Great River Energy fights off new solar incentives in Minnesota

The Minnesota Legislature is considering several proposals that would negatively impact Great River Energy and its member cooperatives, particularly two omnibus energy bills that are making their way through the House and Senate, Great River said March 22.

Senate File 901 would establish a 2% by 2025 solar energy standard on top of the existing renewable energy standard (RES), which is one of the most ambitious in the country and is costing electric cooperatives millions every year, Great River Energy noted. The bill also includes a 1% annual assessment on the retail sales of all utilities that would be used to create a utility-administered fund for solar incentives. In addition to the 1% assessment, the Senate measure takes 5% of the Conservation Improvement Program (CIP) statutory spending requirement and creates a fund for “Made in Minnesota” solar incentives.

The Senate bill also dramatically increases the potential for cost shifting caused by distributed generation systems, Great River Energy added. The maximum size for net metering increases from 40 kW to 1,000 kW for distributed generation systems fueled by renewables, natural gas or cogeneration. It also limits a utility’s ability to recover fixed costs by increasing the size threshold for exemption from utility standby charges from 60 kW to 10,000 kW.

“Each provision leads to significantly higher energy costs,” said Jon Brekke, Great River Energy vice president, member services. “The solar mandate will require us to add expensive generation when we don’t need it and the tax-funded subsidies would require all Minnesotans to pitch in on solar installations for wealthy homeowners.”

The version of House File 956 that passed the House Energy Committee would have required utilities to purchase 4% of their electricity from solar energy and establish a goal of up to 10% from solar energy, in addition to the existing RES. The bill also included a 1.33% annual assessment on all utility sales to fund solar energy subsidies, Great River Energy said.

After the bill was proposed, Minnesota’s cooperatives joined to provide detailed analytical data on the costs and detrimental effects of such legislation. Many cooperative members contacted their representatives to express their opposition to the House bill.

In the House Commerce and Consumer Protection Finance and Policy Committee, amendments removed the most onerous portions of HF956 for cooperatives and municipal utilities, Great River Energy said. Under the amendment, cooperatives and municipal utilities would be exempted from the solar energy standard and from paying the 1.33% annual assessment. Essentially, any provision of HF956 dealing with solar or renewable energy would be an opt-in for cooperatives and municipal utilities.

“While this amendment is a good step forward, it is still just the beginning of the legislative process,” Great River Energy said. “HF956 still establishes many unsustainable policies and practices for the electric utility industry as a whole, with requirements for meter aggregation and third-party electric providers.”

Great River Energy provides wholesale electric service to 28 distribution cooperatives in Minnesota and Wisconsin. “Our generation portfolio includes environmentally sound renewable energy sources: wind energy, refuse-derived fuel and hydropower,” its website noted. “Great River Energy is looking at ways to further diversify its energy portfolio by exploring biomass, fuel cells, clean coal and other technologies as they become available. Under Minnesota’s Renewable Energy Standard we are required to produce 25 percent of our electricity using renewable energy sources by the year 2025. Great River Energy currently meets or exceeds state renewable energy requirements.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.