The Minnesota legislature agreed on a measure that mandates that large state utilities generate a certain amount of electricity from solar power, which is estimated to raise energy prices for state residents and businesses.
The Minnesota House passed a bill last week that would mandate that utilities get 4 percent of power from solar by 2025. The Senate bill, which also passed last week, imposes a 1 percent solar mandate by 2025. On Tuesday, both chambers agreed to a 1.5 percent solar mandate by 2020. The modified bill now goes back to both the House and Senate to be voted on.
Minnesota could be the 17th state to require a certain portion of power be generated from solar, and this requirement would go beyond the state’s renewable energy standard requiring that 25 percent of power come from renewable sources by 2025.
However, this move will only serve to force state residents to pay higher utility bills, according to the Center of the American Experiment ,a conservative think tank in the state.
The group estimates that electricity prices would rise two cents per kilowatt hour if the mandate becomes law, which would mean industrial ratepayers would see their power bills increase 30 percent. The group also predicts that the mandate would cause the manufacturing, retail and hospitality sectors to shed from 12,000 to 49,000 jobs.
“The idea that lawmakers can on net create jobs by mandating the purchase of any product defies common sense,” writes Peter Nelson, policy director at CAE. “Lawmakers are just not equipped to allocate the state’s resources to more productive uses that create more jobs.”
Furthermore, adding the 150 megawatts of solar power that would be required will be expensive, said Julie Pierce, manager of long-term resource planning for Minnesota Power. The 150 megawatts would require the 2,250 acres of solar panels, and the solar power is about four time as expensive than wind turbines.
The Duluth News Tribune reports: “Minnesota Power is producing energy from North Dakota wind turbines for about $20 per megawatt hour with federal incentives, or about $50 without, when the cost of buying and installing the turbines and transmission lines is averaged over their lifetimes. That compares to an estimated cost of $200 per megawatt hour for solar.”
The House and Senate bills would exempt iron and taconite mining operations as well as wood products plants from higher energy costs associated with the solar power mandate, The House bill also exempts rural electric cooperatives and municipal utilities, about one-third of the state.
“It’s a big trade off. These carve-outs for some big industries are disappointing,” said James Hietala of Duluth, a local Sierra Club clean energy committee member. “But the sense was just to get anything passed was a big step this year. This (solar mandate) is an important first step, and I guess something is better than nothing.”
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