Skip to Content

Support MinnPost

Republican legislators take aim at Public Utilities Commission

Republican legislators take aim at Public Utilities Commission
MinnPost photo by Corey Anderson
Republicans have introduced a half-dozen bills that would change the power and makeup of the Minnesota Public Utilities Commission.

With complete control of the Minnesota Legislature, Republicans are taking early aim this session at a little-discussed state commission that has a big say on energy issues.

Republicans have introduced a half-dozen bills that would change the power and makeup of the Minnesota Public Utilities Commission, a five-member group appointed by the governor that has the power to regulate the state’s big electricity, gas and telecommunication companies. The proposals run the gamut, from changing the commission’s abilities to oversee and review new natural gas and pipeline projects to where its members come from in the state. 

The proposals come at a time of uncertainty over the nation's future energy policies under President Donald Trump, and they would mean big changes to the 42-year-old commission, which impacts the pocketbooks of Minnesota businesses and homeowners by setting energy rates.

Republicans say the commission has a metro-heavy representation and bogs down critical state projects with bureaucratic red tape. “This is just the tip of the iceberg,” said GOP Rep. Jim Newberger, who authored one the proposals to go around the PUC.

But church leaders and clean energy groups, among others, are opposing the bills, saying they set a dangerous precedent by weakening the only check on the state’s monopoly energy system. “They all look like small changes but they all add up to a big change in utility regulations,” said Annie Levenson-Falk, executive director of the Citizens Utility Board, a newly-formed organization that advocates for energy consumers in Minnesota. “There’s no market so the checks on that market are so important. The PUC is that check.”

A long history of regulation

Minnesota’s electric utilities have been regulated as far back as the early 1900s, but not always by the PUC. In the early part of last century, state officials figured a few large providers could deliver energy cheaper by eliminating redundant infrastructure and offering the lowest cost per unit. Under that system, which still operates today, Minnesota awards exclusive service areas to certain utility companies, and in return, those companies must provide non-discriminatory service to everyone in that area, with the cost regulated by a public entity like the Legislature or the courts. 

State Rep. Jim Newberger
State Rep. Jim Newberger

By the 1970s, however, some utilities had gotten so large that there were concerns about both the cost of energy and the impacts on the environment. Congress stepped in with new regulating agencies, and so did Minnesota, which added the regulation of energy and natural gas to the duties of the Public Service Commission and an Administrative Division. At the time, the organization already regulated the railroad industry and telecommunications.

In the 1980s, the organization split into two groups. The PUC was formed to oversee energy, natural gas and telecommunications. The commission was set up to not only set the rates for those utilities, but to also create a process for approval and public vetting of new facilities and long-term coverage plans. Over the years, their responsibilities grew. In 2005, the Minnesota Legislature also directed the PUC to help with the site location, routing and permitting for large wind energy systems, high voltage transmission lines and certain pipelines. The PUC is also responsible for setting industry-wide standards and best practices, and it can step in to resolve disputes between a customer and their provider. 

The commission is made up of five members, all appointed by the governor to staggered, six-year terms. The state Senate has the power to confirm — or deny — those appointments. Three of the current members are Democrats, like Gov. Mark Dayton, and there’s a Republican and an independent commissioner. Each is paid $140,000 per year.

The commission is quasi-judicial, meaning members must have objective reasoning for their decisions. Among the companies the PUC regulates: Allete, Alliant, Northwestern Wisconsin Electric, Otter Tail Power, Xcel Energy, Great Plains Natural Gas, CenterPoint Energy Minnegasco, Aquila and Western Natural Gas.

Blurred lines

This is by no means the first time the PUC has come under the scrutiny of legislators. In 2012, Senate Republicans voted down Dayton’s appointment of PUC Chair Ellen Anderson, a former DFL senator from St. Paul. At the time, Republican senators said Anderson’s record on energy issues in the Legislature draws her role at the PUC into question.

