C-BED for counties

A bill that would allow counties to purchase wind energy at fixed prices and invest in their own wind power projects is on its way to the House floor.

HF3585, sponsored by Rep. Lyle Koenen (DFL-Clara City), would allow counties to enter into long-term power purchase agreements for electricity generated by Community-Based Energy Development projects — primarily wind turbines — and also own and operate C-BED projects of their own. The House Taxes Committee approved the bill April 14.

“What this bill does is allow counties to collaborate on C-BED projects to promote wind energy development in Minnesota,” said Koenen, who explained that the bill’s language is the product of several years of talks between power companies and rural and metro-area counties. He said the utilities support the bill, and noted that cities already have the authority to invest in C-BED projects.

Peter McLaughlin, a Hennepin County commissioner, said the bill would help counties stabilize energy prices by entering into long-term contracts with C-BED developers that can guarantee electricity prices.

“Every prediction on the price of electricity has the graph heading north, and we’re trying to find a way to stabilize that,” McLaughlin said.

Some committee members are concerned that the bill would put counties in direct competition with the private market. Rep. Dean Simpson (R-Perham) said that county governments would have an unfair advantage over private investors insofar as they could levy taxes to pay for the projects.

“If I’m not mistaken, C-BEDs were basically designed for local investors, and now we’re going to put local government into the C-BED business,” Simpson said.

Koenen rejected the idea, and suggested that the bill might actually help more privately funded projects come to fruition.

“If there’s a project that’s 90 percent of the way there or 95 percent of the way there, but doesn’t have quite enough investment to get over the edge, the counties could fill in to complete the project,” he said.

In response to objections raised by several committee members, Koenen amended his bill by striking provisions that would have granted counties the authority to issue tax-exempt bonds and levy a 0.015 percent property tax increase to pay for C-BED projects.

A companion bill, SF3160, sponsored by Sen. Gary Kubly (DFL-Granite Falls), awaits action by the full Senate.