2020 Legislature to offer dueling visions for energy policy in face of climate change

At a January hearing in Rochester, weeks before the Minnesota Legislature is to convene for 2020, Senate Republicans made the case for measured government intervention to promote clean energy. 

Voters increasingly support a transition away from fossil fuels, said state Sen. David Senjem, a Rochester Republican who was pitching a bill to make adding new coal and gas power tougher for utility companies. That shift is an issue “that we really can’t avoid and we’re not by any means attempting to avoid,” Senjem told a crowd gathered at the city’s Community and Technical college.

Shortly after, Rick Morris, an organizer for the Sierra Club, criticized the Republican bill as a half-measure that won’t phase out fossil fuels as fast as Gov. Tim Walz’s plan to require a carbon-free energy grid by 2050. Senjem’s measure is the “coal and gas forever bill,” Morris said.

The hearing previewed debate in the upcoming legislative session that begins on Feb. 11 over how far and how fast the state should restrict fossil fuels to reduce the effects of climate change. 

Leaders in the House, which has a DFL majority, and the Senate, which has a GOP majority, have promised to try to compromise on energy policy this year after a 2019 session that produced little. But key committee leaders remain sharply divided and some have already begun making their case for change in the November election to break a stalemate.

“I think to make change as meaningful as 100 percent (by 2050) we’re going to need new players in the Senate,” said Rep. Jamie Long, a Minneapolis DFLer, referring to Walz’s bill.

GOP agenda staked on ‘Clean Energy First’

Senjem’s bill is one of the top priorities for Senate Republicans, said Sen. David Osmek, R-Mound, who chairs the Energy and Utilities Finance and Policy Committee. 

The idea behind the measure is not a new one; lawmakers have discussed the concept for several years. But Senjem has rolled out a revised version that Osmek said has the support of the GOP and powerful interest groups. Known at the Capitol as “Clean Energy First,” the policy generally requires utility companies to add clean energy to its system when it needs to replace or increase power — unless the carbon-free or renewable option would bring “unreasonable” costs to power customers or threaten the reliability of the energy grid.

“Over time this ratcheting effect of implementing carbon-free resources whenever possible … will lead to an increasingly clean and ultimately decarbonized electricity supply to serve Minnesota in a way that protects ratepayers,” said Mike Bull, director of policy and external affairs for the Center for Energy and Environment.

A preference for clean energy exists in state law, though advocates for “Clean Energy First” say the measure will strengthen it.

Notably, and controversially, Senjem’s updated bill counts waste burning as renewable energy and lifts a moratorium on new nuclear power in Minnesota. It also includes technology to capture and store most greenhouse gas emissions from coal plants as a carbon-free option, along with hydropower.

Aside from its main provision, Senjem’s measure allows utilities to “maximize” employment of local workers and bill customers for the cost, and it directs the state to ask the regional power grid operator to study the construction of more energy transmission infrastructure.

Clean power advocates worry that a lack of transmission infrastructure in the Midwest is slowing and stopping new wind and solar projects since they can’t deliver the energy they produce.

Senjem’s bill has won early praise from utility companies that have been skeptical of tougher energy mandates, including Minnesota Power, Great River Energy and Missouri River Energy Services, for allowing an array of options to cut emissions, such as carbon capture and hydropower.

Gene Metz, chairman of the Rural Minnesota Energy Board, which represents 18 county governments in Southwest Minnesota, said he believes Walz’s bill for a carbon-free grid by 2050 would be too pricey for power customers. But the organization supports Senjem’s bill. 

Metz said the measure’s transmission study and its more gentle regulations can help boost renewable projects in his politically conservative region, which has seen an “economic boom” from wind power, while avoiding the risk of spiked energy bills.

In past years, Osmek has resisted “Clean Energy First” along with Walz’s bill, arguing the private sector is already moving to build clean energy without new state regulations. Xcel, for instance, has pledged to be carbon-free by 2050 on its own.

But he said Senjem’s measure provides worthwhile “guide rails” for the energy sector that protects ratepayers if using clean energy is too costly or unreliable. It opens the door for future use of nuclear technology for steady power in lieu of coal and gas plants, even if Osmek said he didn’t expect any new plants to open anytime soon in Minnesota. “Do Republicans believe that pouring carbon into the atmosphere is a good idea? Probably not,” Osmek said. “But how do we get there is the issue, and this is a very pragmatic approach.”

