Carbon-free energy proposal needs safeguards for cost, reliability

By: Jenny Glumack, Director of Government Affairs, MREA

On January 5, the Minnesota Legislature proposed a bill to transition all electricity sold in the state to be carbon-free by 2040. The bill must consider potential impacts to the reliability and affordability of the essential electric service provided by Minnesota cooperative utilities to their 1.7 million members.

As new energy generation and transmission facilities are built to meet clean energy requirements, existing generation facilities are being retired early and are being replaced with renewable resources, such as wind and solar. This significantly impacts reliability as variable resources (i.e. wind and solar) cannot be counted on to always be available when needed. This bill would accelerate this troubling trend.

It is currently not possible to expect the electric system to function in Minnesota without significant gas, coal and/or nuclear generation. Technology to fully transition these generation fuels to renewable resources is not developed yet, much less deployed.

Both MISO (Midcontinent Independent System Operator) and NERC (North American Electric Reliability Corporation) recently issued warnings about potential energy shortfalls during extreme weather in the Midwest. These warnings extend year-round for the next several years. In fact, just this past December 23, MISO declared a maximum generation emergency event to maintain the reliability of the electric system. These maximum generation events are warnings the system is nearing a point that rotating power outages may be required, and they are predicted to happen more often in the coming years.

Minnesotans are already experiencing rising costs of goods and services throughout the economy. Developing new renewable generation facilities, equipment, and infrastructure to support carbon-free energy will take significant time and money. Forcing premature energy resource decisions through mandates, as is the case in the proposed legislation, will only drive costs up.

These new mandates are not needed to transition to a cleaner electricity system. Minnesota’s clean energy transition in the electric utility sector is already well underway. In 2005, 65% of the state’s electricity was generated by coal. Today, that number has dropped to 26% and is projected to be no more than 5% by 2035.

Additionally, 30% of our energy generation comes from renewable sources, up from just 5% in 2005. By 2035, renewable energy generation in Minnesota is projected to be 50%.

No other state in the country has reduced electric sector carbon dioxide emissions more successfully than Minnesota.

WE NEED YOUR HELP! Help keep energy reliable and affordable to all Minnesotans, especially rural electric cooperatives. Make your voice heard on these issues by reaching out to your local legislators. An easy way to do this is to sign up for Voices for Cooperative Power.

Here is what we ask of our state legislators:

  1. Eliminate the separate renewable energy mandate in the proposed carbon-free legislation, which complicates the overall goal of reducing carbon emissions.
  2. Eliminate the 2030 and 2035 compliance milestones. These milestones are unnecessary and will force premature and costly resource decisions before more effective and economical technologies are available to meet the 100% carbon-free objective as affordably and reliably as possible. In the near term, these milestones will accelerate the closure of generation and add to the reliability challenges we’re already experiencing.
  3. Exclude gas resources with limited capacity factors, otherwise known as peaking plants, from the generation facilities used to determine compliance with the mandate. These peaking facilities are crucial when energy demand is at its highest – usually the hottest or coldest days of the year in Minnesota.
  4. Exclude non-Minnesota generation in determining compliance for those utilities whose carbon-emitting resources are located entirely outside of Minnesota.
  5. Put cooperative boards in the role of balancing reliability and affordability in the event meeting deadlines would put them at risk. The bill currently relies on state regulators to do that for all utilities, which is not appropriate for cooperatives, who rely on locally elected governing boards to balance these concerns.
  6. Include all carbon-reduction resources and technology in the mandate. This includes lifting the nuclear moratorium to allow small modular nuclear generation as a possible energy resource and allowing generation facilities to count carbon capture technology as part of their carbon emission reductions.

Cooperatives were founded by individuals working together to make their voice heard, leading change and bringing power to the people in rural areas. Today, we must remain unified and make our voices heard to ensure the transition to carbon-free energy maintains the affordability and reliability of electricity for all of Minnesota residents, especially rural electric cooperative member-owners.

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