Minnesota’s Carbon-Free Electricity Bill Clears Initial Hurdle

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by | Jan 20, 2023

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Minnesota’s transition to clean electricity cleared its first hurdle at the state Capitol on Wednesday. If the bill makes it into law, all electricity generated by the state’s utilities would have to be carbon-free by 2040.

Support for the Legislation 

At Wednesday’s hearing, clean energy advocates and unions expressed their support for the bill, which they believe will reduce Minnesota’s dependence on fossil fuels while also promoting an increase in clean energy employment opportunities. Jamie Long, House Majority Leader and author of the legislation, told the House climate and energy committee that Minnesota is falling behind other states when it comes to clean energy and is not on track to meet its greenhouse gas reduction goals.

“We have an incredible opportunity now to regain our clean energy leadership,” said Long. “Minnesota doesn’t have any fossil fuels. So we send $13 billion out of state each year to buy energy. That’s 4% of our state GDP that could create jobs right here in Minnesota.”

A large number of clean energy advocates and labor union representatives testified in support of the bill, arguing that utilities should speed up their transition to emissions-free sources of electricity. “Climate science demands this,” said Michael Noble, executive director of the nonprofit advocacy group Fresh Energy. He said the cost of solar, wind, and energy storage have all declined dramatically in recent years, and the recently passed Inflation Reduction Act includes federal tax credits for renewable energy, “so this is a great time to accelerate our efforts.”

Opposition 

Several rural electric cooperatives as well as Republican legislators have expressed concern that meeting the mandate could make it difficult to provide reliable and affordable electricity to rural areas.

Brian Cook, director of energy policy for the Minnesota Chamber of Commerce, said it will be costly for utilities to meet the deadline, and Minnesota already is facing rapidly rising electricity prices. “The costs will be passed through to customers on their utility bills — customers already facing cost increases that outpace the rest of the nation,” he said. “It will put even more stress on an already stressed grid.”

As a result, some cooperatives have asked that the bill be modified to remove fossil fuel electricity generated by plants located outside of Minnesota, as well as gas-fired ‘peaking’ plants, which operate at times of high demand for electricity.

There are exceptions to the bill that allows utilities to take advantage of an “off-ramp” if they are able to demonstrate to the Minnesota Public Utilities Commission that meeting the benchmarks would have a significant impact on their energy costs or reliability. The Bill would also give utilities the option to purchase renewable energy credits to meet the standard instead of purchasing or generating renewable energy directly for their own use.

Additional Information

According to the proposed legislation, utilities would need to increase the amount of their retail electric sales generated by renewable energy sources – either wind or solar – to 55% by 2035 in order to meet the requirements. Further, utilities would be required to have 80% of their electricity from carbon-free sources by 2030, and increase to 100% by 2040.

The state’s largest electric utilities, including Xcel Energy and Minnesota Power, have pledged to be carbon-free by 2050.

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