Budget Surplus
Minnesota Management and Budget (MMB) released a revised budget forecast on Monday. According to MMB, the budget surplus is now $9.25 billion for the current biennium. This is another increase from the November forecast which showed a $7.7 billion surplus.
While the surplus is good news, MMB Commissioner Jim Schowalter cautioned that inflation and current geopolitical conflicts may impact the state’s budget going forward. Gov. Tim Walz (DFL) wants a portion of the surplus to be given back to some individuals in the form of $1,000 “Walz checks.” House Speaker Melissa Hortman (DFL-Brooklyn Park) continues to advocate for economic programs that help the most disadvantaged Minnesotans. And, Senate Majority Leader Jeremy Miller (R-Winona) said his caucus supports permanent tax cuts on the bottom tier of income taxes.
With vastly different priorities, it is difficult to imagine three sides coming together. Since the Legislature did its work last year by passing a balanced budget for the biennium, no action is necessary this year with respect to the budget surplus.
House Energy
On Tuesday, the House Climate and Energy Finance and Policy Committee heard HF3614 (Long, DFL-Minneapolis). HF3614 would increase the dollar amount threshold where an investor-owned utility (IOU) would need to get approval by the Public Utilities Commission (PUC) before buying, selling, or renting equipment. The current threshold of $100,000 dollars was set in 1974. With inflation, most utility trucks of transformers easily top the $100,000 threshold. HF3614 raises the threshold amount to $500,000.
Xcel Energy testified in support of the bill. The Citizens Utility Board (CUB) raised a concern that a $500,000 threshold may not impact the ratepayers of Xcel Energy very much. However, ratepayers of a smaller IOU, like Otter Tail Power Company, may be more impacted by the $500,000 amount. HF3614 was laid over for possible inclusion in the Omnibus bill.
The Senate companion bill, SF3225 (Senjem, R-Rochester) sets the threshold amount at $2 million. SF3225 passed the Senate Energy Committee and was sent to the Senate floor.
The committee also heard HF3151 (Stephenson, DFL-Coon Rapids). This is a Legal Aid bill. HF3151 allows an individual to file a complaint with the PUC if the individual feels he/she has been wronged by a utility. HF3151 codifies current internal PUC practices. All 49 other states have similar language in statute. HF3151 only applies to IOUs. The bill was passed on a 10-5 vote, with Rep. Greg Boe (R-Chanhassen) voting with the DFL majority. HF3151 was sent to the Judiciary Committee.
The committee also heard HF3431 (Acomb, DFL-Minnetonka). HF3431 appropriates $300,000 to the Minnesota Pollution Control Agency (MPCA) for a report on the potential strategies to reduce greenhouse gas emissions. HF3431 is not part of the Walz Administration’s bills so the MPCA took no position on the bill.
Thursday was energy storage day. Zac Ruzycki, director, resource planning, Great River Energy, and Jason Houck, senior manager, policy and regulatory affairs, Form Energy, provided an overview of Great River Energy and Form Energy’s pilot storage project. Greg Ridderbusch, president and CEO, Connexus Energy, provided an update on their storage project. While current economics are still a challenge for energy storage projects, Connexus continues to look for more opportunities that will benefit its members. Tim Thompson, CEO, Lake Region Electric Cooperative, described some of his cooperative’s demand response programs. One of their pilot projects is a behind-the-meter storage project that would give the member back up power during an outage and help to reduce the cooperative’s peak.
The committee also heard HF1651 (Hollins, DFL-St. Paul). HF1651 would require a require an electric utility (including distribution cooperatives) to install an energy storage system when replacing a feeder line with another of higher capacity. The language does not take cost or reliability into consideration. This type of mandate into the operations of distribution-owning utilities would be troublesome for Great River Energy members. HF1651 was laid over for possible inclusion in an Omnibus bill.
Senate Energy
In addition to SF3225, the Senate Energy Committee heard SF3060 (Weber, R-Luverne). SF3060 comes from Cargill, Inc. The bill modifies the commercial property assessed clean energy (PACE) program to include farmland improvements as eligible property. Examples of eligible improvements include water conservation measures or drainage and irrigation system improvements. SF3060 was passed and sent to the Senate floor.
The committee also took up the confirmation of PUC Commissioner John Tuma. Some Senators questioned Tuma on whether the commission was listening too closely to only some stakeholders on various dockets. In the end, the committee unanimously approved the confirmation. Tuma’s confirmation will be voted on by the full Senate.