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Serving Northern St. Louis County, Minnesota

New state law advances date for carbon-free power

Area power co-op manager on board with the change, while recognizing significant challenges

David Colburn
Posted 2/22/23

REGIONAL- DFL legislators and Gov. Tim Walz put the state’s electric utilities on a fast track to carbon-free power generation last week when Walz signed a bill advancing the date for the total …

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New state law advances date for carbon-free power

Area power co-op manager on board with the change, while recognizing significant challenges


REGIONAL- DFL legislators and Gov. Tim Walz put the state’s electric utilities on a fast track to carbon-free power generation last week when Walz signed a bill advancing the date for the total phaseout of carbon-generating electricity by ten years, from 2050 to 2040.
“Minnesota is not going to wait any longer, Minnesotans are not going to wait longer,” Walz said at a signing ceremony at the St. Paul Labor Center. “They made it clear with their voices, they made it clear through advocacy, they made it clear with their votes, that they expect movement around climate change to happen, and it is happening today.”
Only Rhode Island and the District of Columbia have more aggressive dates for conversion to carbon-free generation than Minnesota.
The law establishes two standards for electric utilities to meet, one for use of renewable sources of electricity and one for carbon-free generation.
The renewables standard requires power companies to achieve the already established target of 25 percent by 2025, and includes a target of 55-percent renewable generation by 2035.
Anything that doesn’t emit carbon is considered to be carbon-free. That includes nuclear and hydroelectric, along with wind and solar. Nuclear power and some hydroelectric power sources aren’t considered to be renewable, but are carbon-free, hence the separate standards. The new carbon-free standard has targets of 80 percent by 2030, 90 percent by 2035, and finally to 100 percent by 2040.
The law provides some flexibility for utilities in meeting the standards by establishing renewable energy credits, or RECs. Power companies can buy these credits in lieu of hitting carbon-free or renewable goals as a way to offset their carbon emissions. A utility would also be able to ask the Minnesota Public Utilities Commission for an exception to the standards if implementing them would threaten affordability for customers or the reliability of the power grid.
Authors of the bill made some concessions on several issues of concern expressed by utilities, who have been transitioning generating capacity toward carbon-free sources for years. “We’re trying to make sure that we’re being responsive to legitimate questions and concerns while still keeping the overall framework and goals intact,” said the bill’s prime sponsor Rep. Jamie Long, DFL-Minneapolis.
One of those concessions was a nod to the challenges faced by rural electric cooperatives that are smaller and have fewer financial resources than the state’s major power companies. Cooperatives and municipal power agencies will only have to hit 60 percent carbon-free by 2030, rather than 80 percent. Targets for 2035 and 2040 remain the same.
Lake Country Power General Manager Mark Bakk was supportive of the change, noting that his company is fully on board with the shift to carbon-free.
“It’s the right thing to do, and we’ve been going that way for quite a while,” Bakk said. “We’re not opposed to carbon-free technology, none of Minnesota’s utilities are. This buys us some more time, which was helpful. We’ll take that first little bit on the initial milestone for sure.”
But that doesn’t mean the path to getting to the 100-percent goal will be easy, in part because some of the technology needed to get there still needs to be invented.
Challenges ahead
Annie Levenson-Falk, executive director of the Citizens Utility Board, a consumer advocacy group that supports the new targets, told a legislative committee that she “can’t sit here today and say, though, that Minnesota can for sure get to 100-percent carbon-free electricity on this timeline without issues. I think that advances in technology and grid management solutions will make it possible, but that last ten percent requires a bit of faith.”
Bakk agreed.
“Some of the technologies we will be depending on don’t exist,” he said. An effective means of energy storage remains a big piece of the puzzle, according to Bakk. “That technology isn’t developed yet on a scale that would be necessary to make this work.”
Bakk said market factors have been driving Minnesota utilities to move toward carbon-free technologies, and that the law mandating conversion by 2040 could have unintended consequences.
“Once there’s a mandate and you have to go a certain route, costs end up getting driven up by that,” he said. There’s a push to electrify different sectors of the economy. Transportation is a big one, but also there’s a push related to home heating technologies. We’re pushing to electrify more sectors of our economy, but at the same time a bill like this puts some pretty major hurdles on the supply side. On the supply side it’s a little harder to achieve as the demand side starts to exponentially grow. Simple economics will tell you that’s going to drive up the prices.”
Bakk noted that consumers are still paying on some traditional power plants that will have to be retired before they’re fully paid off.
“We’ll still need to recover the cost of what it took to build and modernize some of them,” he said.
Another challenge to meeting the targets, Bakk said, is the massive buildout of alternative carbon-free generating capacity that will be needed. He believes wind farms will be a major component of that, and described challenges associated with them.
“When you build wind generators you also have to build transmission to get that wind power to where the actual load is,” he said. “None of those things are all that easy. You’ve got to be able to site the wind farm, and for that you’re dealing with property rights with property owners. You’ve got to be able to plan and route and permit transmission lines, which has become more difficult as well, with a lot of the same issues as property owners. They’re not necessarily excited to see more transmission lines.”
Providing his 50,000 customers with a reliable source of affordable electricity is of utmost concern to Bakk, and the reliability issue is a shared concern of the Midcontinent Independent System Operator (MISO), the regional power grid operator serving members across 15 U.S. states and Manitoba. MISO manages power distribution and can shunt more power to areas during times of peak demand, but that task is growing more challenging.
“The rapid fleet change occurring in the MISO region is giving rise to a host of urgent and complex reliability challenges,” John Bear, MISO CEO, said in a report addressing reliability. “And fleet change is not the only challenge we face. Extreme weather events are becoming more frequent and severe. Electric vehicles and electric heating in homes and businesses are also poised to grow, which could exert new pressures on the grid in hours of the day and seasons of the year that rarely posed risks in the past.”
Bakk said he looked at the MISO load generating profile at about 6 a.m on one of the coldest days in the last two weeks. “It was about 80 percent coal and natural gas serving the load at the time, but those are things that would need to get replaced. That’s really significant,” he said. “How are we going to ensure reliability in periods of high demand and low wind and zero solar? Those are major concerns for us up here in northern Minnesota. If something happens in the winter related to reliability, that’s dangerous.”
Bakk said that cooperatives tried to get the Legislature to put a specific exemption in the law for natural gas peaking plants that can be run when reliability is an issue, but the proposal was rejected.
Republican lawmakers opposed to the bill questioned the validity of established science about human-caused climate change and argued the state’s moratorium on nuclear power should be lifted. Xcel Energy owns the only two nuclear power plants in the state and can count that energy toward the carbon-free target, an advantage no other Minnesota utility has. A subsequent bill introduced by Republicans calling for research into emerging modular nuclear technology could wind up in omnibus legislation later in the session. Bakk said he would favor such a move.
Despite the possible challenges, Bakk said Lake Country Power is committed to meeting the new targets. To do so, they will be working with their power supplier, Great River Energy, of which they are part-owner along with 27 other cooperatives. GRE has past success in hitting emissions targets. They hit a 2025 goal of a 30-percent reduction in CO2 emissions seven years ahead of schedule. Bakk said the current plan is to focus on obtaining more wind power contracts.
“It’d be a lot of additional wind, and then the additional transmission necessary to get that to where the load is.”


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