor industry with a subsidy, it was successful.  If the goal was to produce efficient renewable energy it was a waste on the scale of ethanol production.  The unsubsidized paybacks on these systems is decades and that reflects the cost of production (of which energy is a component) and the low efficiency.  If one is concerned about renewable energy the focus should be on efficiency of utilization first and wind energy second. Other than small demonstration projects to advance the technology, solar should not be subsidized.

    • Will Nissen says:

      June 18, 2013 at 10:56 am

      Solar prices have plummeted significantly in recent years, with installation prices decreasing nearly 25% in the U.S. last year alone, and are expected to continue falling. Yes, solar is still more expensive than other generation sources, but it does provide electricity at peak hours (afternoons) when it is most costly to ramp up other generation sources. Solar in Minnesota is predicted by some to reach “grid parity” in the next 5 or so years (grid parity is a generation source can produce electricity at a price equal to or less than purchasing power on the market). This is the point when solar won’t need subsidies and incentives to compete (the incentives passed this year can be altered or terminated annually by the Department of Commerce). The 1.5 percent standard is intended to jump start our tiny Minnesota solar market so we are ready to fully capitalize on this rapidly growing market down the road.

  • Mike Downing says:

    June 18, 2013 at 11:53 am

    The previous renewable legislation as well as the 2013 energy bill is a highly regressive tax on the poor and the lower middle class. The cost of wind energy is 3X that of coal and nuclear and solar is 4X that of coal and nuclear. Why do the liberal progressives not care about the cost of electricity for the poor and middle class?!

    I’ve been told by by liberal progressives “but the wind and the sun are free”!

    • tony says:

      June 18, 2013 at 12:50 pm

      When we consider the cost of an energy source, we should be also considering the health and environmental effects. The health costs from increased respiratory ailments, birth defects, storage issues for the nuclear waste, the ash from coal fired plants, etc. When you add in these multipliers in you find that in parts of western U.S. the cost of solar is the same or less already. Cars used to be considered a higher cost mode of transportation due to their unreliability, etc., but who would take a horse to work now? In Germany, where I have family, the solar use on resident homes is so successful, they are now asking homeowners to cut back on adding new units as they are now producing more “extra” electricity than the utilities can use.

    • Will Nissen says:

      June 18, 2013 at 1:12 pm

      Obviously the fact that the wind and sun are free fuel sources doesn’t mean wind and solar energy is free. But not having fluctuating fuel costs for the lifetime of a generation source is important. Wind farms or solar project have almost no variable costs after installation. This provides certainty to utilities, developers, and regulators when planning financial costs and paybacks for these resources. Actually, through required annual reporting on the impact of Minnesota’s Renewable Energy Standard, many utilities have reported little to no impact on rates from having wind on the energy grid. And, Xcel Energy currently has a bid out for 200 Megawatts of new peaking generation. They initially thought this would come from natural gas, but a Minnesota company has made a competitive bid for 100 Megawatts (because solar can provide competitively priced electricity at peak hours) at the location Xcel needs. There is a public docket at the Public Utilities Commission looking at the bid (Docket 12-1240)

      • Will Nissen says:

        June 18, 2013 at 1:24 pm

        Sorry, a Minnesota company made a competitive bid for a 100 Megawatt solar farm at the location Xcel needs.

    • Dan Conner says:

      July 25, 2013 at 1:38 pm

      Since there is so much concern about the economic effects on the poor and middle-class of higher priced, but clean green energy, then subsidizing its cost based on income seems appropriate.  Increase it’s cost on the rich to pay for its use for the poor.  Then, all should have equal access to green energy.  Otherwise, is it possible that the concerns of some about the cost of energy on lower earning people is hypocritical?  Where there is a will there is a way.