Minnesota PUC seeks input on revised ‘externality’ figures

The Minnesota Public Utilities Commission on Oct 14 went out for comment until Nov. 8, with reply comments due by Nov. 18, on a proposal by several environmental groups to hike environmental externality penalties that haven’t been revised since the mid 1990s except for inflation.

Externalities, which are assigned negative values for things like CO2 and other emissions, tend to penalize fossil-fired projects in resource reviews at the commission, and favor non-emitting projects like wind and solar. The groups hinted that externalities could play into the commission’s ongoing review of a life-cycle study of the coal-fired Sherburne County Units 1 and 2. Xcel Energy has said that this study supports continued life for these aging units, while environmental groups say the units should be shut and replaced with cleaner alternatives.

The commission is seeking comment on whether it should:

  • grant the motion of the environmental groups to start a proceeding to establish and update environmental values, and if so, should the scope of the issues addressed in the proceeding be as recommended by those groups?
  • engage a consultant as recommended by the petitioning groups?
  • refer the matter to the Office of Administrative hearings or set some other procedure?
  • set a 12-month deadline for a decision?

In 1993, legislation was enacted that required the commission to the extent practicable “quantify and establish a range of environmental costs associated with each method of electricity generation” which are to be used, along with other external factors, when evaluating resource options in all proceedings before the commission. Initially the commission established interim values effective March 1994 and then established more permanent values in 1997.

In 2000, the commission examined whether certain values should be updated or added, and ultimately decided to update the existing values annually to reflect inflation.

On Oct. 9, the Izaak Walton League of America-Midwest Office, Fresh Energy, Sierra Club, Center for Energy and Environment, Will Steger Foundation and Minnesota Center for Environmental Advocacy filed a motion asking the commission to: establish environmental cost values for PM 2.5 emissions; establish environmental cost values for SO2 emissions; and update the current cost values for CO2 and NOx.

“The State is poised to make important, long-term decisions about major investments in its energy future—decisions that will affect generations of Minnesotans,” said the groups in their Oct. 9 request. “It is imperative that decision makers have sound, up-to-date information about the costs and consequences of electricity resource choices. This requires the [commission] to reconsider the environmental cost values it adopted by order nearly two decades ago and still uses in resource decisions. Because those values are outdated and no longer scientifically defensible, it is urgent that the Commission move quickly to establish new values, especially for pollutants that impose significant costs on human health and the environment.”

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.