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Yahoo
23-04-2025
- Business
- Yahoo
MN Senate energy bill could dial back landmark climate policies
The Clara City Community Solar Garden is shown in Clara City, Minnesota. Photo courtesy of New Energy Equities The Minnesota Senate advanced a DFL-sponsored bill earlier this month that would sunset the state's pathbreaking community solar program in 2028 and significantly reduce the financial benefits of onsite solar for utility customers in small towns, rural areas and exurban communities across the state. The bill would also sunset Minnesota's Renewable Development Account, which uses millions in annual nuclear waste storage fees paid by Xcel Energy to subsidize residential solar panel installations. Environmental and clean energy advocates assailed the bill in a press conference at the Capitol last week. 'This bill is a betrayal of Minnesota's climate promises' and the product of 'backroom deals (that) are handing our future to polluters,' said Steve Morse, executive director of the Minnesota Environmental Partnership. The package represents a stark change in state energy policy from 2023, when lawmakers passed sweeping legislation that expanded the community solar program, boosted solar incentives for low-income customers and mandated that Minnesota generate 100% of its electricity from carbon-free sources by 2040. 'Community solar gardens power 30,000 Minnesotans, create local jobs, and save people money, especially renters, low-income households and public interest institutions like schools, hospitals and counties. All of this makes it the largest and most equitable form of solar in the state,' said Pouya Najmaie, policy and regulatory director for Cooperative Energy Futures, a solar nonprofit. Other provisions in the bill could weaken Minnesota's clean electricity standard by defining some power plants that burn wood waste and biodiesel as carbon-free, advocates said. The bill would also define new, larger hydroelectric dams as potential sources of carbon-free electricity, a change from the 2023 law. The Senate bill has enthusiastic support from the Minnesota Rural Electric Association, which represents 50 nonprofit rural electric cooperatives serving 1.7 million Minnesotans. For more than 40 years, Minnesota customers with their own solar arrays have been eligible to receive a credit on their bill for electricity they contribute to the grid, under a framework known as net metering. The Senate bill would eliminate that option for systems in electric cooperative and municipal utility territories that apply for grid connections after Dec. 31, 2026, and instead set compensation using a less generous 'avoided cost' standard. Existing solar installations in electric co-op and municipal utility territories would not be affected. Nor would existing or future systems in territories served by public utilities like Xcel Energy or Minnesota Power. But any co-op or municipal utility customer who wants to install solar after next year would be compensated at the new, lower rate. The change could encourage smaller Minnesota power companies to speed up deployment of larger solar facilities ahead of the 2040 deadline, the Rural Electric Association said earlier this month. 'Utilities can purchase the same energy at about half the cost by buying or building systems at utility scale. And that means we can get twice as much carbon reduction for the same price,' MREA CEO Darrick Moe said in an April 7 statement. In an interview this week, Moe said the net metering change is MREA's biggest legislative priority this session. From MREA's perspective, the state needs to get out in front of a potential rapid rise in demand for smaller, less cost-effective solar systems, he said. In other words, without a change, MREA says, the good deal offered to those rooftop solar consumers would push costs up for everyone else. Sunny California is the poster child for this 'cost-shift,' according to Moe. He cited a University of California analysis that blamed residential rooftop solar — which produces about 20% of the electricity consumed by residential customers of its three major public utilities — for shifting $4 billion to other customers' bills. That works out to between 9% and 22% of the retail electricity price, depending on the utility. John Farrell of the Institute for Local Self-Reliance, Najmaie of Cooperative Energy Futures and more than a dozen other environmental and energy equity advocates disputed the concept of cost-shifting in an April 4 letter to Minnesota legislators. Retail-rate compensation 'is a fair and straightforward policy since the power delivered to the grid is used by their neighbor and that neighbor is then charged retail for that power by the utility. The utility then credits the solar owner who provided the power that same amount. There is no cost shift,' they wrote. The Senate bill wouldn't deter electric co-op and municipal utility customers from installing solar to meet their own energy needs, but rather disincentivize 'oversized systems' designed to benefit from the current net metering framework, Moe said. In other words, some customers set up systems that produce far more power than they need with the intent of selling electricity back to the utility. 'What we're looking for here is really a modest change,' Moe said. One rural net metering beneficiary had a different take at the Capitol press conference. 'There's no way I would have even considered (solar) had I thought net metering was going to be history,' said Carmen Fernholz, who spent $160,000 to add solar last year on his 450-acre organic farm in western Minnesota. If the net metering change passes, 'Solar in rural and small town Minnesota would all but stop,' said Bobby King, Solar United Neighbors Minnesota director in an email. With about a month left to go in this year's legislative session, the energy omnibus bill likely isn't yet in final form, so the fate of the net metering change, community solar sunset and other individual items remains uncertain. And House Democrats, who share control of the lower chamber, may be less supportive of those provisions, Moe said. But 'being in the Senate omnibus means (the net metering provision) is a live bipartisan issue for end-of-session negotiation,' he said.
