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‘An absolute failure’: Why the Legislature’s energy and climate budget does a whole lot of nothing

Despite a fair bit of common ground between House DFLers and Senate Republicans, a conference committee on the topics deadlocked.

The group had representation from middle- and high-schoolers from across the state, who had organized largely through social media.
MinnPost photo by Erin Hinrichs
Minnesota youth filled the hallway outside of the governor’s reception room at the state Capitol on Jan. 9, waiting for their first meeting with Gov. Tim Walz.
As budget deals have been struck in Minnesota’s politically divided Legislature this year, partisan bickering and sour feelings have mostly given way to warm talk of hard compromise and across-the-aisle cooperation.

Not so for lawmakers who negotiated climate and energy issues this week. Despite a fair bit of common ground between House DFLers and Senate Republicans, a conference committee on the topics deadlocked, primarily over a controversial solar program and a rule aimed at making power companies prioritize clean energy, said Sen. David Osmek, R-Mound.

The result was a remarkable budget pact with little new policy and tens of millions of unspent dollars from a nuclear-waste fee paid by Xcel Energy meant for renewable energy projects.

Leaders in both parties blamed the other on Thursday. “It was a collision course between the fossil fuel industry and our children’s future and our bill died in the crash,” said Minneapolis Rep. Jean Wagenius, chairwoman of the House Energy and Climate Finance and Policy Division.

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Osmek, chairman of the Senate’s Energy and Utilities Finance and Policy Committee, said the House failed to bend on policies that amounted to an expensive “radical environmental wishlist,” sinking the chances of less controversial spending. “This energy section is an abomination. An absolute failure,” Osmek said of their work.

Referring to the Senate, he added: “And it isn’t because of this body.”

Very different agendas — with some common ground

House Democrats did indeed have an extensive wishlist heading into budget negotiations. That included policy to require a carbon-free power grid by 2050; expand Minnesota’s community solar garden program; put solar on K-12 school roofs and in state parks; buy electric buses for Metro Transit; and give a rebate to people who buy electric cars. Nearly all of that would have been paid for with money from Xcel’s Renewable Development Account, which the utility funds as part of a deal to store nuclear waste in the state.

DFLers also wanted to change state regulatory policy so that utility companies adding new power sources had to give renewables a far stronger preference. The idea has been referred to as “clean energy first.”

To build support for the DFL agenda during the legislative session, Wagenius held a slate of hearings on the effects — present and future — of human-caused global warming in Minnesota. And meteorologist Paul Douglas even testified in a conference committee meeting earlier this month to brief lawmakers on the science.

State Sen. David Osmek
MinnPost photo by Peter Callaghan
State Sen. David Osmek, chairman of the Senate’s Energy and Utilities Finance and Policy Committee, said the House failed to bend on policies that amounted to an expensive “radical environmental wishlist.”
But Republicans had their own ideas for energy policy — and a different plan for how to spend the Xcel money. The GOP’s budget plan reserved more of the funds for the Prairie Island Indian Community’s push to reach net-zero emissions — which Republicans support since the tribe sits next door to one of Xcel’s nuclear plants and its waste. The GOP proposal also pledged a smaller chunk of cash for the solar-on-schools initiative, and the party booked money for a task force on green roofs and for a loan fund to help people build electric vehicle charging stations.

Republicans also wanted to make disrupting oil pipelines or altering their equipment a felony, reserve $40 million to help businesses affected by the early closure of an Xcel biomass power plant in Benson and sharply limit the solar garden program, which Xcel has said is costly for customers and not the cheapest way to build solar. Sen. David Senjem, R-Rochester, introduced a more conservative “clean energy first” bill this year, too.

In the end, the few energy policies that emerged from negotiations between the House and Senate included a pilot project and other provisions to improve renewable energy storage and a task force on diversity in the energy-sector workforce.

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The millions of dollars in Xcel’s renewables fund will sit unspent until, perhaps, the next legislative session.

Let’s play the blame game

So what happened?

Wagenius painted the GOP as climate-science deniers set on obstructing any green energy progress to favor fossil fuel industries during negotiations. As evidence, Minneapolis Rep. Jamie Long, the vice chairman of Wagenius’ committee, pointed to a House vote in April on legislation that simply declared “greenhouse gas emissions resulting from human activities are a key cause of climate change.” All 75 Democrats voted for the measure, along with four Republicans. Five GOP lawmakers didn’t vote, while another 50 Republicans voted against the one-sentence bill.

“If one party believes that we are facing a huge present challenge with climate change and the other doesn’t, then that makes it difficult to prioritize moving forward,” Long said.

State Rep. Jamie Long
State Rep. Jamie Long
The Minneapolis DFLer said Republicans did not compromise on climate issues like they have elsewhere in budget negotiations since the climate and energy conference committee was focused on policy and how to spend the Xcel money — not over tax increases or the balancing the overall state budget. Long said the threat of a government shutdown was therefore never a factor. “I think that it means if we want a different outcome, we’re going to need different senators,” Wagenius said.

Osmek had a far different view of negotiations. He said Republicans honored requests by Democrats during negotiations to remove “non-starter” policy, including the stiffer pipeline protester penalties and a measure to lift Minnesota’s moratorium on new nuclear power plants. But the DFL, Osmek claimed, did not return the favor, sticking with their “clean energy first” plan time and again. Osmek said their legislation would have threatened the reliability of Minnesota’s power grid.

To underscore his claim of a partisan DFL slant during their budget talks, Osmek noted the House negotiation team on the combined jobs, climate and energy conference committee was the only group in the Legislature to not have a single lawmaker from the opposing party. (The Senate teams all had a Democrat.)

Osmek said DFLers also did not break on their push to expand the community solar garden program despite Republican concessions. The GOP has argued there are cheaper ways to build solar and fight climate change than the community program, which allows Xcel customers to buy shared plots of a third-party solar array and get a rebate on their power bill.

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Osmek has consistently argued this year that a snap transition away from all fossil fuels would create an unreliable power system, especially in extreme cold. As for his view on climate change, Osmek told MinnPost in January that Minnesota is responsible for a small fraction of global carbon emissions and said lawmakers should be cautious about taking actions that harm the state’s economy for carbon reductions that are small on a global scale.

At 1:30 in the morning on Tuesday, after the Legislature adjourned its regular session, Osmek said he offered to come to an agreement on spending from the renewable development account — leaving out the most contentious policy issues. His offer, he said, included the biomass plant legislation, the Prairie Island net-zero project and grant funding aimed at communities that lose fossil fuel plants, but largely yielded to the DFLers to spend $18 million a year from Xcel’s renewable account.

Osmek said the end result — essentially zero spending from the Xcel account, known as RDA — was “a failure of a radical House of Representatives that refused to even come to the table and have a respectful conversation.”

For his part, Long said the House did make concessions in budget talks but declined to elaborate, calling them “private offers.” He did say DFLers wanted to “stabilize” the community solar program and put some “constructive solutions on the table,” but wouldn’t accept the tough cap on projects the Senate had wanted because he feared they would effectively kill the flourishing program, which is the largest of its kind in the country.

Long said organizing around the carbon-free standard and more in the House this year was a success on its own right and chided Republicans for not doing more to support the fast-growing green energy sector and the job creation it brings.

But the overall energy package? “It was definitely a disappointing outcome for the climate and for moving clean energy forward,” he said.