In December, Dayton again drew the ire of Republicans when he appointed Sen. Katie Sieben, DFL-Cottage Grove, to the board to fill a vacancy just as her time was up in the Legislature. Rep. Dan Fabian, R-Roseau, criticized Dayton for not picking someone from outside the Twin Cities. Under state law, at least one commissioner must reside at the time of appointment outside the seven-county metropolitan area.

State Rep. Dan Fabian
State Rep. Dan Fabian

Fabian has introduced a bill that would require the governor to appoint one member to the PUC from each of the state’s eight congressional districts. That would add some automatic rural representation to the commission, he said. “[Rural Minnesotans] are tired of not being represented on commissions and governing bodies,” Fabian said. “The five members of the PUC live an average of 17 miles from the Capitol.”

But the bill that’s stirred up the most controversy this session would allow Xcel energy to build a new $1 billion natural gas plant in Sherburne County without approval from the PUC. The plant would replace two coal-fired units near Becker that are scheduled to close by 2026. 

In early January, the PUC agreed that the plant was needed but asked the Xcel to draft a certificate of need for the new facility. Specifically, the commission asked Xcel to describe how energy would be generated and to note what kind of economic impacts the facility would have on the region. The certificate of need process typically takes about 12 months to complete.

Newberger, R-Becker, the author of the bill, said hundreds of jobs in the region are in jeopardy with the closure of the coal plants and the natural gas facility is needed to keep people working. He added it’s the Legislature's job to create policies and the PUC’s job to implement them, but too often there’s a “blur of that line.” “We have a very chaotic regulatory environment in Minnesota,” he said. “We can come up with all the tax policies and incentives we want, but none of that is going to do any good if the regulatory environment is detrimental.”

The bill is opposed by clean energy groups and dozens of church leaders who say the legislation takes the PUC and the public, who can attend their meetings, out of such a big decision. “We don't have a choice as consumers about where we get our electricity or gas, the one place we get to stand up as consumers in this state is the Public Utilities Commission,” said Matt Gladue, an organizer with Isaiah of Minnesota, a faith-based coalition of Minnesota congregations. “The PUC has a bipartisan group of people appointed to it. When the Legislature is in the hands of one party or another, it leaves people to the whims of one party or another.”

Other proposals would put checks on the PUC’s permitting process, including for large pipelines like Sandpiper, a 616-mile-long proposed pipeline that would carry oil from North Dakota to Wisconsin through Minnesota. The PUC approved the line on a unanimous vote, but many criticized the length of the permitting process. A bill introduced in the House would require to PUC to produce semiannual reports on their progress on permitting specific projects. Another bill would allow county boards to assume responsibilities for processing large solar powered energy facility permits if the board provides written notice to the PUC.

State Sen. Bill Weber
State Sen. Bill Weber

Currently, the PUC doesn’t have jurisdiction over setting rates for both municipal energy providers, which are run by local governments, or rural electric cooperatives, which are run by a board of members. But the PUC can weigh in on disputes between the providers and customers and review their rates under a law passed in 2015. But a bill passed on Thursday in the Senate Energy and Utilities Finance and Policy Committee would remove that authority, allowing rural cooperatives and municipal providers to bypass the PUC when customers have a dispute or concerns about their rates.

“I think that we have to recognized that, quite frankly, that they are responsible to the ultimate authority, that is their customer,” said Sen. Bill Weber, R-Luverne, the author of the bill. 

But clean energy groups and some rural cooperative customers protested, saying the cooperatives can now charge people utilizing solar energy fees as high as $83 per month, the highest in the nation. “Their customers need this last resort for neutral, expert review,” said Allen Gleckner, who works for the nonprofit Fresh Energy. “This is the classic case of the fox wanting to guard the henhouse.”

For Gladue’s part, he’s particularly concerned with how fast these proposals are moving in the Minnesota Legislature this year. He thinks the utilities want to move them through the process quickly, before more members of the public weigh in and session gets bogged down with the budget process. “The longer it sits and committees and the longer it takes to get to the floor the less likely it will happen,” he said.

The PUC, which doesn’t testify in legislative committees, had no comment on the proposals introduced this session. 

