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Public Utilities Commission vice chair on how regulators will approach Minnesota 100% carbon-free law

MinnPost caught up with PUC vice chair Joe Sullivan last week about whether the electric sector can hit goals in the landmark climate law and whether he’s concerned about reliability of the grid.

Public Utilities Commission vice chair Joe Sullivan: “When you throw all of the resources in today, we’re at more than half carbon-free today. So we’ve got almost 20 years to close the gap.”
Public Utilities Commission vice chair Joe Sullivan: “When you throw all of the resources in today, we’re at more than half carbon-free today. So we’ve got almost 20 years to close the gap.”

Minnesota lawmakers may have passed a law steering electric utilities toward a carbon-free grid by 2040. But when it comes to actually filling in the tricky details of how to reach that goal, it’s regulators on the five-member Public Utilities Commission who will be far more involved.

The PUC is already tasked with scrutinizing the energy mix of most utility companies. And under the landmark climate law, the commissioners have even more responsibility. For instance, they will decide what technology is considered wholly or partially carbon-free, such as biomass plants or carbon capture. That will be important as utilities like the one in Hibbing — which burns wood for electricity — determine what the future of their power supply must be.

The PUC also will decide when a utility can avoid going 100% carbon-free based on their view of when striving for that goal would risk reliability of the grid or affordability for customers.

No pressure.

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While DFL lawmakers have hailed the 100% standard as a victory in the fight against climate change, Republicans have worried deeply about whether the regulations will lead to blackouts or runaway costs on consumers and industry. 

But legislators in both parties appear to have some faith in the PUC. The five commissioners are appointed to staggered terms by the governor, and only three can be from a single party. 

The current makeup on the commission is three Democrats, one Republican and one member who is not affiliated with either party. All were appointed most recently by Gov. Tim Walz, though several joined the PUC after being appointed during the tenure of then-Gov. Mark Dayton.

MinnPost caught up with PUC vice chair Joe Sullivan last week about the 100% standard. (Chair Katie Sieben declined to comment.)

Sullivan, a Democrat, was appointed in 2020 and confirmed by the Minnesota Senate that year when the chamber still had a Republican majority. Before joining the PUC, he worked on energy issues for Walz at the Department of Commerce, and previously managed legislative affairs for the Center for Energy and Environment.

This conversation has been edited for length and clarity.

MinnPost: How’s this for a softball: Do you think Minnesota’s electric utilities can hit carbon-free by 2040? Is that possible?

Commissioner Joe Sullivan: Yes.

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MP: How come?

JS: If you look at the current trajectory that they’re on, the resource planning that we’ve put together that we’ve approved and adopted, they’re already on that path. They’re already on that trajectory. If you aggregate all of the approved resource plans that the commission has approved, we’re at over 80% carbon-free by 2030. So that’s just what is in the current plan, prior to 100% passing. 

Then, when you get into the 2030s, to go from, 80-85% to 100% carbon-free on a retail sales basis, that’s gonna involve some technologies that the utilities now know that they’re gonna have to bring to us in resource plans. We’ve taken a system that was primarily coal in 2005 and decreased those carbon emissions by 56%. That was the most recent (Pollution Control Agency) report

When you throw all of the resources in today, we’re at more than half carbon-free today. So we’ve got almost 20 years to close the gap. I have confidence that our utilities, which have really smart engineers and smart people, I have confidence in the process that we have at the commission and with the Department of Commerce and intervenors that we’re gonna be able to close it. 

MP: We’ve been having a lot of conversation at the Legislature over the idea of blackouts. Republicans have been worried about blackouts and basic grid stability. Do you have your own concerns about grid stability in the direction we’re going in the electric sector?

JS: I have concerns about reliability, always. That is a baseline function of the commission is to worry about reliability. The tools that we have to address reliability, though, are still in place. 

We do our resource planning in Minnesota. We ensure that for every 8,760 hours of the year that we’ve got the resources to meet Minnesota’s needs for those hours. And that hasn’t changed. The carbon-free standard, first of all, it’s carbon-free, so it includes resources that are not wind and solar and storage. I look at that and it’s no different than the way it was two months ago. We have the process that allows us to address reliability for Minnesotans.

So from my perspective, that’s unchanged. I’m worried about it because that’s in the job description. But I’m not more worried about it. 

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MP: A utility in the bill can request an off-ramp if they’re concerned that reaching 100% would risk affordability or reliability. And I know it will depend on a case by case basis, but does the PUC already have definitions of affordability and reliability? Is there an existing standard? What do those questions mean to you?

JS: In the statute that was passed, as well as in the renewable energy statute that was passed in 2007, there are eligible off-ramps. The utility is going to have to bring that to us, and they’re gonna have to build a case around the off-ramp and the statutory language. And then we’re going to have a deliberative process where a record will be built, where intervenors will have their say, where the Department of Commerce with all of the analysis that the Department of Commerce brings, where the office of the Attorney General will weigh in. And we will have a thoughtful, thorough process around: ‘what does that off-ramp look like,’ tethered obviously to what the statutory language is that the utility is requesting the off-ramp on.

The commissioners, like I said, they’re all deeply worried about affordability. They’re deeply worried about reliability, and those are going to be what they’re thinking about when they make the decision, about affordability, reliability, prudence.

MP: There’s been some debate also at the Legislature over whether the off-ramps as written are really meaningful, or real. Like if it’s an actual possibility for a utility to even access them. How would you respond to that?

JS: The utilities will bring us the off ramps. So when somebody says that, I don’t give that thought much credence. The utilities, if they have a problem, are going to bring us the off-ramps. I mean, there’s nothing more to it than that. It’s just real simple. You know, like they’ll look at the off-ramp that’s available and they’ll say, yep, and we’re gonna build the case around it. So is it illusory? I think that’s just hallway chatter.

MP: Utilities plan on really long timelines. How soon do you think we will be grappling with some of these questions about off-ramps or 2040 resources mixes or things like that?

JS: We’re just finishing up with the current wave of resource plans and now we’re kind of into that interregnum of when we’ll get new resource plans. And my thinking is that those resource plans are 10-year looks. So, they’ll be looking out into the 2030s and we’ll start getting a sense. But it’s hard to speculate and I don’t want to speculate. 

MP: So you don’t think we’ll be getting any off-ramp requests next year?

JS: I don’t know. … And with the renewable energy standard there had been no requests for off ramps.

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MP: The new law leaves a lot of decisions on your shoulders, but one of them is deciding what is actually considered carbon-free, whether that’s fully carbon-free or partially carbon-free. Do you know what resources you consider to be fully or partially carbon-free, or how do you go about deciding that? And I’ll just mention that, especially in the context of the biomass plant (in Hibbing) and it being perhaps an unknown?

JS: If something’s carbon-free or not, there’s going to be a process. It’s just like with the off-ramps, there’s going to be a process and we’ll have statutory guidance, and that’s what’s gonna determine it and that’s the best way to do it.