Minnesota clean-energy legislation has one more obstacle this year with coronavirus

Minnesota lawmakers are once again jockeying to craft new clean-energy legislation. And while they seem to be trying harder to reach an agreement this year, it's not clear whether they will move beyond last year's deadlock.

The efforts to contain the novel coronavirus — and deal with its consequences — could end up scuttling the whole effort as well.

Energy committees in both branches of the Legislature have passed bills aimed at furthering carbon-free power goals, with critical differences in the visions of the DFL-controlled House and the Republican-controlled Senate.

Still, "the fact that both bills have moved early in the session through committee is a positive," said Justin Fay, government affairs director for Fresh Energy, a St. Paul-based clean-energy research and advocacy group.

But Fay and another legislative observer said recently that the coronavirus threat has led to a "wait-and-see" attitude for pending legislation.

"[Lawmakers] are reprioritizing, and I am not sure if they will get to energy," said Annie Levenson-Falk, executive director of the rate payer watchdog group Citizens Utility Board of Minnesota.

Both bills seek to move the state's electric utilities — which have already made progress toward clean-energy targets — further down the carbon-free path. But one key difference between the Senate and House approaches is what counts as carbon-free power.

For instance, the Senate bill includes carbon capture, a technology that enables fossil-fuel power plants to capture and store carbon dioxide created from electricity generation. The technology is still in its infancy, but Minnkota Power is studying a $1.3 billion facility next to a large coal plant in North Dakota.

Grand Forks-based Minnkota is a wholesale electric co-op that is prominent in northwestern Minnesota. Minneapolis-based Xcel Energy, the state's largest electric utility, has said it's open to carbon-capture technology in the future if it proves cost-effective.

But environmental groups see carbon capture as way to perpetuate fossil-fuel industries.

The Minnesota Environmental Partnership, a coalition of environmental and conservation groups, has called the Senate proposal "false advertising" because it allows projects to qualify even if they capture only 80% of the greenhouse gases they produce. The House bill has no carbon-capture provisions.

Environmental groups also have taken issue with the Senate's inclusion of garbage burning as a form of renewable energy, as well as its proposed rescindment of a state ban on new nuclear power plants in Minnesota.

Xcel Energy's nuclear generators at Monticello and Prairie Island provide more than 20% of Minnesota's power, and Senate Republicans have sought for the past few years to end the new nuclear ban.

"Are we going to build a new Prairie Island and Monticello?" said Sen. David Senjem, lead author of the Senate clean-energy bill. "No. It would be too expensive and couldn't compete with renewables."

But much smaller and more cost-efficient nuclear generators — currently under development — could be a carbon-free solution in the future," Senjem said.

Environmental and clean-energy groups generally support the House energy bill. Steve Morse, executive director of the Minnesota Environmental Partnership, called it a "good bill" that "accelerates" Minnesota's policy commitments to carbon-free energy.

John Reynolds, energy policy director for the Minnesota Chamber of Commerce, said the chamber has been closely following energy legislation in both chambers. "Our members support renewable energy, but we are also concerned about reliability and affordability."

The reason: Massive utility investments over the past decade in everything from new transmission projects to nuclear plant refurbishments to renewable energy.

Levenson-Falk said some language in the Senate clean-energy bill is not friendly to residential rate payers.

Specifically, she pointed to a provision that emphasizes "cost-of-service" in rate-making by Minnesota public utilities regulators. "The language here is intended to shift costs from large customers to others including residential," particularly in northeastern Minnesota, she said.

Still, Levenson-Falk said that unlike in 2019, there seems to be more of an effort this year by the House and Senate to work toward a compromise. Both bills encourage the use of Minnesota labor on renewable energy and would help communities slated to lose coal plants due to early shutdowns in the 2020s.

"It is promising that both the Senate and the House are moving forward seriously with an eye toward a conference committee," Levenson-Falk said.

Mike Hughlett • 612-673-7003