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Biomass contracts could be rejiggered

Terry Leoni, managing member of the Laurentian Energy Authority, testifies before the House Job Growth and Energy Affordability Policy and Finance Committee March 21 in support of a bill sponsored by Rep Jason Metsa, left, that would amend biomass project contract terms. Photo by Andrew VonBank

Biomass energy contracts that date to a 1994 law mandating renewable energy could be renegotiated or terminated under HF759, sponsored by Rep. Jason Metsa (DFL-Virginia).

The bill would let Xcel Energy ask the Public Utilities Commission for approval of new or amended power purchase agreements with utilities, such as Laurentian Energy Authority, or to buy out those utilities, ending the agreements.

The House Job Growth and Energy Affordability Policy and Finance Committee held the bill over, as amended, for possible inclusion in an omnibus bill. The companion, SF700, sponsored by Sen. David Tomassoni (DFL-Chisholm), awaits action by the Senate Energy and Utilities Finance and Policy Committee.

Laurentian Energy Authority is one of several smaller utilities with which Xcel has contracts for energy produced by burning biomass fuel. The authority is co-owned by the Hibbing and Virginia public utilities commissions.

Representatives of Xcel and Laurentian said negotiations between the two utilities are already underway, with a goal of concluding them by July 1 – not including approval by the commission.

Rick Evans, Xcel’s director of regional government affairs, said the high cost of biomass energy shows up on customers’ bills, accounting for 5 percent of what top industrial customers pay and 2.5 percent for residential customers.

The aim of negotiations, Evans said, is to “get to a place where both of us are winners.”

Metsa said local investments for biomass generation, such as in specialized logging equipment, have been significant. The bill, he said, is not meant to put an end to biomass, but the amount of energy generated could be “potentially dissipated.” 

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