Energy Policy the 'Minnesota Way'- Part 3: Impacts and Opportunities

Posted by Megan Hoye, LEED AP  |  Date August 25, 2014

In the third and final installment of the 'Minnesota Way' blog series (take a look at part 1 and part 2) Sheldon Strom and Mike Bull discuss several recent energy policy accomplishments and what the future of energy policy looks like in Minnesota. 

Megan: How has the “Minnesota Way” impacted the evolution of our state’s energy policy and energy efficiency programs?

Sheldon

Until energy policy started to be approached with facts, cooperative listening and goals aligned with the public interest, the conversation in the power sector was all about building more generating capacity to meet growing demand because that was a means to increase utility revenues.  Over the years we found innovative ways to compensate utilities for doing the right thing regarding resource choices.  The “Minnesota Way” set a precedent in this state for how to carve new policies across broad and complex interests. It established a level of trust among a broad cross-section of stakeholders – utilities, environmental advocates, low-income advocates, business representatives and others – that continues to be strong today. 

In hindsight, this collaborative kind of approach helped Bill Grant put the coalition together to enact to legislation in 2001 to facilitate Xcel Energy’s Metropolitan Emissions Reduction Proposal (MERP), to retire two coal plants in the metro area and upgrade the environmental controls on a third. Local communities and environmentalists achieved their goal of eliminating or reducing pollutants from these old coal plants, the utility received approvals to increase generating capacity and reduce lag associated with recovery of those costs and customers were assured of reliable, cost-effective supply for decades.  
 

Mike

This approach also led to significant legislative accomplishments in 2005, when Minnesota enacted legislation that made Minnesota the national leader on community-based wind development while establishing the foundation for significant new investment to bolster the region’s high voltage transmission grid.  That legislation – enacted by Wind on the Wires -- also required the Minnesota Department of Commerce to conduct a Wind Integration Study of the impacts on the reliability and costs associated with increasing wind capacity to 20% of MN retail electric energy sales by 2020. Then in 2006, Minnesota enacted nation-leading legislation to reduce mercury emissions from coal-fired power plants that had been worked out between environmentalists, regulators and utilities. It was legislation that looked impossible to pass at the beginning of that session, but passed nearly unanimously by the end.   

The “Minnesota Way” of energy policy culminated in the nearly unanimous passage of the 2007 Next Generation Act, which enacted the most aggressive renewable energy and energy efficiency standards of any state at the time and established greenhouse gas emissions limits for the state.  Because of the many hours of discussion and debate prior to enactment among a great number of interests and advocates, the NextGen Act passed the 2007 Minnesota legislature with fewer “no” votes than the bill to establish the Honeycrisp Apple as the state apple – a testament to our state’s bi-partisan, progressive energy policymaking.  

Sheldon

As a result of these broadly-supported policy achievements, Xcel Energy, Minnesota’s largest utility, has become a national leader on greenhouse gas emissions,  reducing greenhouse gas emissions from its Minnesota operations by over 22% since 2005. And it’s not just Xcel Energy.

By helping us all save energy and adding robust amounts of wind energy to the grid, Minnesota utilities have significantly reduced environmental impacts and reduced customer bills substantially from what customers would have otherwise paid. And now, given dramatic reductions in the cost of solar energy and growing consumer demand, we can anticipate a boom in cost-competitive solar generation in the state.

Mike

Even more heartening is the fact that more progress is on the horizon. Xcel Energy, Minnesota Power, Otter Tail Power and Great River Energy are all participating in a project known as “e21: an Electricity System for the 21st Century,” and, with representatives from the business and environmental communities, are exploring changes to the way utilities are regulated in Minnesota in order to empower customers, stabilize rates and facilitate 80% reductions in greenhouse gas emissions by the middle of this century.  These utilities and others are actively engaged in a ground-breaking engineering study of increasing the state’s renewable electricity standards to 40% and 50% by 2030, while maintaining system reliability. And finally, Xcel Energy and others are participating in the Energy Future Framework project, overseen by the Minnesota Legislative Energy Commission, to develop a plan to reduce or eliminate Minnesota’s reliance on fossil fuels.  

As with the prior decade’s successes, future advances in clean energy and sustainability in Minnesota will not come easily and will require the same forward-thinking collaboration that resulted in today’s nation-leading achievements.

Further reduction in the environmental impacts of our energy system will require that we continue to listen to and work with a broad cross-section of stakeholders– environmentalists, the business community, low-income advocates, utility leaders and a host of others – and be willing partners in working toward shared goals (even if it is sometimes for very different reasons).  

The “Minnesota Way” of collaborating and crafting broad-based and broadly supported solutions is a unique approach that is the foundation of Minnesota’s energy policy success and is critical for Minnesota’s future.  It allows us to step out of the “zero-sum game” I referenced earlier, where for one side to win, the other side has to lose.  Instead, the “Minnesota Way” leads to win-win-win solutions to today’s energy policy challenges and builds social capital that can be invested in solving tomorrow’s.   

 Photo Credit: Tom via Creative Commons