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Minneapolis has historic opportunity to define and achieve a new energy future

This summer the City Council demonstrated sound leadership when it decided to fully engage in the conversation about energy. That conversation about building a clean, affordable, reliable energy future succeeded in bringing our energy partners to the table. Thanks to the new commitments that resulted from that, last week the City Council chose to refrain from asking the voters for authorization to form a city-run energy utility this November, and instead voted to move forward on a new path for better energy.

After heated debate, intense community organizing, a wealth of media attention and the longest public hearing the Council has held this year, we believe that this is a historic opportunity to define and achieve a new energy future for our city.

There is little doubt that the people of Minneapolis want the energy we use to be affordable and reliable. But now more than ever, people are expecting and demanding that we do more to address climate change. We believe that this is one of the most critical crises facing our city, our country and our planet. If we are to limit the damage of climate change, we need to act quickly and boldly – the status quo just isn’t good enough. That’s why we are glad to see that energy policy has become a priority issue in Minneapolis among all stakeholders.

Minneapolis has a long history of leadership on climate change. Just this June, the City Council unanimously adopted an aggressive Climate Action Plan that lays out a roadmap for reducing citywide carbon pollution by 30 percent by 2025.

But we have not yet meaningfully addressed our carbon emissions. Up until this point, we have not placed a high enough priority on holding ourselves and our partners accountable to work toward meeting the ambitious goals we have set for Minneapolis’ increasing leadership on environmental justice.

In June, we voted to hold a public hearing on our city’s energy future. Since then, the city has made unprecedented progress toward meeting our energy goals. Both CenterPoint and Xcel have committed to partner with the city on reducing carbon pollution by 30 percent. Each utility has come to the table with new ideas for ways to help residents and businesses save energy and money.

Cam Gordon
Cam Gordon

CenterPoint has committed to explore allowing Minneapolis ratepayers to pay for energy efficiency upgrades right on their gas bills, expanding efficiency programs in homes and apartment buildings, and working with their suppliers to reduce the amount of methane (a greenhouse gas more than 20 times more potent than CO2) leaking out of the natural gas system. They have also signed onto the city’s goals for racial equity in employment.

Xcel has committed to increase renewable energy by making it easier for solar projects to connect to the grid and implementing a “community solar” program that will allow residents with shady yards to partner on solar projects on nearby homes and businesses. It is now also exploring a solar installation at its Riverside power plant in North Minneapolis, and best of all, it is willing to explore letting the city own renewable energy outside the city limits to power our street lights and other infrastructure.

Betsy Hodges
Betsy Hodges

All of this progress has come from the City Council’s decision to make energy a priority. We are pleased to say that this last Friday, the Council followed through, unanimously adopting a robust framework we coauthored for our energy future. Because of that framework, the city is now committed to develop a clear energy vision through our Energy Pathways Study, to fight at the Legislature for the flexibility we need to include that vision in our franchise agreements, to start negotiating those agreements now and, most importantly, to keep all of our options open. The City Council will hear a report in June of 2014 on the progress of franchise negotiations, and will have the flexibility to pursue other options if those negotiations have not produced tangible results.

Now is the time for people and businesses to join the conversation about what kind of energy future we want for ourselves and future generations. How do we keep energy costs down and increase reliability while transitioning away from non-renewable energy? How can our utilities put more decision-making power in the hands of consumers, to use energy more efficiently and to use more renewable energy? How can we improve our electrical grid so that it isn't so vulnerable to the storms that climate science says will be getting more frequent and severe?

It’s great that the City Council and the natural gas and electric utility companies have agreed to be collaborative partners in making the energy we use cleaner, more affordable, and more reliable. Now and into next year, it will be up to all of us to make the most of this incredible opportunity to find and take the best path to a new energy future.

Cam Gordon represents Ward 2 on the Minneapolis City Council. Betsy Hodges represents Ward 13 on the City Council and is a candidate for mayor.

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Comments (8)

"How do we keep energy costs

"How do we keep energy costs down and increase reliability while transitioning away from non-renewable energy?"

You do that by avoiding intermittent, diffuse, low density, and expensive sources like wind and solar.

Wind 20% cheaper than nuclear, 13% cheaper than coal

Total system levelized cost ($/MWh) - without subsidies
Wind 86.6
Conventional Coal 100.1
Advanced Nuclear 108.4

http://www.eia.gov/forecasts/aeo/electricity_generation.cfm

Intermittency is already accounted for in the design of distributed wind and solar. Neighboring Iowa now gets 31% of its electricity from wind with no problems and has the nation's 7th cheapest electricity.

"Diffuse" and "low density" are redundant, also not really relevant. Monticello nuclear has a density of 24,349 MWh/acre, compared to 12,541 MWh/acre for Buffalo Ridge II. We have more than ample land to accomodate wind generation. Of course wind doesn't run the risk of a 310 square mile permanent exclusion area from a Level 7 nuclear incident at a plant now and forever generating 0 MWh/yr. Nor would it cause 300,000 people to become evacuees from their homes and communities and cost hundreds of billions of dollars.

Solar is usually installed on rooftops, not used as utility-level generation, and thus doesn't have a net impact on land use. It also has a high net present value return on investment over the life of a typical system, given prices that have dropped precipitously over the past decade.

Bloomington doing very little ;-(

So glad to see the efforts Minneapolis is doing. Hope all Bloomington residents will ask their city council representatives what we are doing. Also candidates running for election this year. IMHO we have sat on our duff far too long doing little. Really sad.

