March 14, 2018

6 Predictions For Energy Policy At the 2018 Minnesota Legislature


The 2018 session looks to be an off year for energy issues at the Minnesota Legislature. Democratic Gov. Mark Dayton is largely focused on bonding, clean water and a myriad of other issues. But his agenda will be limited by a Republican-dominated House and divided Senate. While no one is circulating big ideas on energy, a handful of issues are likely to come up, including biomass and energy storage. With that in mind, here are six modest predictions for energy this session:

Energy storage bridges the partisan divide

Minnesota has a couple of energy storage projects planned but advocates would like to see a more organized, incentivized approach. A study in Massachusetts jumpstarted battery storage there, and some think a similar effort could do the same in Minnesota. A group of lawmakers led by Republican Rep. Pat Garofalo, chair of the House Job Growth and Energy Affordability Policy and Finance committee, recently visited Tesla’s offices in California to discuss energy storage. Last year the legislature ended the Made in Minnesota Solar Incentive program, freeing up money in a renewable development fund for a potential battery storage pilot.

The state’s RPS is staying where it’s at, for now anyway

Minnesota created its 25 percent by 2025 renewable portfolio standard in 2007 and hasn’t updated it since. The main champion for increasing it to 50 percent by 2030 was former Lt. Gov. Tina Smith, who was appointed last year to replace U.S. Sen. Al Franken. Without Smith to lead the charge and with the session slated to be short this is probably not the year for updating the targets.

Biomass gets a hearing, but what comes of it is less certain

Last year the Legislature, at the request of Xcel Energy, closed three biomass plants that sold electricity to the utility. The Department of Employment and Economic Development issued a draft report recently looking at the economic impact of the closure of a biomass plant that burned turkey waste in Benson. The report details lost jobs for plant workers and suppliers but predicts a net overall positive impact for Benson. To help make communities impacted the lawmakers allocated $54 million last year — $20 million of it for Benson and the rest for two northern communities where woody biomass was burned for electricity. How that money gets spent, and on what, may arise during the session.

Volkswagen settlement funds spur EV funding talk

Minnesota lags similar-sized states like Washington, Oregon and Colorado in electric vehicle adoption. Advocates think the state should help build out a fast-charger network, a strategy embraced by states with greater numbers of EV drivers. There will be some money for that type of build-out from the state’s Volkswagen settlement, but a bit more would help. The settlement should boost for electric and propane school buses, too, as well as heavy duty on-road non-diesel vehicles.  A few bills around the settlement have been introduced that would give the Legislature some say in the agreement but it’s hard to say if any will pass. 

If utilities don’t share their tax savings, lawmakers will make them

The federal tax bill is poised to save Xcel Energy, as well as Minnesota Power and Otter Tail Power, hundreds of millions of dollars. Who gets the cash? Should only investors benefit? Good questions. Regulators are studying it, but the legislature, sensing a potential score in an election year, might put a little back into consumers’ pocket if regulators don’t.

Property Assessed Clean Energy (PACE) picks up steam

Commercial PACE loans have been available in Minnesota for years through the St. Paul Port Authority. Now a residential PACE option looks like it has a good chance of passing this year, advocates say. The program would allow homeowners to finance energy efficiency improvements and solar panels on their property tax bills over as long as 20 years. The advantage? PACE loans finance improvements 100 percent, so homeowners put no money down.

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