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After ousting labor commissioner, GOP senators turn focus to Walz’s environmental appointees

If the Senate’s recent hearing schedule for Walz appointees are any indication, Republicans are not happy with one particular aspect of the governor’s administration: the state’s environmental policy.

Senate Majority Leader Paul Gazelka, right, wouldn’t say if the GOP planned to remove Commerce Commissioner Steve Kelley, but he said Republicans would only deny confirmation to a commissioner “if they’re not doing their job.”
Senate Majority Leader Paul Gazelka, right, wouldn’t say if the GOP planned to remove Commerce Commissioner Steve Kelley, but he said Republicans would only deny confirmation to a commissioner “if they’re not doing their job.”
MinnPost photo by Peter Callaghan

After Senate Republicans voted to remove Nancy Leppink as commissioner of the Department of Labor and Industry last week, they said other appointees of Gov. Tim Walz could be in line for the same treatment.

The GOP is motivated in part by frustration with Walz continuing emergency powers during the COVID-19 outbreak, but also in part by ideological differences over the actions of Walz’s picks. If the first three hearings for the appointees are any indication, Republicans are not happy with one particular aspect of the Walz administration: the state’s environmental policy.

Commissioner Joseph Sullivan
On Tuesday, a Senate committee held an informational hearing on Joe Sullivan, the newest member of the Public Utilities Commission, which regulates utility companies like Xcel Energy and Minnesota Power. The GOP also scheduled a hearing Friday for Steve Kelley, commissioner of the Department of Commerce, an agency that acts as a consumer protection watchdog on energy and telecommunication issues. And on Monday, senators plan to review the job performance of Laura Bishop, commissioner of the Minnesota Pollution Control Agency.

The source of most frustration is contentious battles over Enbridge’s proposed Line 3 oil pipeline, copper-nickel mining and climate change policy, such as a push to enact California-style vehicle emission standards.

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State Sen. David Osmek, a Mound Republican who chairs the Senate’s Energy and Utilities Finance and Policy Committee, said he had issues with Kelley’s negotiating skills, but also his decisions to advance a legal appeal challenging the need for oil from Line 3, which is meant to replace an aging pipeline currently operating at half-capacity. 

The comments reflect broader complaints about how the Walz administration has handled projects like the $2.6 billion pipeline, which would stretch across northern Minnesota, cutting through land tribes use to hunt and fish and the Mississippi Headwaters region. 

“That continuous foot-dragging is becoming incredibly frustrating,” Osmek said. “We need to move on with this project.”

Walz’s PUC pick gets scrutinized

Sullivan was first to face a hearing this week, though it was an informal one that did not end in a recommendation to approve or deny his confirmation. 

Walz appointed Sullivan to a six-year term on the PUC in March and he has served on the job since April. Appointees to the PUC and state agencies can work indefinitely without confirmation from the Senate, though the chamber can remove the officials with a majority vote. The GOP currently holds a 35-32 Senate majority.

State Sen. David Osmek
State Sen. David Osmek
Sullivan was the governor’s second appointment to the five-member commission, which regulates energy infrastructure projects and deliberates in a similar fashion to court proceedings. Walz’s first PUC appointment, Valerie Means, was confirmed by the Senate in April.

Sullivan’s appointment came with high praise from both progressive environmental advocacy groups like the nonprofit Fresh Energy and more conservative ones, including the North Dakota and Minnesota chapter of the Laborers’ International Union of North America, which represents construction workers that help build energy projects like pipelines and wind turbines. Prior to his appointment, Sullivan served as a deputy commissioner at the Commerce Department under Kelley. 

At the hearing Tuesday, lawmakers questioned Sullivan’s work before his stint in state government. For more than four years, Sullivan was a lobbyist for the Center for Energy and Environment, an environmental nonprofit, and he also previously lobbied for Wind on the Wires, an advocacy group for the wind industry. From 2006 to 2012, Sullivan was an attorney for Flaherty and Hood, lobbying for small and medium sized cities at the Legislature and representing them in court on a range of energy and environmental issues.

