Minnesota legislative session 2022
The Minnesota legislative session will convene on Jan. 31, 2022 and it will likely be another contentious one.
The state received positive news on the budget front. Minnesota Management and Budget announced the state has a $7.7 billion surplus for the 2022-2023 biennium. However, some of the budget surplus is automatically reduced, by law, to pay off accounting shifts, bolster dedicated funds and replenish budget reserves.
The state also still has approximately $1.1 billion left in federal COVID-19 relief funds. Gov. Tim Walz and the Legislature will need to negotiate how to spend that money as well. The state’s share of the federal infrastructure bill may also need to be dealt with in the 2022 session.
Walz (DFL) and the House DFL Majority have called the positive financial news a “remarkable opportunity” to improve the economic circumstances of Minnesotans. Both have prioritized paid family and medical leave and improved education. Other Democrats have called for investments in affordable housing and climate change mitigation.
“The House will not cut taxes for corporations or rich individuals at the expense of those less fortunate,” stated House Majority Leader Ryan Winkler (DFL-Golden Valley).
Senate Republicans have already indicated that the budget surplus is enough to avert a tax increase on businesses, due to take effect in January, to cover the state’s unemployment insurance debt. Additionally, Senate Republican Majority Leader Jeremy Miller (R-Winona) is focused on tax relief. “The top priority of Senate Republicans this session is to provide additional tax relief to Minnesotans across the state,” said Miller.
The Legislature will try to pass a bonding bill this session. A bonding bill needs a supermajority of votes, so it is the one bill that the minority party in both bodies has an impact. Already, a record $5.5 billion in bonding requests have been made to the Legislature.
During this session, the Legislature must determine how to allocate COVID-19 money to essential employees. The Senate prefers to give a smaller group of essential employees higher bonuses (for example, nurses and nursing home staff). The House prefers to have smaller dollar amounts spread among a larger group of workers (for example, adding teachers to the list).
Also making this session interesting is the fact that 2022 is a major election year. Walz is up for re-election as are all 201 legislative seats. Every 10 years, based on the new census data, Congressional and Senate boundaries are re-drawn. The Minnesota state legislative districts are also re-drawn. Although technically the Legislature has a chance to come to agreement on new legislative boundaries, that is highly unlikely. The courts will step in and draw the new legislative boundaries by Feb. 15, 2022. Based on the census data, rural Minnesota will lose one legislative district, meaning the metro area gains a district. So, legislators will want to know where their new districts are and make the decision to run again or not. These factors will pressure legislators to finish session quickly and to not undertake controversial issues.
GRE Legislative Issue
Significant electric transmission infrastructure expansion is required to reliably, affordably, and safely transmit energy from decentralized sources. The Midcontinent Independent System Operator (MISO) estimates transmission construction and investment must more than double in the next ten years to reliably meet all the current energy policies of the various MISO states. Additionally, that number more than quadruples for the grid to reliably maintain power to meet carbon reduction goals.
New transmission construction and investment will primarily be for a few, large regional projects. However, it is also important to maintain and invest in local transmission projects to support local reliability and resiliency. Long-term planning is happening now at both the MISO level and the state level. Accordingly, GRE and other utilities need clarity around the sharing of investments.
Minnesota has had a history of transmission owners working together to develop and maintain transmission infrastructure. The Grid North Partners – formerly known as CapX2020 – planned, developed, constructed and now jointly-own five regional transmission projects. And while the transmission owners in Minnesota are trying to come together again on fair investment solutions, the size and scope of the needed transmission changes the dynamics. MISO’s current plan for needed transmission favors some utilities over others. Investor-owned utilities have an obligation to their shareholders. Therefore, there is less incentive to share in investment opportunities with customer-owned organizations who may have less investment opportunities under the MISO proposed plan.
GRE will introduce a bill that creates a process for any transmission owner to go to the Public Utilities Commission to determine a fair investment split among transmission owners. This process is a last resort if transmission owners cannot come to an agreement for investment on their own. This will be a controversial bill. Xcel Energy and Otter Tail Power Company will oppose the bill. Given that 2022 is a short session (and a redistricting session), chances for passage are minimal. However, the GRE transmission team believes the issue is very important in order to not leave our members with only the costs associated with construction of needed transmission.