Energy – Overviews
Both the House and Senate energy committees heard overviews from the Department of Commerce on the federal infrastructure bill. The federal infrastructure bill includes funding in four areas related to energy. These four areas are: funding for grid resilience and reliability, energy efficiency and weatherization, clean energy demonstration projects and workforce training and development.
The federal government has not finalized how the infrastructure money will be made available to states. The pace of how money is allocated to states is dictated by the federal government. However, preliminary information indicates some of the funds will be sent to states based on a yet-to-be determined formula. In such cases, state matching dollars must also be appropriated. According to the Department of Commerce, a majority of funding will be competitive. Under a competitive program, Minnesota is not guaranteed funds.
For additional information and guidance, the Biden administration has set up the website build.gov.
House Energy
The House Climate and Energy Finance and Policy Committee heard HF2875 (Long, DFL-Minneapolis) on Tuesday. In 2020, the Legislature passed, and Gov. Walz signed, a bill appropriating a total of $46.2 million from the Xcel Energy Renewable Development Account (RDA) to the Prairie Island Indian Community (PIIC) for a net-zero energy project. The appropriation was divided into three smaller amounts that would be given based on the PIIC meeting certain milestones. The law required PIIC to develop and file a plan with the Department of Commerce. The law also required reporting of various milestones to the Department of Commerce and the relevant House and Senate Committees.
Unfortunately, due to the COVID-19 pandemic, the PIIC was not able to meet some of its milestones. Supply chain disruptions and lack of workforce are the primary issues. HF2875 gives the PIIC an additional year to meet its milestones. The bill passed unanimously and was sent to House Ways and Means.
On Thursday, the committee got an overview of transmission issues. Priti Patel, vice president and chief transmission officer, Great River Energy, discussed the importance of affordability as it relates to the large transmission buildout. The committee also heard from MISO, Xcel Energy and others.
Great River Energy Bill
This week Great River Energy introduced SF2861 (Senjem, R-Rochester)/HF3310 (Ecklund, DFL-International Falls). As the transition from central station power to more distributed and carbon-free resources continues, it is expected that $100 billion in transmission investment is needed to maintain reliability.
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.
However, the size and scope of the needed transmission changes the dynamics among transmission owners. MISO’s current plan for needed transmission favors some utilities over others. Investor-owned utilities (IOUs) 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.
SF2861/HF3310 creates a process for any transmission owner to go to the Public Utilities Commission (PUC) 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. SF2861/HF3310 is a very controversial bill. The IOUs, particularly Xcel Energy, strongly oppose the bill. Given that 2022 is a short session (and a redistricting session), chances for passage are minimal. However, Great River Energy and it’s 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.