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Sullivan ran for Congress in 2018 as a Democrat, hoping to replace Walz in Minnesota’s First Congressional District. He campaigned touting his clean-energy chops, but he withdrew from the race when Dan Feehan secured the DFL endorsement. Sullivan also served as a finance committee member on Walz’s gubernatorial campaign in 2018 and was an early Walz supporter. Sullivan donated more than $2,000 to Walz’s race for governor, much of it before the primary election. 

In Sullivan’s own race, leaders of clean energy groups like CEE and Fresh Energy, which commonly have business before the PUC, donated to the Democrat’s campaign.

State Sen. Erik Simonson
State Sen. Erik Simonson
Duluth Sen. Erik Simonson, the top DFLer on Osmek’s committee, who was recently defeated in a primary race by a candidate who argued for a faster transition to carbon-free energy, asked Sullivan how he separates his past advocacy and lobbying work to make difficult decisions on the PUC.

Osmek asked Sullivan if he would favor clean energy over fossil fuels in circumstances the Republican believes could threaten the reliability of the energy grid or spike prices. (Both Osmek and Simonson applied for the spot on the PUC that Walz appointed Sullivan to.)

Sullivan said he would use his skills as a lawyer to judge cases based on evidence and science while balancing energy transition, costs on energy bills, jobs at fossil fuel plants and the need for reliable power. “Balance is what is critically important in a commissioner,” Sullivan said.

During his short tenure on the PUC, Sullivan has voted to allow Xcel to run coal plants seasonally and pushed utilities to speed up clean energy projects during the pandemic to spark green jobs. In the controversial Line 3 case, Sullivan voted in June against reconsidering a Certificate of Need the PUC granted to the Enbridge pipeline, which some Minnesota tribes, environmental nonprofits and the Commerce Department had asked for. Republicans broadly support the pipeline, while DFLers are split over the project.

In an interview, Sullivan said he was worried he might be removed from his position, and highlighted his experience in the energy sector and his vote to approve a new power distribution plan for Xcel Energy, which is aimed at modernizing the electric grid, and his vote to authorize a refund for customers of the Duluth utility Minnesota Power.

GOP Sen. David Senjem of Rochester praised Sullivan’s experience at the hearing, and Osmek said in an interview that he appreciated Sullivan’s vote on Line 3. “That being said, one vote does not necessarily garner my support, nor does it mean that you’re going to be not confirmed by the Senate,” Osmek said. “It is simply one vote.”

Commerce commissioner in hot water over Line 3

Kelley, the Commerce commissioner, will face a joint hearing held by two Senate committees on Friday. He may get a colder reception than Sullivan, since the panel is being held after the Commerce Department on Tuesday said it would file a legal challenge to the Certificate of Need — a critical permit that Enbridge needs to build Line 3. The Walz administration says Enbridge did not properly demonstrate need for the oil as required by law in their application for approval.

Walz has now twice filed appeals to Enbridge’s Certificate of Need because the legal process has been restarted by court decisions. The appeal was first filed when Mark Dayton was governor.

Critics say the project will escalate global warming and result in a large new pipeline that could be a spill risk. But Enbridge and supporters of the project argue a new pipeline would be safer than bringing oil to market by rail or through the current corroding infrastructure.

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Senate Majority Leader Paul Gazelka, a Republican from East Gull Lake, said the appeal is “a huge disappointment for many of us in northern Minnesota.” He cast blame on Walz as well as the Commerce Department. “A whole lot of jobs are not going to go forward,” Gazelka said. “And these are COVID safe jobs, these are outdoor jobs.”

Beyond Line 3, Gazelka said he has heard complaints with how Kelley has handled oversight of financial institutions like banking and insurance — frustrations that will be detailed further during the hearing — and Osmek said that when Kelley served as a state Senator, he took political stances GOPers may object to.

Commissioner Steve Kelley
Commissioner Steve Kelley
Kelley was appointed by Walz in January of 2019 and most recently had worked as a Senior Fellow at the University of Minnesota’s Humphrey School of Public Affairs. He was a DFL state Senator for 10 years and served four years in the state House. (Kelley was also an early donor to Walz’s campaign for governor.)

