Minnesota Renewable Energy Standard Signed Into Law

New Aggressive Standard Sits Well With Xcel, Minnesota's Largest Utility

[From Wind Energy Weekly/AWEA:]

Culminating two weeks of rapidly unfolding events, Minnesota Governor Tim Pawlenty (R, picuted left), on February 22 signed into law a renewable energy requirement for 25% of the electricity produced by the state’s utilities to come from renewables by 2025.

Earlier in the week, the state House of Representatives passed the bill in a decisive 123-10 vote that had strong bipartisan support. The legislation also received overwhelming support in the state Senate, passing by a 61-4 margin earlier this month (see Wind Energy Weekly #1227). Depending on load growth and assuming that the entire “Renewable Electricity Standard” (RES) is reached through the deployment of wind power, it is expected that the state will need between 5,500 MW and 6,300 MW in new wind projects.

“This Renewable [Electricity] Standard blows open the door to a new electricity industry that will bring thousands of jobs and pump billions of dollars into Minnesota’s economy,” said Michael Noble, executive director of Fresh Energy, a Wind Energy Works! coalition member and non-profit organization that works to lead a transition to a clean energy system. “It makes economic and environmental sense to create 25% of our electricity . . . and aggressively look at the options available to create global warming solutions in our state.”

The law specifies incremental benchmarks for utilities, with Xcel Energy’s RES ultimately reaching as high as 30%: 15% by 2010, 18% by 2012, 25% by 2016, and 30% by 2020. All other utilities, meanwhile, have a requirement of 7% by 2010, 12% by 2012, 17% by 2016, 20% by 2020, and 25% by 2025.

Xcel Energy, one of the entities that worked with the bill’s authors during its development, said that overall, the RES is a good piece of legislation. “We think it strikes a good balance between pursuing an aggressive wind standard and protecting our ratepayers,” Rick Evans, the director of government affairs for Xcel Energy in Minnesota, told Wind Energy Weekly.

Explaining how stakeholders had “a lot of discussions [with state officials] about “what could go wrong,” Evans said his company specifically liked the fact that any challenges in meeting the RES were to be taken to the Minnesota Public Utilities Commission (PUC), which he called “the right place to go” to address such issues. The legislation allows for the possibility of the targets to be delayed, but only if the PUC determines that it would be in the public interest to do so; further, the bill includes language to ensure that various roadblocks would not indefinitely delay or prove fatal to implementation of the RES for any utility. For example, transmission constraints and delivery issues would be one legitimate reason for utilities not hitting RES targets; however, in that event, utilities would be required to move forward in the regulatory and construction process for the needed new transmission.

While highlighting the importance of what he called “ratepayer safeguards,” Evans made clear that, “We think we can accomplish this [RES].”

I guess adding the flexibility of being able to ask the Public Utility Commission to delay targets if they become too challenging to meet secured Xcel Energy's support for the Renewable Energy Standard. I'm a bit concerned about the level of flexibility this adds to the standard (policies have to have some teeth to them to ensure compliance), but having the state's largest utility on board throughout the process must have been instrumental in securing the kind of overwhelming support recieved by the MN RES. This policy practically flew through both the House and the Senate!

MN now jumps to the front of the pack of clean energy states, with perhaps the most aggressive ramp up rate for new renewables of any Renewable Energy Standard policy.

With any luck, Oregon will be snapping at their heals by the end of the year, although passing our RES is shaping up to be a bit more of a fight than the MN RES. Oregon's Governor Kulongoski has proposed a 25% by 2025 Renewable Energy Standard which will be right behind Minnesota's new policy in terms of the rate at which it requires Oregon's utility's to add new renewable energy sources to their mix.

I'm working hard at the Renewable Northwest Project to pass Oregon's RES. For more information on the Oregon RES, head to www.poweringoregonsfuture.org...