Get MinnPost's top stories in your inbox

Related Tags:

About the Author:

Comments (11)

We've heard this before

Sigh.

Republicans are providing the public with yet another example of how they prefer to rule rather than govern – that is, to serve corporate interests rather than public interest. As a consumer, I’m already dealing with a state-supported/subsidized monopoly, and the PUC is the only mechanism available to try to hold utility and energy companies in check. Weakening the PUC serves corporate and shareholder interests at the expense of the interests of the people who actually use the services and/or energy – the rate-payers. With a legislative proposal that would allow energy providers to charge customers for producing their own solar power, Republicans clearly show whose side they’re on, and it’s not the public’s.

Rural Minnesota already has disproportionate representation in the legislature, and to the degree that drawing district boundaries remains a partisan prerogative (before the courts weigh in), I fail to see how rural residents are being ill-served by a PUC that has more urban than rural members. Far more Minnesotans live in urban areas than in rural areas, so PUC representation that’s urban-centric seems eminently fair. If Republicans want to enlarge the commission from 5 members to, say, 9 members, and have representation be more proportional, I’d be OK with that if the PUC districts were population-based rather than Congressional-District-based. The latter still provides disproportionate weight to rural areas.

Your problem Ray

is that you make sense. That's a big mistake in trying to understand how Republicans work. (I pretty sure you already know that.) Your first sentence is really all you need to know about Republicans: they serve their large corporate donors. Everything they do or say should be viewed through that lens. For instance they use the rural urban argument as a vehicle to get elected, they don't actually care about the folks in rural communities any more than they care about anyone else. If they did care they would restore all the funds they've stripped from local government aid (LGA). Timmy Pawlenty cut LGA in every budget that he ever presented. No, Republicans don't care, its all about votes.

Is This

Another ALEC bill?

All Republican energy bills are ALEC bills

From a 2015 list of "legislative projects" the American Legislative Exchange Council helps its members pursue:

"Penalizing people who produce their own clean energy – how much sicker can you get? ALEC, which has referred to homeowners with their own solar panels as ‘free-riders on the system,’ is deeply involved in both combating renewable energy mandates and modeling legislation that targets net metering."

www.dailykos.com/story/2015/7/8/1400544/-Who-is-Alec-and-Why-Should-We-Care

And, of course, the chairperson of the House "Jobs and Affordable Energy" committee is none other than ALEC State Chairperson, Pat Garofalo (www.alec.org/about/state-chairs), who just happened to insert a little ALEC language in the 2015 omnibus energy bill that, this MinnPost article's author said, amounted to "legalized theft" by power companies wanting to collect some free money from free-riding Minnesotans who had gall to invest in and use job-killing, un-American, national security-threatening, solar power.

www.minnpost.com/minnesota-blog-cabin/2015/04/rep-garofalo-s-energy-bill...

"Republicans have introduced a half-dozen bills that would change the power and makeup of the Minnesota Public Utilities Commission"

No doubt ALEC Chair Garofalo is orchestrating the onslaught. (ALEC doesn't give State Chair positions to people who haven't proven they can faithfully toe the line, follow orders and, most importantly, deliver for Daddy).

Rate increases

Energy business in Minnesota are set up as monopolies. You don't get to choose between companies for electricity or natural gas. You are stuck with one company, which has the power to cut off your supply if you cannot afford their going rate. The price of this is rate regulation.

Here is how that goes. A company applies for a rate increase, their request is reviewed, and the vast majority of the time they get an increase, but a smaller one that requested. Because of regulation, those who self generate heat or light with solar or wind power are not punished financially for doing so, something that has slowed the need to add large power plants.

The current situation is win-win. Power companies make healthy profits and consumers get affordable prices. It is hard to find a state with better results than Minnesota.

However, as shareholders and executives want more profits, they advocate deregulation to lower costs while increasing prices, with taxpayers and energy consumers left with no choice by to pay what is demanded.

Despite the fancy words, this is a change from a win-win to a win-lose solution. Republicans putting their thumb on the side of the scale to help big companies at public expense.

