Energy and telecommunications finance bill

The omnibus energy bill, which is now part of the omnibus jobs finance bill, includes biennial funding for the Commerce Department’s Division of Energy Services, Telecommunications, Petroleum Tank Release Compensation Board, and the Public Utilities Commission. The bill provides an increase of $1.5 million over the base budget, appropriated from the Telecommunications Access Fund to the Commission on Deaf, Blind, and Hard-of-Hearing. (SF 1937)

Other provisions include:

  • Language from a vetoed bill that allows rural electric cooperatives to be exempt from regulation by the Public Utilities Commission for the state’s net metering law and allows for mediation of disputes by an independent third party. (F. 234)
  • Allowing Otter Tail Power and Minnesota Power to count larger rooftop solar installations toward the solar energy standard.
  • Establishing a residential PACE consumer protection task force and suspending residential PACE financing until consumer protections are enacted.
  • Authorizing a $10 million transfer from the Renewable Development Fund to the Iron Range Resources and Rehabilitation Board for retooling of a solar energy facility in Mountain Iron.
  • Prohibiting state regulation of any aspect of Voice-over-Internet protocol (VoIP) service or internet protocol-enabled service.
  • Adding privacy protection in the wake of recent congressional action, barring internet service providers from selling users’ personal data without written consent.

Governor’s concerns: 

  • For the Governor’s objections to the net metering language added to this bill after it was vetoed, see Electric cooperatives and net metering below.

Senate DFL Caucus concerns:

The VoIP provisions are highly controversial. Supporters argue the proposal allows the state to bring its regulatory structure into the twenty-first century by joining 33 other states in deregulating VoIP and other IP-enabled services.

Opponents argue that Minnesotans would lose a great deal if this legislation is enacted, including:

  • Assurance of reliable service
  • A forum for dispute resolution
  • Protections against price discrimination and illegal bill charges
  • Protection against the refusal to serve or disconnect customers a company deems unprofitable

Xcel allowed to build new power plant

This proposal allows Xcel Energy to construct, own, and operate a natural gas-fired electric power plant without the approval of the Minnesota Public Utilities Commission (PUC). (HF 113)

  • The project is made exempt from obtaining a “Certificate of Need” from the PUC prior to the plant’s construction, while the PUC keeps its authority to approve prudently incurred costs for the plant in a rate case.
  • Xcel Energy can build its 786 MW plant or choose to propose a different larger or smaller plant in a subsequent plan, which would be subject to approval by the PUC.

Governor’s concerns:

The Governor said that in spite of his concerns about proposals this year that weaken the PUC, the importance of this project for the City of Becker, the surrounding area, and the entire state requires certainty that the protracted PUC process cannot provided. The Governor signed this bill into law.

Senate DFL Caucus concerns: 

Supporters argued Xcel Energy is shutting down its Sherco generators earlier than planned and will likely get permission to build a gas plant in Becker. Both Xcel and the community need certainty around economic development and jobs, and this bill provides that assurance.

Opponents argued that allowing this exception to PUC regulation sets a bad precedent; legislators making decisions based on Xcel’s request removes the one protection that exists to prevent monopoly utilities from over-building at the expense of ratepayers. Also, this bill is one of several this year that erode the authority of the PUC.

Electric cooperatives and net metering

This bill allows rural electric cooperatives to be exempt from regulation by the Public Utilities Commission (PUC) for the state’s net metering law, provided the cooperative does so by resolution and adopts its own rules for implementing the net metering statute that includes a process for resolving disputes. This must include allowing a request by either party for mediation of the dispute by an independent third-party.

The bill also provides that any proceedings concerning the activities of an electric cooperative that are pending on this bill’s effective date are terminated, except for investigation by the PUC into whether methodology used by cooperatives to establish a fee complies with state law. If so, it may not be challenged. If the methodology is found not to comply with state law, the PUC must state changes necessary to bring it into compliance. (HF 234)

Governor’s concerns:

The Governor vetoed this bill on March 20. In his veto message, he said he would not accept any bill that limits or weakens the commission’s authority to protect the interests of Minnesota’s energy consumers. The PUC uniquely retains the expertise needed to fairly resolve disputes and removing its role removes this protection, and it would negatively impact the states’ progress toward renewable and efficient energy. However, the bill language has been added back into the jobs omnibus bill.

Senate DFL Caucus concerns:

Supporters argued that cooperatives are owned and regulated by its members, and the PUC should not have a regulatory role. Opponents made arguments similar to the Governor’s.

Senate DFL Media