The turn is the result of months of work to revise the bill — not an eye toward politics, Osmek said. Still, Republicans hold a 35-32 Senate majority headed into the 2020 elections, and Senjem cited national polling support for renewable energy to kick off his hearing. 

The Rochester area is also crucial for the GOP. Not only is Senjem’s seat a target for DFLers hoping to flip the Senate, the city is increasingly important to statewide and congressional elections and becoming more Democratic as it grows in population.

DFL: ‘100 percent’ is still the goal

The basic premise of Clean Energy First has support from the DFL and from a range of environmental organizations. Walz proposed his own version in 2019. 

But many oppose Senjem’s new revised bill for including the carbon capture technology, as well as the nuclear power and waste burning provisions. Long, vice chairman of the House Energy and Climate Finance and Policy Division, said lifting a ban on new nuclear power is controversial among House Democrats.

And Rep. Jean Wagenius, a Minneapolis DFLer who chairs that climate and energy committee, said “defining coal as carbon-free even if it’s emitting carbon and defining burning of garbage as essentially renewable even though it will be emitting carbon” would undermine their goals.

Waste-to-energy facilities are currently included in Minnesota’s definition of renewable power, something House DFLers proposed ending last year. The governor’s Clean Energy First bill would leave that standard in place, but unlike the GOP bill, it does not lift the nuclear moratorium or include carbon capture and large hydroelectric plants as preferred energy options for utilities.

Walz’s 2050 bill sets a hard deadline to phase out emissions amid warnings from scientists of the dangers posed by climate change, but it does not rule out the use of nuclear, carbon capture and large hydropower for utilities to comply with the carbon crackdown.

Joseph Sullivan, a deputy commissioner for Walz’s Department of Commerce, told the Senate panel in Rochester that Clean Energy First is best in tandem with the carbon-free 2050 bill and another measure to promote energy efficiency. Together, the trio of legislation sends “an unmistakable signal to Minnesotans, energy producers and markets that carbon-free energy is necessary,” Sullivan said.

For House DFLers, that carbon-free by 2050 policy remains a top priority. DFLers argue wind and solar are quickly becoming the cheapest energy options and said the measure would not threaten a reliable power supply as the carbon ban kickstarts clean energy technology that is already improving.

In 2019, the House passed the 2050 bill but Senate Republicans shot it down. The chances of a change of heart in the GOP are slim, Long predicted. And some utility companies aren’t thrilled by the legislation, either. “I’m not holding out much hope this year,” Long said.

Still, Long said passing a Clean Energy First bill that both parties can agree to would be an important if “modest” step. “I’m going to push as hard as I can to make as much progress as we can on clean energy,” he said. “I think that’s what Minnesotans want and I’m hoping we have partners willing to work right along with the House.”

A repeat performance?

The biggest question for the 2020 session is whether the two parties will repeat what happened last year. 

Despite some common ground outside of the most controversial bills, lawmakers failed to pass much of any new legislation. Lawmakers also failed to spend tens of millions of dollars from a nuclear-waste fee paid by Xcel Energy earmarked for renewable energy projects. Both parties, for instance, planned to spend money to put solar panels on K-12 schools.

The cause of that impasse is disputed. Long and Wagenius said Osmek refused to rule out spending $40 million to help businesses disrupted by the closure of a biomass plant in Benson, and that he doesn’t believe climate change is an urgent crisis. “People always want you to compromise and we certainly want to do that,” Wagenius said. “But you have to start with having a common understanding of the problem you want to solve.”

Osmek said the DFL duo wouldn’t budge from their own demands to pass their version of Clean Energy First and other legislation with the Xcel Renewable Development Account spending in order to score political points with their political base. 

In a recent meeting with the governor, Osmek said Walz offered to help facilitate discussions for next year. But he said he would quickly lose Republicans if Democrats demand their own “radical plan” for Clean Energy First and carbon-free 2050 “that is not workable.”

“I’m not terribly optimistic based upon the House’s attitudes,” Osmek said. “I’ve always been somebody willing to work, but there will be lines that I cannot cross.”