For now Dayton can veto this kind of self serving proposition. Picking a Democrat as governor in 2018 ensures that big energy doesn't start behaving like big pharma.

God Forbid that ANY Aspect of MN State Government

be allowed to operate "in the public interest."

The very IDEA is anathema to these current Republicans,...

whose only interest is PRIVATE profit,...

no matter what the private profit extracts from the threadbare pockets of their constituents,...

something which their base never seems to be able to comprehend,...

(likely because they waste all their time watching weasel news,...

and listening to "conservative" talk radio, which includes far too many of their local stations).

Not just frankly, but quite frankly

" 'I think that we have to recognized that, quite frankly, that they are responsible to the ultimate authority, that is their customer,' said Sen. Bill Weber, R-Luverne, the author of the bill."

Of COURSE they are . . . Because if that Ultimate Authority is sick and tired of getting what they see as gouged, not listened-to, blown-off, dissed, time and again and, they think, gouged some more, they can just take their electrical business elsewhere.

Oh . . . Wait . . . Did somebody say something about "exclusive service areas" or some kind of "monopoly"?

Good Article (Good comments)

Well seems easily plausible looking at these salaries that (getting rid of the PUC/or getting it under political contro would help all these monopolistic companies CEO's get out of their poverty) Then blame the regulations/regulators!
CEO's:
Allete $2.2 M
Alliant: $4.69 M
NWE $6.78 M
Otter $728.8 K
Xcel: $8.6 M
Grt Plns: $2.85 M
Center point $4.7 M
AQ & WNG: Not available
Cntury link $10.3

Could the good representative: Clarify "bogs down critical state projects with bureaucratic red tape" is that liek preserving the environment or giving the customer a voice in: Monopoly behavior companies? We all know these companies are "Guaranteed" profitability. That's why these execs get all the big bucks: To keep the lights on and guaranteed cash flowi to the stock holders!

"Newberger, R-Becker, the author of the bill, said hundreds of jobs in the region are in jeopardy with the closure of the coal plants and the natural gas facility is needed to keep people working"

So is this a jobs bill? or an energy project? Has he consulted (Mr. Coal Trump) on this? Aren't these guys going to make coal and associated pollution "great again" whats the talk about a Gas fired plant? Can't be breaking ranks, these guys need a couple Trump kool aid doses.

"Currently, the PUC doesn’t have jurisdiction over setting rates for both municipal energy providers, which are run by local governments, or rural electric cooperatives, which are run by a board of members. But the PUC can weigh in on disputes between the providers and customers and review their rates allowing rural cooperatives and municipal providers to bypass the PUC when customers have a dispute or concerns about their rates."

So why do we need more rural representation on PUC: Looks like by and large they have no jurisdiction out there anyway?

We all know about ALEC: "Always Looking to Exploit Consumers"
Thanks: Yes I have communicated to the PUC on a couple of occasions:

In the weeds (where ALEC hides and Garofalo guides)

There's another bill making it's way through the committee process right now. House File 235:

"A bill for an act relating to energy; renaming and repurposing the renewable development account; terminating certain solar energy incentives; appropriating money; amending Minnesota Statutes 2016," . . . (and here come the deep weeds) . . . "sections 16B.323; 116C.779, subdivision 1; 116C.7792; 216C.41, subdivisions 2, 5a; proposing coding for new law in Minnesota Statutes, chapter 216C; repealing Minnesota Statutes 2016, sections 116C.779, subdivision 3; 174.187; 216C.411; 216C.412; 216C.413; 216C.414; 216C.415; 216C.416; Laws 2013, chapter 85, article 6, section 11."

Sorry 'bout that, but it goes to show how our representational democracy (the "sausage making") and "transperancy" works a lot of the time.

Pat Garofalo and Jim Newberger are two of the bill's authors and here's a link to it:

www.revisor.mn.gov/bills/text.php?number=HF235&version=1&session=ls90&se...

If you take a look at it you'll notice a big part of it has to do with the deceptively simple idea of changing the name of the account in which (taxpayer) money appropriated by the legislature is kept and spent from.

