CHP Bill Discussed in House Energy

On Monday, the House Job Growth and Energy Affordability Committee discussed HF 813, which would add combined heat and power (CHP) and cogeneration facilities to the definition of new large energy facilities that are allowed to be constructed and not subject to greenhouse gas emissions offsets.

FTB Energy said it is economically feasible to double CHP over the next twenty years.  The MN Chamber said CHP is an important resource to its industrial members; CHP is good for the economy and reduces greenhouse gas emissions.

MMUA’s Bill Black noted that when a large industrial customer makes up a large part of a utility’s total load, this bill creates a problem.  If the utility no longer receives revenues from the industrial customer, the utility is forced to recover capital costs from other customers.  Deb Birgen of MRES noted that this bill is a problem under 111(d). The CHP unit would not be built or owned by a utility, but the utility would have to make up for its greenhouse gas emissions to meet the state’s mandated reduction.

Xcel Energy expressed concern that this bill facilitates new CHP outside of emissions regulation and utilities’ planning processes.   The Department of Commerce is in the process of establishing a statewide CHP plan, which is due at the end of the year, so there is no reason to put the cart before the horse.  The Sierra Club also testified against the bill, noting the bill was too broad in scope and too narrow in focus.

Bill author Rep. Bob Loonan (R-Shakopee) noted that the 111(d) final rule and Minnesota’s implementation plan are important factors to consider.  He said we may want to delay implementation of the bill until those factors are known.  He referenced MMUA and our concern with capital cost recovery as something to also be considered.

The bill was laid over for possible inclusion in a future omnibus.  MMUA Government Relations staff will continue to monitor the CHP discussion and express our members concerns with the proposal.

House Hears DER Policy Bill

Late Wednesday evening, the House Job Growth and Energy Affordability Committee gave the House version of the DER policy bill (HF 1678) a hearing.  Quickly and without member debate, several amendments were added to the bill, including increasing the CIP goal to 2%.

As introduced the bill, contained:

  • Increasing the Renewable Energy Standard to 40% by 2030
  • Adding a propane end user program to the state’s energy assurance plan (for emergency situations)
  • Implementing changes to siting solar farms, allowing counties and cities to site solar farms up to 25 MW in size and PUC siting authority for larger projects.

The Petroleum Marketers of Minnesota, Flint Hills Resources, and MREA expressed concern with the energy assurance plan.  Wind on the Wires and Fresh Energy testified in support of the RES increase.  Great River Energy, Minnesota Power, Otter Tail Power, and the MN Chamber of Commerce testified in opposition to 40% by 2030.

Following the testimony, there were no questions or discussion from committee members.  The bill author Rep. Melissa Hortman (DFL - Brooklyn Park) acknowledged that the controversial provisions of the bill, namely the RES and CIP mandate increases, would not be added to the omnibus bill (because Republicans hold the majority and the chair has indicated his opposition).  She proposed that the number of testifiers therefore be kept small and even between advocates and opponents, and the chair agreed.  The bill was laid over for possible inclusion in a future bill.

MMUA Government Relations staff will continue to monitor the House’s energy policy discussions.  Chair Garofalo has not yet unveiled his plans, but since Friday 3/27 is the deadline for policy bills to move forward, it is apparent he doesn’t plan to assemble an energy policy omnibus as did the Senate.  It is likely he may include some energy policy provisions in his committee’s budget bill.

Utility Crossing Fees Discussed in Senate Committees This Week

On Tuesday, the Senate Environment and Energy Committee discussed SF 877, which would establish a $750 crossing fee for utilities crossing railroad right-of-way. Authored by Sen. Dan Sparks (DFL-Austin), this bill addresses the issue of the inconsistent and “ransom level” of crossing fees that railroads charge utilities.  MREA and the MN Telecom Alliance explained that although an unofficial $750 crossing fee has been in place for over twenty years, railroads will sometimes charge tens of thousands of dollars in crossing fees, with little rhyme or reason as to why.  MREA explained that whenever co-ops suggest they will go through the extensive Department of Commerce process to determine the appropriate crossing fee, railroads always agree to the $750.  Setting the fee in statute will avoid this unnecessary back and forth.  Despite opposition from BNSF, the bill passed unanimously to the Senate floor.

On Wednesday, the Senate Environment, Economic Development, and Agriculture Budget Division heard SF 945, which clarifies that utilities are not to be charged application fees for licenses to cross public land when the telephone lines, power lines, or cables are under 100 kilovolts.  The DNR supported the bill, which was laid over for possible inclusion the Division’s omnibus budget bill.

Another Take on Solar Siting

Also late on Wednesday, the House JGEA Committee discussed HF 1745, which makes changes to solar siting procedures.  The bill requires a 400 foot setback from residential property, requires the environmental review to consider the impact of the solar farm on agricultural draining systems, and asks the PUC to consider local comprehensive plans and impacts the solar farm would have on nearby airports and highways in its permitting.  The bill also requires local government approval of the project before permits can be issued.

Bill author Rep. Chris Swedzinksi (R-Marshall) said that this bill would provide more local consideration when solar farms are sited.  The Farm Bureau testified in support of the bill.  DER Assistant Commissioner Bill Grant said he preferred the solar siting process outlined in the DER’s policy bill, but he would continue to work with the bill author.  HF 1745 was laid over for possible inclusion in a future bill.

Legislature Starts Easter/Passover Break

Friday, March 27 is the last day of legislative activity until Tuesday, April 7.  Legislators will be home in their districts for Easter/Passover break.  This break is a great opportunity to touch base with your local legislators about your utility’s concern with increasing the Renewable Energy Standard and CIP!