Minnesota House, Senate support storm-related relief, but far apart on other energy-funding issues

The Minnesota Home and Senate are in uncommon settlement on a major power subject: cushioning the monetary blow to Minnesota pure gasoline clients from sky-high payments because of pure disasters.

However because the Legislature reconvenes Monday after a weeklong break, the DFL-controlled Home and Republican-controlled Senate are nonetheless far aside on energy-spending proposals.

The Home needs to spend $120 million subsequent fiscal yr alone. About $30 million can be for weatherization efforts aimed toward low-income residents, whereas one other $20 million would go to a brand new state power fund.

The Senate’s power invoice requires spending $13.6 million within the subsequent fiscal yr, and is silent on the Home’s big-ticket objects.

Funds to cowl storm prices

Separate payments launched in each chambers would offer $35 million to shore up Minnesota municipal utilities battered by a February 2021 winter storm that brought on an enormous spike in pure gasoline costs.

The storm froze unweatherized gear in U.S. gas-producing areas — significantly Texas — inflicting Midwest gasoline costs to rise 4,500 % at one level. Minnesota municipal gasoline utilities had been saddled with as much as $35 million in further prices.

“We spent a yr’s price range in three days,” mentioned Kent Sulem, authorities relations director for the Minnesota Municipal Utilities Affiliation, which represents 33 gasoline utilities with about 90,000 clients.

A number of municipal utilities dug deep into their reserves to pay the additional prices. With out replenishment, “on the finish of the day [the burden] would come again to ratepayers,” Sulem mentioned.

Laws that has handed each the Senate and Home power committees would plug the reserve hole. It might additionally permit tax credit for municipal utility clients whose payments had been bloated by the superstorm.

Laws additionally requires a tax credit score for patrons of investor-owned utilities. Nevertheless, there is no particulars on funding such a tax credit score, and the tab might price taxpayers at the very least $300 million.

Storm-related gasoline prices for investor-owned utilities — who serve way more Minnesotans — are exponentially increased than these for municipalities: $660 million. By state regulation, investor-owned utilities’ gasoline prices are handed down on to customers.

The Minnesota Public Utilities Fee (PUC) continues to be investigating whether or not the state’s investor-owned utilities will be capable to recuperate that full quantity.

Within the meantime, the PUC allowed the state’s two largest gasoline utilities — CenterPoint Vitality and Xcel Vitality — to gather extraordinary storm prices over 63 months. Two different gasoline utilities are recovering these prices from ratepayers over 27 months, as is Xcel for non-residential clients.

Payments that handed the Home and Senate power committees would permit investor-owned utilities to gather such disaster-related surcharges over even longer durations of time, thus cushioning the blow to customers.

The laws additionally would permit gasoline utilities to create special-purpose subsidiaries that might subject “extraordinary occasion” bonds of as much as 30 years.

Such low-interest bonds can be backed by streams of money from buyer funds. Bonds might be issued for large gasoline value spikes brought on by climate and different pure disasters, in addition to sabotage and terrorism, together with cybersecurity breaches.

CenterPoint, the state’s largest gasoline utility, is pushing for the laws, which is also supported by the Residents Utility Board of Minnesota, a ratepayer watchdog.

Weatherization, competitiveness funds

Permitting utilities to cushion extraordinary gasoline prices is without doubt one of the few commonalities between the Home and Senate power payments.

With a document $9.25 billion state price range surplus, two-thirds of funding for the $120 million in spending proposed within the Home invoice would come from the taxpayer-fueled common fund.

The remaining would stream from the state’s Renewable Improvement Account, which is financed by annual funds from Xcel for permitting the utility to retailer nuclear waste at its Prairie Island nuclear energy plant.

The Senate’s common power invoice requires spending $4.3 million from the final fund and $9.3 million from the renewable account.

The largest-ticket merchandise within the Home invoice is $30 million to broaden the state’s residence weatherization program for low-income residents, at the moment funded with federal {dollars}.

“At our present price, it will take about 300 years to weatherize all eligible properties,” mentioned Rep. Jamie Lengthy, DFL-Minneapolis, head of the Home Vitality and Local weather Committee. “Now we have a necessity, and we’re not assembly it.”

Weatherization each conserves power and lowers heating payments.

The second-largest merchandise within the Home invoice is $20 million — half from the final fund, half from the renewable account — for a “state competitiveness account.” It might put money into a variety of power initiatives, significantly efforts to make the electrical grid extra resilient to excessive climate.

The account would fund each analysis — say at Minnesota universities — and utility efforts to spice up grid reliability. The fund can be significantly advantageous to small Minnesota electrical utilities.

Crucially, it will permit the state to get matching cash from the federal infrastructure invoice handed earlier this yr by Congress.

“It’s going to assist us draw federal infrastructure funds, and there are numerous these funds out there,” mentioned Grace Arnold, the Minnesota Division of Commerce’s commissioner.

The pinnacle of the Senate’s Vitality and Utilities Finance and Coverage Committee, Sen. David Senjem, R-Rochester, mentioned he’ll nonetheless check out the state competitiveness fund and elevated weatherization funding.

“We need to compete and never go away federal cash sitting in Washington,” he mentioned. Nevertheless, he added: “There’s a lot we do not perceive about how this federal cash is rolling out to us.”

Senjem mentioned he has a “weatherization invoice” and plans to carry a listening to. “It’s nonetheless very early within the course of, and we’re not even in convention but.”

Nonetheless, he mentioned he is skeptical the Senate would applicable the quantity of weatherization cash proposed by the Home; its spending priorities are completely different.

“The Senate is clearly targeted on public security and tax reduction,” Senjem mentioned.