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Conferees find House wants renewables, Senate health reinsurance

It’s not as much about how much money, but where to spend it.

That’s the key difference House and Senate conferees are discussing in the omnibus commerce, consumer protection, and energy policy and finance bills that each chamber produced.

On the House side, the big emphasis is cultivating renewable energy sources, while the Senate is interested in extending the state’s health reinsurance program and retiring a solar energy incentive program.

Members of the conference committee started reviewing the differences between the versions of HF1031/SF972* Monday, with a side-by-side comparison of both proposals outlined by nonpartisan fiscal and research staff. The committee plans to meet Tuesday afternoon to complete the comparison.

Total appropriations from the bills come to $362.3 million for fiscal year 2022 in the House version and $355 million in the Senate. The largest portion would come from a “special revenue fund” collected by the Commerce Department from fees and other sources: $146.2 million in the House bill, $142.3 million in the Senate bill.

[MORE: View the spreadsheet]

The second largest amount of funding for fiscal year 2022 would be from the Renewable Development Account, a state-administered fund designed expressly for the purpose of developing renewable energy sources in Minnesota. Xcel Energy pays into it with annual fees of between $350,000 and $500,000 for each cask of nuclear waste it stores at its Prairie Island and Monticello facilities.

The Senate bill includes $89.8 million from that fund, while the House bill funds its projects with $85.6 million from the account.

Federal funds account for $77.8 million in each bill, with the bulk of the rest of the bills’ funding coming from the General Fund ($35.2 million in the Senate bill, $42.8 million in the House).

For fiscal year 2022, the House appropriations would be $7.3 million more than in the Senate bill, but the Senate would spend $138.5 million more than the House in fiscal year 2023. What’s the big difference in 2023? The Senate would like to extend the state’s health reinsurance program, which would cost the state $150 million that fiscal year.

Other than that, the totals aren’t too widely disparate. The chief difference for fiscal year 2022 would be in appropriations to the Commerce Department, with the House bill calling for $271.9 million, the Senate for $257.6 million. And the Senate would like to spend $4.2 million more from the Renewable Development Account than the House.

Which is interesting, when you consider the House has 28 more provisions in its bill that would be funded by that account. Among them are electric vehicle rebates ($11.5 million), creating a Minnesota Innovation Finance Authority ($10 million), the Metropolitan Council’s purchase of electric buses ($5 million), and placing solar devices on state buildings ($4.1 million).

So where is the Senate dipping into the account instead? The big ticket item is $21.2 million to retire the obligations of the state’s “Made in Minnesota” solar energy production incentive program. The House only appropriates $100,000 for administration of that account in both fiscal years 2022 and 2023. The Senate would also transfer $18 million from the renewable account to a Biomass Business Compensation Account, and provide a $10 million grant to the University of Minnesota for a research and demonstration project on energy storage systems for hydrogen and ammonia production from renewable energy sources.

But there are areas of agreement for uses renewable account dollars. Each bill contains $15.2 million in grants in fiscal year 2022 for the Prairie Island Indian Community’s efforts to become a “net zero emissions” community. And each bill would provide $2.5 million for a clean energy career training pilot project.

The bills are similar on the “Solar on Schools” program, which would receive $8 million for fiscal year 2022 in the Senate bill, $6.7 million in the House language (with $5 million more coming in fiscal year 2023). Both bills also call for a grant to the city of Mountain Iron for expansion of a solar manufacturing plant, with the House bill allocating $5.5 million to the Senate’s $5 million.

The Senate has three appropriations that have no corresponding House language. In addition to that University of Minnesota energy storage systems project, a wood pellet production incentive would be funded at $3.7 million in fiscal year 2022, and a mandated health benefit proposals evaluation would bring $105,000 to the Department of Education, $49,000 to Minnesota Management and Budget, and $37,000 to the Department of Health.

Meanwhile, the House bill contains consumer protection policy language on a prescription drug affordability board, insurance, collection agencies and debt buyers, and licensing of student loan servicers, among other things.

As for proposals related to renewable energy in the House bill, but not in the Senate, there are several. In addition to the ones listed above, here are the biggest ticket items, with their proposed appropriations for fiscal year 2022:

  • an efficient technology accelerator, $3.4 million;
  • rebuild right grants, $3 million;
  • electric vehicle automobile dealer certification, $2.5 million;
  • the University of St. Thomas microgrid, $2.4 million;
  • electric school buses, $2.1 million;
  • vehicle charging stations in parks, $2 million;
  • charging stations at county government centers, $2 million;
  • solar devices in state parks, $2 million;
  • a climate transition plan, $746,000;
  • a University of Minnesota small-area climate models projection, $583,000;
  • Northfield distribution system upgrades, $550,000; and
  • an energy transition office, $450,000.

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