Right now it's called the "Renewable Energy" account.

The bill proposes changing that to just plain "Energy" account.

Another huge thing the bill does is delete the explicit list of things the money in the account can be spent on. These are just a few examples from that list, but if you look at the bill, starting at line 4.3 of Section 2, you'll see everything down to line 5.29 would be taken out if the bill becomes law.

"(d) Funds in the account may be expended only for any of the following purposes:

"(1) to increase the market penetration within the state of renewable electric energy resources at reasonable costs;

"(2) to promote the start-up, expansion, and attraction of renewable electric energy projects and companies within the state;

"(3) to stimulate research and development within the state into renewable electric energy technologies; and

"(4) to develop near-commercial and demonstration scale renewable electric projects or near-commercial and demonstration scale electric infrastructure delivery projects if those delivery projects enhance the delivery of renewable electric energy . . . The utility that owns a nuclear generating plant is eligible to apply for renewable development account grants."

And, speaking of the PUC and the Republican attack on it, the next line, or "subpoint" of "(4)" says:

"(e) Expenditures authorized by this subdivision from the account may be made only after approval by order of the Public Utilities Commission upon a petition by the public utility. The commission may approve proposed expenditures, may disapprove proposed
expenditures that it finds to be not in compliance with this subdivision or otherwise not in the public interest, and may, if agreed to by the public utility, modify proposed expenditures."

So those particular points seem to say, if you're a utility that owns a nuclear power plant and you'd like to build a "near-commercial and demonstration" renewable energy project, you could apply for a grant to help get it built and get the money from the Renewable Energy account if the PUC approved the project. (So, Republicans are saying, we need to erase that idea ASAP!)

Anyway . . . Main point is that's just a small sample of all the renewable energy-related things in the bill that the money in the fund MUST be spent on that would be deleted if the bill makes it into law. If you look at the bill, those items are the lines in Section 2 that have a "strike-through" line through them (just copy and paste them into a blank email or word processing page to make the strike-through disappear, if it makes it a pain to read).

And the other main point, as I understand it anyway, is changing the name of the account from "Renewable Energy" to "Energy" and getting rid of that annoying restriction that says the money can be spent on renewable energy projects ONLY, would mean the money in the new "Energy" account could be spent on whatever the (Republican controlled) legislature thinks it ought to be spent on instead.

Like business or general tax cuts.

Or things like an experimental "clean coal" project (in Jim Newberger's area, maybe?).

Or Republicans might think it would be better to spend some of that renewable energy money to help pay for some outstate road and bridge repair.

Who knows what the money in the new "Energy" account might get spent on? As long as there aren't any restrictions on what it can be used for -- as long as it isn't limited to (crazy liberal) renewable energy projects -- it could be spent on just about anything.

If there weren't any restrictions, some or all of any unspent funds could be SHIFTED anywhere. (Anyone remember "shifts and gimmicks"?)

If you're free today and you'd like to check in on the above, "live and in real time," they're going to be going over the bill concerned with Newberger's natural gas plant plan and the bill renaming the Renewable Energy account today in the Senate and it will be covered on MN public tv:

1:00 p.m. - (live) Senate Committee on Energy and Utilities Finance and Policy

Agenda:

S.F. 85 (Mathews) Natural gas combined cycle electric generation plant construction and operation in Sherburne County authorization.

S.F. 214 (Osmek) Renewable development account renaming and repurposing; solar energy incentives modification and appropriation.

Details and basic (online) hookup guidance here:

www.house.leg.state.mn.us/htv/htv.asp

Rep Garofalo

Very smart man with very intense focus on demolishing renewables. It is almost as if money is more important than children and their future. How else could one of our State Legislators with such Power (Garofalo), last year almost succeed ramming through legislation that was borderline crazy. For example, he wanted to include Nuclear Plants in the same categories as wind and solar. And those nuclear casks sitting on the river bottoms Xcel has allowed to keep for decades? Concrete casks...does concrete hold up to Minnesota weather forever? In our biggest river bottom eventually feeding the entire central states of the United States.

