ST. PAUL, MN – The Minnesota House of Representatives passed a bill authored by Rep. Carly Melin (DFL—Hibbing) last night by a vote of 76 to 55 with support from both sides of the aisle. The bill (HF 623) makes changes to a power-purchase agreement between Xcel Energy and the Laurentian Energy Authority (LEA), a joint project of Virginia Public Utilities and Hibbing Public Utilities.
Current law requires Xcel Energy to purchase power from wood-farm biomass generation facilities owned and operated by the LEA. The wood-burner opened in 2007 after the legislature originally approved the project in the 2003 Special Session. Rep. Melin’s bill provides parity for the LEA’s wood-burner with biomass plants in St. Paul and Benson, which also have power-purchase agreements with Xcel.
“This bill levels the playing field between our state’s three biomass facilities that have agreements with Xcel Energy,” said Rep. Melin. “It makes sure that the renewable energy produced at the facilities in Hibbing and Virginia will continue providing power to thousands of residential and commercial customers in our region.”
The amended contract requires Xcel to reimburse the LEA for fuel costs used to deliver both coal and wood to the plants in Virginia and Hibbing, restricts Xcel from charging the LEA for “costs which were not actually and reasonably incurred” by Xcel, and requires Xcel to buy all power produced by the biomass facility up to 110 percent of annual production scheduled.
“The changes to the power-purchase agreement in this bill help offset rising production costs for the LEA,” added Rep. Melin. “In fact, it would mean about $1.4 million in savings every year for the cities of Hibbing and Virginia. That means utility rate savings for residents and businesses.”
The Senate’s version of the bill (SF 521) is identical to Rep. Melin’s bill, which means today’s vote in the House sends the legislation to Governor Dayton’s desk to be signed into law.