Osmek also said he has been disappointed with Kelley’s skills as a negotiator. While lawmakers struck a deal this year to spend more than $60 million on clean energy projects, bankrolled by fees Xcel Energy pays to store nuclear waste in Minnesota, Osmek said other negotiations have been less successful. “He has a bit of a mixed bag,” Osmek said. 

Osmek declined to give an example of a Senate position Osmek views as problematic and declined to detail failed negotiations ahead of the Friday hearing.

In a statement, Kelley said he was glad to have worked with Osmek and House leaders on spending the Xcel nuclear fees on renewable energy projects and said his agency has had a successful 20 months “developing collaborative relationships with Minnesota businesses that ultimately benefit Minnesota consumers.”

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“I am looking forward to the opportunity to tell that story,” Kelley said.

Gazelka wouldn’t say if the GOP planned to remove Kelley, but he said Republicans would only deny confirmation to a commissioner “if they’re not doing their job.” And Gazelka said he went to the governor in February to say Leppink and Kelley were the two commissioners not doing their job.

MPCA “Clean Cars” rule draws Republican frustration

Bishop, the MPCA commissioner, is, for now, the last commissioner scheduled for a hearing. Her panel is set for Monday. 

Before being appointed in January of 2019, Bishop was in charge of sustainability for Best Buy after a long career in state and federal government, including jobs at the State Department and White House. (She donated to DFLer Erin Murphy in the 2018 primary race for governor while she chaired the board of Women Winning, a nonprofit that aims to elect pro-choice women to public offices.)

The GOP’s biggest frustration with Bishop is her push to implement stricter new vehicle emission standards that mirror California’s in a bid to increase electric car sales and fight climate change. While she says she can require the “Clean Cars” standards without approval from the Legislature, Republicans argue the MPCA should defer to lawmakers. The GOP says the rules could raise the up-front price of buying a car and force electric vehicles on people who don’t want them in a cold-weather climate that limits battery range.

State Sen. Bill Ingebrigtsen
State Sen. Bill Ingebrigtsen
Sen. Bill Ingebrigtsen, an Alexandria Republican who chairs the Senate’s Environment and Natural Resources Finance Committee, said the law that grants Bishop rulemaking power for the emissions standards dates back to the late ’60s. “And the late ’60s is way different than 2020, especially when it comes to automobile decisions that are big,” he said.

Sen. Carrie Ruud, a Breezy Point Republican who chairs the Senate’s Environment and Natural Resources Policy and Legacy Finance Committee, also said the GOP has concerns about the pace of approval for PolyMet, a controversial copper-nickel mine near Hoyt Lakes. The MPCA is currently defending permits for that project in the Court of Appeals and the state Supreme Court.

Darin Broton, a spokesman for the MPCA, said the agency is assessing federal changes to auto emission standards issued in April and has not formally moved ahead with Clean Cars rulemaking. An administrative law judge would have to approve any new regulations, and Broton said the soonest the rules could be implemented is when automakers can release their model year 2025 vehicles.

In a statement, Bishop touted her work with the Legislature to pass a ban on most uses of the chemical TCE, the first law of its kind in the nation, as well as efforts to create the Midwest’s first pilot project for electric school buses and help a Luverne pork processor meet environmental standards. “We don’t have to choose between protecting the environment and creating jobs,” Bishop said. “We can do both.”

MPCA Commissioner Laura Bishop
MPCA Commissioner Laura Bishop
On Wednesday, Gazelka told reporters that the run of hearings for environment and energy-related appointees was more coincidental than a larger statement about Walz’s policies on those issues. The GOP has confirmed Means to the PUC and confirmed Department of Agriculture Commissioner Thom Petersen. 

But it’s clear Republicans have no shortage of concerns about the environmental agencies. Ruud said she expects to call Department of Natural Resources Commissioner Sarah Strommen in for a confirmation hearing soon as well.

And though Gazelka said Kelley’s fate was not necessarily sealed by the department’s Line 3 decision, he also said the appeal “was a very big deal.” The GOP, Gazelka said, believed the Walz administration would let the project advance unchallenged after it was approved once again by the PUC. “The jobs aren’t there, the promises weren’t kept,” Gazelka said.