The Minnesota House passed a billion-dollar energy rate increase for Minnesota homeowners and businesses late Tuesday night after multiple efforts by members of both parties to stop it. Many outside environmental groups want Minnesota to become a model of other states and nations that exercise government control over power producers; this helped push the House Democrats to pass HF956, the Energy Omnibus bill. The bill will require 40% of energy produced by investor-owned utilities, like Xcel Energy, come from renewable sources by 2030. As you may know, Minnesota is already working hard to meet a renewable standard passed in 2007 which was a controversial bill, forcing utilities to take on expensive wind turbine construction, causing higher energy prices for all of us. This latest bill doubles down on this central control theory towards energy and erodes our free market system even further. Small businesses, like the one I own and operate with my husband, will see a direct hit to our bottom line.
Xcel has predicted it could cost them $1 billion to construct the 1000 megawatts of new solar panels required to comply with the new law. Those costs, along with other additional infrastructure, planning, operation and maintenance costs, will be passed on to ratepayers.
More alarming, this legislation forces companies like Xcel to utilize millions of dollars in solar panels to meet a mandate of using solar energy by 2025. Using New Jersey as a so-called role model, the bill will set up a mechanism for paying citizens to put panels on their roofs and “sell” solar energy back to the utility company. Opening up individual solar metering pits Minnesotans against Minnesotans. A person who has a south facing house unobstructed by trees, or a wealthy commercial building owner, may take advantage of the opportunities to generate power subsidized by their neighbors who can’t afford the initial investment or otherwise aren’t in a position to install solar.
Panels could cost $60,000 to place on a home and often require good credit with financing. But solar, unlike wind or natural gas, has not reached effective efficiency levels yet. Solar can cost 3-10 times more than wind to produce and is reliable only about 20 percent of the time. It may be the biggest gamble Minnesota’s lawmakers have taken with your energy bills in a very long time.
This bill creates an unlevel playing field by making investor-owned utilities play by a more stringent set of rules than cooperative associations and municipal power agencies. Residents and businesses could end up paying significantly different rates in neighboring cities, or even across the street in the same city.
Finally, I was disappointed to see the House majority “carve out” certain provisions so the bill’s damaging effects wouldn’t touch some parts of the state. One provision uses your money to “incentivize” investors to buy solar panels only from Minnesota-made companies (there are only two companies that make these in-state). If someone in St. Cloud wants to put up panels on their roof, they should have access to all vendors equally, including local companies, with open competition. Low income ratepayers will pay more for the same electricity in order to support the politically-connected groups who are given a government guaranteed market. The bill picks winners and losers, and the losers are unfortunately most Minnesotans.
Arbitrary renewable energy standards come with a real cost to the hardworking taxpayers of Minnesota. Picking winners and losers when it comes to energy means higher utility bills for Minnesotans. It will make energy more expensive and less reliable by putting a minimum mandate on unproven and still-developing renewable energy technologies.