Windsource

Xcel Eneregy has a program called Windsource where you pay extra to subsidize high cost wind power.
Take away the Production Tax credit of $23 mwh and the wind business goes as quiet as those wind turbines on a muggy summer day when all ACS run, and there isn't "a breath of air".

Direct subsidies per the EIA

Subsidies per million barrels of energy produced:

Oil and gas - $0.28 cents
Coal - $0.39
Nuclear - $1.79
Wind - $32.59
Solar - $63.00

In 2012, wind and solar combined produced a little over one quad of the approximately 100 quads
of energy consumed in the U.S. Wind energy is growing rapidly from its small base, but as it does it gets harder to find good locations as the best wind sites get used first. Wind and solar farms have a useful life in the 25 year range, compared to 60-80 years for other power sources.

Voluntary v Involuntary subsidies and wind 20% less w/o subsidy

Windsource is a VOLUNTARY way for Xcel customers to ADD wind capacity to Xcel's fuel mix ABOVE what they already have. It's tiny compared to what they buy on the open market and self-generate. Windsource's effective cost to me has been 4 pennies per day. 4 pennies. In a year, that adds up to the cost of a couple beers. It's nothing compared to the total utility bill.

With nuclear, Minnesota ratepayers are FORCED to subsidize nuclear, through Xcel and the PUC collaboration, to the tune of hundreds of millions of dollars to keep Monticello running and get a small increase in capacity. Ratepayers have already been paying for this in advance of the PUC's decision to once again push up rates.

This of course is in addition to all the other massive subsidies nuclear receives and has since its inception.

As covered in the EIA document on total costs, EXCLUSIVE OF SUBSIDIES, wind is 20% cheaper than nuclear.

Until the Federal government passed loan guarantee legislation, not a single nuclear plant had been commissioned in the US since the 1970s. That's what the free market thinks of nuclear -- too costly without permanent taxpayer assistance, unlike wind. The existing tax credit only applies to producers selling to other parties (eg, not Xcel selling to itself) and lasts only 10 years. So critiquing wind subsidies is a red herring if promoting nuclear.

Claims of useful life of nuclear at 60-80 years has no empirical basis, either. Nuclear power hasn't even been around for 80 years yet. Just witness the very expensive current uprate at Monticello that Xcel is trying to foist upon ratepayers. These changes have 20 year lifespans, just like original construction. One will never see a nuclear advocate discuss the economics or useful life of the Fukushima facility, with costs in the hundreds of billions, if not trillions, when considering all impact costs - including the idling of of Japan's nuclear plants for an extended period of time. This is the problem with having high reliance on such technology. Crippling events like that, that adversely impact the lives of hundreds of millions of people, simply isn't possible with wind and solar.

17 states generate both wind and nuclear power. Over the past year, in Iowa, they generated 3.4x more electricity from wind than from nuclear. Texas, Kansas, California, and our own Minnesota are also all on track to have wind exceed nuclear in net generation in the very near future.

In terms of variability, nuclear isn't as stable as its supporters like to claim. Over the past 12 months, the standard deviation of monthly output ranges from 7% in Illinois to 51% in Kansas. The range for wind, despite its predictable seasonal variability, has a similar range of 23-58%. Wind had less variability than nuclear in monthly output in Iowa, Kansas, Missouri, and Nebraska -- all states with excellent wind resources. Minnesota, New Hampshire, and Texas all had minor differences in month-to-month variability between wind and nuclear.

Finally, public opinion. According to a recent Gallup poll, 76% of Americans believe the US should put *more* emphasis on solar, 71% say that for wind, compared to a minority (37%) who feel that about nuclear. Solar and wind both have majority support from Republicans, Independents, and Democrats. Nuclear has no majority support among any of those three. Even coal is more popular with Republicans than nuclear.

http://www.gallup.com/poll/161519/americans-emphasis-solar-wind-natural-...

One thing Minneapolis could

One thing Minneapolis could do is convince both CenterPoint and Xcel to stop penalizing utility customers for NOT using gas and electricity as much as they used to. One of the major factors in the past few rounds of rate-increase requests by both utilities is that they can't make a double-digit return on equity for their investors when Minneapolis (and Minnesota) customers keep conserving and using less and less of their product.

They get a steady return through massive and repeated increases in the basic fee charged of each user. That punishment of the end user's conservation of energy must cease.

Actual subsidies, from the EIA

Here are the subsidies for nuclear, wind, and solar, for FY2007 and FY2010. As noted in the EIA report, FY2010 subsidies include stimulus program dollars (from the ARRA) and much of the boost for wind and solar came from accelerating payouts for 10 years of production tax credits by taking a one-year grant instead.

To arrive at these realistic numbers, one takes the average generating capacity CHANGE for calendar years 2006-2008 and 2009-2011, then calculates the expected output over the useful life (30 years) at the average capacity factor for each fuel source. Here are the results.

Total subsidies (in millions of dollars):
Nuclear 4,213
Wind 5,462
Solar 1,313

Subsidies per kWh
Nuclear $0.042
Wind $0.006
Solar $0.064

Note that wind's actual subsidies are 1/7 that of nuclear per kWh and that solar's total subsidies are less than 1/3 that of nuclear.

Difference in ratios between oft-claimed and actual subsidies per unit of output
Wind-to-nuclear claim 18.2 to 1
Wind-to-nuclear actual 0.15 to 1
Overstatement 121x

Solar-to-nuclear claim 35.2 to 1
Solar-to-nuclear actual 1.5 to 1
Overstatement 23x

Sources:
http://www.eia.gov/analysis/requests/subsidy/
http://www.eia.gov/electricity/annual/archive/03482010.pdf
http://www.eia.gov/electricity/annual/pdf/epa.pdf