"Haven't you heard? We're the white hats now!" -- Utility lobbyist at State Capitol hearing this afternoon
Today marked a milestone in the pursuit of America's renewable energy policy, as I watched the Democratically-controlled Minnesota State Senate Committee on Energy, Utilities, Technology and Communications pass Senate File 4 moments ago, a bill which mandates about 25% of Minnesota's electricity will come from renewable sources by 2020, and the gradient of renewable energy will rise every few years until then. This will be America's most aggressive renewable electricity policy, once it passes the Legislature.
In the process of contributing writing for the new 2007-08 edition of Politics in Minnesota: The Directory, I've been interviewing a broad swath of state legislators since Jan. 3rd. As luck would have it, I interviewed Sen. Yvonne Prettner Solon (DFL-Duluth), the chair of the committee, at about 1, and she informed me that it would pass the committee at 3 PM, after hundreds of hours of late-night negotiations all month.
In a pretty admirable bit of coalition politics, Solon informed me that she, along with Sen. Ellen Anderson (DFL-St. Paul), who has led this charge for about a decade, had secured the support of the utilities, the chambers of commerce, and the Republican governor, who all have agreed to accept the final amendment to the bill and refrain from lobbying the now DFL-controlled House.
The final round of negotiations produced a set of "off ramps" that would allow utilities to fail to meet the renewable energy targets, if they meet certain conditions to the satisfation of the state commission that regulates energy. However, if they fail without meeting the "off ramps", they will get hit with big penalties.
The bill also set up a way for utilities (except Xcel Energy, the state's largest) to sell renewable credits. Also, biomass production like methane-burning bacteria-based manure-type plants now count as renewable electricity sources, as well as some other biomass methods.
In the final negotiated amendment (number 15, not yet on the Legislature's website - revisor # SCS0004A-15), solar, wind, hydroelectric less than 100 megawatts, and hydrogen sources are renewable, and after Jan. 1, 2010, the hydrogen must come from these. Biomass, including landfill gas, "anaerobic digester systems" and energy recovery facility used to capture heat from municipal solid waste, or fuel derived from that, are also renewables within the scope of the bill that passed committee.
Seven percent of all utility's total retail electric sales by 2010 must be renewable. The table of electric retail sales for all state utilities is: 2012 - 12%, 2016 - 17%, 2020 - 20%, 2025 - 25%.
The table for Xcel Energy is quite a bit higher as "an electric utility that owned a nuclear generating facility as of January 1, 2007." 2010 - 15%, 2012 - 18%, 2016 - 25%, 2020 - 30%. Senator Anderson observed that the math works out to roughly 25% total by 2020, which was the goal the Senate passed during the last term, although the formerly GOP-controlled House blocked all action on it.
The teeth come from changes to the law, replacing statements like "the utility is making the required good faith effort" to "the utility's effort to comply with this section".
In January 2008 a tradeable, renewable energy credit program will be established. Each killowatt-hour credit from legitimate sources must be treated as renewable - for the purposes of utilities hitting their targets. They also can only use a credit once. (no Enron-style multi-flips here, I hope). "In lieu of generating or procuring energy directly to satisfy the eligible energy technology objective or standard... an electric utility may utilize renewable energy credits allowed under the program to satisfy the objective or standard," and the commission is ordered to facilitate trading among states. Excel can't sell credits - in other words, they can't sell wind kilowatt-hours to hapless small utilities that can't get it together.
This is pretty cool, though: it's a market mechanism that should prompt cooperative energy start-ups, who merely have to build a pricey link to the power grid in order to sell their renewable energy as credits. Ownership structures and energy business insurance and loans are another major issue floating around the Legislature.
The "off ramps" for utilities allow the state's energy commission to let utilities off the hook, in the context of "maximize benefits to Minnesota citizens, balancing factors such as local ownership of or participation in energy production, development and ownership of eligible energy technology facilities by independent power producers, Minnesota utility ownership of eligible energy technology facilities, the costs of energy generation to satisfy the renewable standard, and the reliability of electric service to Minnesotans." This paragraph puts the utility lobbyists at a certain ease, and ensures that the system won't disintegrate if they can't meet the goals.
There is also a provision about how the heck the state will deal with setting up the transmission lines. One grizzled GOP veteran observed to me that ironically the same people after windmills these days, were also fighting with farmers against power lines in the 1980s and early 1990s.
The interest in renewable energy is a broadly bi-partisan one now, with many legislators in agricultural areas and the Republican Governor much more amenable to it than a few years ago. As we are still working on the Directory - a 700-plus page index of the Legislature, districts, and the bureaucracy, I'll refrain from saying any more about that side of the politics until our interviews are done. But if you're a Minnesotan please order one on advance - its a great help for anyone who's civically engaged! (and I swear we'll be done in a few weeks).
I will have much more to say after the process wraps.... Believe me, there is nothing quite like a state House of Representatives just seized by very liberal Democrats.