Minnesota Power Lines Don’t Require Renewable Set-Asides

Published July 1, 2009

An administrative law judge in Minnesota has determined utilities need not set aside a specific amount of space for renewable power, clearing the regulatory way for new power transmission infrastructure in the state.

The Minnesota Public Utilities Commission has approved plans for a group of utilities to build three controversial long-distance power transmission lines. Utility companies and consumer advocates said the new lines are necessary to keep up with growing electricity demand, while environmental activists argued new transmission lines would disrupt regional ecosystems.

Xcel Energy and nine other regional utilities want to build three new transmission lines bringing power from out-of-state sources to Minnesota.

As a concession to the wind power industry, which had lobbied for a requirement for all three transmission lines to carry a set percentage of wind power, the Public Utilities Commission (PUC) directed the utilities to sign agreements with wind power companies to carry wind power on one of the transmission lines.

The state has renewable power mandates requiring utilities to produce 25 percent of their electricity from renewable sources by 2025, with Xcel Energy required to produce 30 percent of its power from renewable sources by 2030. Environmental activist groups such as the Minnesota Center for Environmental Advocacy (MCEA) have sought an additional requirement that any new transmission lines have a specific amount of space set aside for renewable power.

Lines Needed, Utilities Say

The utilities say the purpose of the new transmission lines is to maintain a reliable energy grid to match forecast increases in electricity demand. Requiring every individual project, such as the proposed transmission lines, to place special emphasis on renewable power is excessive given the overall renewable power mandate, the utilities say.

“The CapEx 2020 project was specifically designed to allow the accelerated construction of badly needed transmission infrastructure to accommodate the renewable energy mandates the legislature put in place,” said Rep. Mike Beard (R-Shakopee). “The law streamlines the certificate of need and the routing process and allows competing utilities to cooperate without running afoul of antitrust law.”

Set-Asides Debated

Environmental activists contend individual projects such as the proposed transmission lines must have individual renewable power requirements or there is a chance the overall targets may not be met.

“Because the Fargo and especially the Brookings lines go through some of the most productive wind farms in the region, MCEA argued that conditions should be placed on the certificate of need to make sure renewable electricity, such as wind, would be at the head of the line for these wires,” MCEA explained in a March 4 public statement.

“That the MCEA would even request such a nonsensical stipulation demonstrates their ignorance of how the grid, and the real world, works,” countered Beard. “Furthermore, they need these transmission improvements to provide baseload power to the windmills in very cold weather when the mills have to shut down and the electric heaters have to be turned on. They couldn’t get the legislature to do their bidding, so they’re trying an end run around us by trying to pressure the PUC to add it at their level.

“I think that their hatred of anything coal-powered is getting in the way of their common sense and distorting reality,” Beard added.

Renewable Power Still Guaranteed

“We didn’t get our conditions, so we are disappointed,” MCEA lawyer Beth Goodpaster observed in the group’s March 4 public statement following the administrative judge ruling. “But these lines are still likely to benefit wind, so that’s good.”

“There most certainly is going to be substantial additions of renewable energy” to the grid, regardless of whether specific set-asides are required, agreed Jim Alders, Xcel’s director of regulatory administration, according to the March 2 St. Paul Pioneer Press.

“I’m pleased with the court decision,” said Rep. Joyce Peppin (R-Rogers), following the administrative judge ruling. “The state already has an aggressive renewable energy mandate. Requiring utilities to dedicate a specific percentage of space on power transmission lines for renewable power would likely drive up costs to the consumer and could make the energy grid less reliable.”

James M. Taylor ([email protected]) is a senior fellow of The Heartland Institute and managing editor of Environment & Climate News.