He will not stop. He is in "the money". Only a near miracle will stop his will be done in one verbiage version/change or another...and he is powerful enough to strong arm others who's hearts want to go in a different direction to turn their heads and hope his fairy tale turns out to be real. Shameful...not a representative this US Marine fought for. What is happening to your-our country people? You going to sit by and watch this?

Minnesota Electric Cooperatives

I believe it is time to "bring these monopolies" under the same or similar oversight as their friends - the larger public utilities.

The Minnesota Cooperatives have been working on a plan to own the renewables sector as well for years now. Ever since they realized their own customers wanted to implement it in their own homes as cooperative members, they went straight to work to cap that idea.

It first started with perversion of the Minnesota community solar gardens program which was a fair idea in earnest, but like many mostly well thought out state run ideas, they turned into something so far from the original intention that they are not even in the same universe.

Community Solar gardens were a Minnesota idea to allow those who could not get clean renewable energy either because they rented, had trees and bad sunlight at their site, or for those who just wanted to offset some of their use with clean energy as a way of some type of annuity for their children and grandchildren. However, they jumped on it and built their "own version" and priced the entry level costs for their own members (usually cost per panel), so high it would take 35 years or more to break even while they keep their profit margins through the sky. This, when if allowed, an individual or company could build their own solar project and get 100% of their investment back in 5 to 7 years and then keep the energy savings locked in for the next 20 years. Now that's member care huh?

Now the coops are close to implementing massive bulk buying programs that will allow them to be the one monopoly again, even with solar, by beating the manufacturers down in pricing with larger and larger bulk purchases. This eliminates manufactures in areas (like the U.S) who can't compete due to labor differences compared to the developing world even if the quality difference is so substantial. Keeping their monopoly status across the board - keeping similar staffs as all these new jobs around renewables we had recently seen evaporate and the U.S remains in the ma' bell era. Unreal.

The real story is all of this holds back implementation of great new technologies other countries that have opened up energy production to real competition, like much of Europe - Germany; Germany is really, really, really ahead of us. So is China. Much of the world where large corporations do not run their countries are getting so far ahead of us in these areas....it's downside is so deep it cannot be covered anywhere near what it demands here. Even very poor continents Like Africa who have no monopolized energy infrastructure is implementing these exciting advances. Although their poverty levels have held them back...that will change as they become more modernized in these areas out of need which will beat suppression every time, sooner or later...and all of Europe and China are screaming there to help them get there faster with creative financing. They ask, what do you have? Diamonds..okay. Gold, perfect-really like that stuff...oil? fantastic!...and if no real valuable assets - just an ironclad agreement that the country will always only allow China to build and own these megawatts of solar and sell it back to them bringing all those Chinese jobs and training to the country for a very long time if not forever.

Listen, utilities have recovered the costs to run those lines in the last century and keep them up to date for many decades. Check the way over the top level of pay and even more retirement benefits of the coops. Does your company compare? Do they offer any? If monopolies were bad for the telephone industry...why not utilities? While we are at it...how is that cable network monopoly working out for everyone? Know of any monopoly today that is in your best interest with fantastic customer service?

It is funny to me - Republicans (and I always have been one until the Supreme Court ruling for unlimited political funding for everyone including the largest, most profitable corporations in the world - those are the big oil companies by far...very far by the way - think hundreds if not thousands of times bigger than the bully Koch Brothers), and what that has done to all politics...especially the Republicans - hearts are gone. They used to stand for freedom...small government, open markets, free and fair competition. In good conscious I cannot vote for either major party anymore - they are in it for themselves and seem unstoppable....we need a Trump x 2 to blow the many legs of these good ole boy networks and workings right out into the open for what they truly are and the public will gasp...I promise.

Explain to me how Mr Garofalo and his powerful seats on all energy related initiatives-commissions will help the environment? He now wants to eliminate all oversight over monopolies. That is just a purely insane thought. Just giving the keys to the kingdom. Wow.

I am getting quite upset and I sure hope all of you are too before it is too late....this decade for sure. We can and need to be better than this - grassroots.