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News from MMUA Posted 07/22/08 Letter to the Editor
of the Minneapolis Star Tribune We are writing in response to
the “Q&A: A full-tilt battle over electricity” published in the July 5
Star-Tribune. The Minnesota Municipal
Utilities Association (MMUA) represents the interests of Minnesota’s 125
municipal electric utilities, and its 31 municipal gas utilities. We believe that the Minnesota Public
Utilities Commission should approve the Certificate of Need for transmission lines
in Minnesota so that Minnesota consumers can receive the power generated by
the Big Stone II plant. (The plant
itself would be located in South Dakota and the permitting process in that
state is proceeding in an orderly fashion.
The Minnesota proceeding is merely for a certificate to build
transmission lines in Minnesota to serve the plant, in addition to carrying
wind energy.) A total of 103 not-for-profit municipal
utilities in four states, including 44 in Minnesota, are participants in the
Big Stone II project along with two investor-owned utilities. The stakes for these communities, as well as
Minnesota and the region, are very great.
We are all now sadly familiar
with gasoline prices approaching and exceeding $4 a gallon, and the impact of
those prices on our personal finances and the economy. Meanwhile, the price for natural gas has
increased more than 70% in less than one year. If we aren’t able to build plants like Big
Stone II, the alternative is ever more reliance on natural gas. Do we really want to put our homes,
businesses and local economies in competition with large electric generating
facilities for natural gas? We think
not. We agree with the staff of the
MPUC who said, “The real choice in this case is between building the proposed
lines – thereby enabling Minnesota to access needed renewable and
out-of-state coal generation – or forcing the utilities to rely more on
natural gas to produce electricity . . . the latter option is already having
huge effects on the cost of electricity.” Project opponents claim that we
can meet our needs by using renewables and energy conservation. We support renewables and conservation, but
by themselves they are not enough. The
Big Stone II co-owners are already assuming they will achieve the renewable
energy targets and energy conservation goals set by the 2007 Legislature. Even with conservation and renewables,
facilities like Big Stone II and its transmission are still needed. Wind generation is a good resource for some
of our needs, but it is not reliable enough to be the entire answer. And remember, the Big Stone II transmission
lines will help the development of wind power by carrying wind energy to
Minnesota’s consumers. Conservation is
a good investment and enables us to get by with producing less energy. But conservation itself does not provide
the power we need to live and work in 21st Century society. Like most public policy
issues, it comes down to a question of balance. In responding to climate change, we don’t
want to force electric utilities to burn ever-increasing quantities of natural
gas – the unfortunate consequences of that policy choice will be sharp
increases in electricity prices and
heating bills. The dual challenge of
responding to climate change and ensuring a reliable, reasonably priced
supply of electric energy is a very big job.
To accomplish the task, we will need to use all the tools at our
disposal. We will need to place
increased reliance on renewables and conservation. We will need to develop some new natural
gas generation. And yes, we will also
need to develop some new coal generation.
A balanced portfolio is our best option for securing our energy future. All things considered, after a
review process that has already taken two and a half years, we believe the
Commission should approve the Big Stone II transmission lines, and soon. Signed: The
Minnesota Municipal Utilities Association GAO Press Release Minnesota Rep. Jim Oberstar and Sen. Mark Dayton have requested the US Government Accountability Office (GAO) to investigate causes of high wholesale electricity costs in the Midwest. In a letter to GAO Comptroller David Walker, Rep. Oberstar and Sen. Dayton expressed concern over recent developments regarding Independent System Operators (ISOs) in the country, including the Midwest Independent System Operator (MISO). Specifically, they urged the GAO, an investigative arm of Congress, to ask some tough questions of MISO, including how high start-up costs and administrative expenses add to consumers’ energy burdens, and why prices within the MISO region are often “volatile and unpredictable.” MISO, located in Carmel, Ind., controls more than 100,000 miles of transmission lines and more than 100,000 megawatts of electric generation over approximately 1.1 million square miles, a region that stretches from Pennsylvania to Montana and from Missouri to the Canadian province of Manitoba. It also operates the Midwest Energy Market. Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) were formed by the Federal Energy Regulatory Commission to operate regional electricity grids and to eliminate discrimination in electric transmission service among utilities. ISOs and RTOs now stretch from New England to California, and they oversee two-thirds of our country's electricity grid. “ISOs and RTOs were supposed to save consumers millions of dollars every year,” Rep. Oberstar and Sen. Dayton said in their letter. “Unfortunately, they seem to be costing consumers millions of dollars instead.” Many Minnesota municipal utilities and communities are finding it more difficult than ever to secure reliable, reasonably priced wholesale power. That was not what Congress envisioned when it passed the Energy Policy Act of 1992, which, among other things, led the electric utility industry into a period of serious transition--and to confusion, dysfunction, and upheaval. The Energy Policy Act of 2005 did little to address this serious trend, said Rep. Oberstar and Sen. Dayton. For example, utilities throughout Minnesota are experiencing continually rising costs from their participation in the MISO. MISO began providing selected transmission services in 2002 and began full energy market operations in April, 2005. In recent proceedings at the Federal Energy Regulatory Commission, noted Rep. Oberstar and Sen. Dayton, participants in MISO markets have expressed their concerns over the high costs of doing electricity business throughout the MISO region. Rep. Oberstar and Sen. Dayton asked for the GAO study in response to concerns expressed by the Minnesota Municipal Utilities Association (MMUA). MMUA represents the interests of the state’s 126 municipally-owned electric utilities. “This study will address market design issues and other serious challenges facing wholesale electricity markets across the country,” said MMUA Executive Director Jack Kegel. “These challenges include rapidly increasing and highly volatile wholesale power prices to many Minnesota municipal utilities, spiraling ISO administrative costs, the failure of ‘market signals’ to ensure generation resource and transmission adequacy and the near-impossibility of obtaining long-term transmission access at stable and reasonable rates.” “It is time,” concluded Kegel, “to take stock of electric restructuring policies and to make badly needed ‘mid-course’ corrections to fix existing ISOs and protect electric customers.” |
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Minnesota Municipal Utilities Association
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