Yahoo
17-04-2025
- Business
- Yahoo
Federal uncertainty and ‘implementation' issues cloud outlook for Minnesota's clean energy economy
The Long Lake Community Solar Garden is shown in Long Lake, Minnesota. (Photo courtesy of New Energy Equities) Minnesota's electric grid is cleaner than ever, and the state is well positioned to take advantage of emerging energy industries, Clean Energy Economy Minnesota said Thursday. But federal policy chaos — driven by President Donald Trump's tariffs and general preference for fossil fuels — as well as shifting consumer behavior and lagging implementation of environmentally-friendly technologies hint at bigger challenges ahead for one of the fastest-growing sectors of the state's economy, analysts and industry representatives said at a Monday press briefing. 'Certainly there's a lot going on right now…that makes predicting the future and [even] predicting today a little bit unsteady,' said Becky Wacker, director of energy services sales, North America, for Trane Technologies. The U.S. power sector saw a 'dramatic transformation' in recent years thanks to falling costs for wind and solar power, state clean energy policies and long-term clean power purchase commitments by tech giants like Amazon and Google, said Derrick Flakoll, Bloomberg NEF senior policy associate. In Minnesota, carbon emissions from power generation fell 52% between 2005 and 2024 as cheaper, lower-emitting sources edged coal off the grid, according to CEEM's 2025 energy factsheet. More recently, the Inflation Reduction Act of 2022 spurred investment in nascent clean-tech industries like low-emissions hydrogen and sustainable aviation fuel, which airlines and jet manufacturers see as key to their long-term sustainability goals. CEEM's factsheet touted the Minnesota SAF Tax Credit, which pays $1.50 per gallon of SAF produced and sold in Minnesota through June 2030, and a biofuels startup's plan to build a $5 billion SAF plant in Moorhead that could eventually produce nearly 200 million gallons of fuel each year. These investments 'now face significant market risk' due to the Trump administration's hefty — and self-contradictory — import tariffs, and the very real possibility that Congress narrows or repeals key IRA tax credits later this year. 'The fate of this is hanging in the balance (due to) a lot of political and economic factors,' Flakoll said. State-level policy looks steadier in the near term, including Minnesota's Wacker said. That could be a silver lining for HVAC and refrigeration businesses like Trane, which has rebranded itself as a leader in building efficiency and decarbonization. 'A number of states are staying pretty consistent in how they're approaching things,' she said. Minnesota is 10th in the nation for 'overall energy efficiency,' according to the American Council for an Energy Efficient Economy. A 2021 law that boosted utility-led efficiency programs saved residents and businesses more than $307 million over two years, CEEM said. But Minnesota's ambitious efficiency and sustainability policies haven't translated into action to the extent seen in nation-leading states and cities, Wacker said. She nodded to Washington state, which will begin holding larger buildings to strict sustainability standards next year; and New York City, where Local Law 97 encourages landlords to swap out creaky boilers for efficient heat pumps. On electric vehicle uptake, Minnesota lags the national trendline. New registrations fell 44% from 2023 to 2024, slipping below 10,000, as EV sales grew 6.5% nationally, CEEM found. Minnesota had 65,679 plug-in EVs on its roads in November 2024, according to CEEM — less than 2% of total light-duty vehicle registrations. Plug-in vehicles accounted for 1 in 4 vehicle registrations last year in California, the top U.S. EV market, though the total share of EV registrations there remains far lower. And while it's not yet clear whether it's a blip or part of a longer-term trend, Minnesota's wind power industry stalled out last year. 'That's a little different from past years, when we had a combination of wind and solar [added to the grid],' said Cathy Liebowitz, director of member engagement for CEEM. Flakoll said wind power has several factors working against it right now. Most of the windiest areas already have working turbines; solar farm construction costs are rapidly declining; and the massive scale of the typical wind project can complicate projects, he said. State lawmakers passed a major energy permitting reform bill last year that could accelerate approvals for large-scale wind and solar installations, but the law won't take effect until July. Despite the wind slowdown, CEEM's latest factsheet had some qualified good news for Minnesota utility customers. The average consumer paid 12.36 cents per kilowatt-hour in 2024, up 1.2% from 2023 and 30% from 2015, CEEM said. But that's lower than the 2024 national average of 12.99 cents per kilowatt-hour — up 2.4% from 2023. Minnesotans should blame the aging electric grid and volatile natural gas prices for steadily rising electricity rates, rather than wind and solar farms, Liebowitz and Flakoll said. Transmission and distribution grid infrastructure account for 63% of the $45 billion Xcel Energy plans to invest through 2029, compared with 11% for renewable power, the utility said in November. 'The grid is old in general, so updating it regardless of whether it's clean or not is something states are working on,' Liebowitz said. Meanwhile, the actual cost of generating power is closely correlated with natural gas prices because gas-fired power plants tend to be the 'last' units called on to meet demand, Flakoll said. 'If you rely on natural gas at the margin, you are going to affect bills,' he said. 'To say renewables are the driving force behind these electricity rate increases would be overly simplistic and probably not true.' SUPPORT: YOU MAKE OUR WORK POSSIBLE
