In Part 1 of this series, I discussed how Minnesota's energy policy is about to take a sharp turn to the left. The November election handed the local DFL party (Democrat-Farmer-Labor) complete control of state government for the first time in a generation. Twenty years of pent-up policy demands await fulfillment.
The incoming Chair of the House Energy Policy Committee (Melissa Hortman, DFL-Brooklyn Park) has announced the first area of interest: solar polar.
As I mentioned in Part 1, the 2012 DFL takeover of both houses of the state legislature, following the 2010 DFL takeover of the Governor's Mansion, leaves a lot of constituencies to thank and to reward. The state's budget situation, with an apparent $1 billion deficit over the next two years, leaves little room for rewarding all those with a hand out. Simply put, raising taxes on "the rich," as DFL Governor Dayton would like to do, will not produce enough revenue to satisfy everyone.
The state-regulated energy utility industry, unfortunately, offers opportunities to satisfy nearly everyone on the DFL wish list. And the DFL can do so without it costing anything, according to their calculations. Ratepayers, not taxpayers, foot the cost of utility regulation. Even though taxpayers and utility customers are nearly the same people, raising the costs of electricity and natural gas will not show up on the state budget.
Even better, money extracted from utility customers will receive next to no media scrutiny. Efforts to raise income taxes this spring will likely get wall-to-wall media coverage. Attendance at the Ways and Means and Tax Committees will be standing-room-only. The crowd at the Energy Policy Committee...not so large. At the Public Utilities Commission? Smaller still.
Which is why Capitol observers should pay close attention to the recently quiet energy policy space in 2013. Look for advocates for the poor to get expanded utility discounts and unpaid bill forgiveness. Look for public employee unions to add to the headcount at the regulatory agencies. Look for the private unions to get new regulations requiring more use of their members' skills. All of these added costs will be quietly passed on to the ratepayer.
Of course, the biggest payoff will be to the environmental advocacy community. And that community has already selected as its first prize more solar mandates. A coalition including more than 50 leading members of the state's environmental network has formed the umbrella group Solar Works for Minnesota. The coalition includes solar equipment vendors, installers, and fellow travellers, but the most prominent name on the list is the nation's largest environmental group, the Sierra Club.
The Sierra Club's Minnesota chapter has been active, politically. In the 2012 election cycle, it endorsed six of the incoming members of the House Energy Policy Committee, including both the Chair and Vice Chair. As of October 22, 2012, it had provided a cash campaign donation to one of the members (Falk).
The Solar Works group has set as its top priority a 10 percent mandate for utility purchases of solar power. This mandate would sit atop the existing 25 percent renewable energy mandate that electric utilities must meet by the year 2025.
It is not just outside pressure being brought to bear on the newly-elected DFL majority. One of the first lessons you learn inside government is that "personnel is policy." The person believed to be the incoming lead staff person for the House committee is Peter Strohmeier, who is being promoted from his current position as a legislative assistant. Mr. Strohmeier was recently an unsuccessful candidate for the City Council of suburban Roseville, Minnesota. His top issue was his opposition "to additional large-scale commercial retail" in the city. He cites his lone "no" vote, as a member of the local Planning Commission, against Wal-Mart as his most prominent achievement. If Mr. Strohmeier cannot see his way to support a business the size of big-box retail, one wonders as to the fate of a large power plant or transmission line, infrastructure representing a far larger environmental footprint.
In the event, none of this will make any difference to the put-upon ratepayer. It makes no difference to her whether she is writing a check to pay the electric bill or her state income taxes: either way the family bank account is smaller. Beyond the small consumer, Minnesota competes in a worldwide market for heavy industry and large commercial installations--everything from computer server farms to iron ore mines. Increasing energy costs makes the state less competitive for energy-intensive business.
As the 2013 legislative session gets underway next week, look for more coverage of the Green Energy Follies in this space.
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