A Minnesota House committee has approved legislation that would create challenges for small-scale solar development in the state.
The House Job Growth and Energy Affordability Policy and Finance Committee on Jan. 17 moved forward two bills that directly affect the renewable energy industry: HF 235, which would repeal the state's "Made in Minnesota" solar incentive program, and HF 234, which would exempt rural electric cooperatives and municipal utilities from having to work with the Public Utilities Commission, or PUC, to resolve net metering issues. The committee sent both bills to the House Ways and Means Committee for review, an aide to the House said by phone. The committee also passed HF 113, which gives Xcel Energy Inc. authority to install natural gas generation to replace coal units at the Sherburne County Plant (Sherco) plant, co-owned by Xcel and Southern Minnesota Municipal Power Agency.
Rep. Marion O'Neill, a Republican who is the lead sponsor of HF 235, called the Made in Minnesota solar program "expensive" because it encourages customers to purchase panels from a "small group of Minnesota companies, paying as much thirty-one times the market rate for the energy produced," according to a Jan. 17 legislative update posted on the House's website.
"The program is allotted $15 million a year and is paid by Xcel Energy ratepayers into a 'renewable energy fund,' essentially meaning it's average Minnesotans subsidizing this boondoggle that benefits only a few," O'Neill said.
Shifting funds
The bill directs Xcel to shift funds from its renewable development fund into a new energy fund account held by the state treasury. It is not clear from the bill how the new fund would be spent. In her legislative update, O'Neill said that the Made in Minnesota solar program should be repealed so that legislators can "better invest our dollars in clean, cost-effective and innovative energy solutions." O'Neill could not be reached for immediate comment on what those solutions might be. O'Neill's district includes Monticello Township, home to the Monticello nuke plant owned by Xcel.
Lynn Hinkle, policy director for the Solar Energy Industries Association's Minnesota chapter, said HF 235 would have a "significant" impact on the development for small-scale solar. Hinkle, who has been covering solar policy issues for the trade group since 2009, testified during the Jan. 17 committee meeting.
The bill could also have implications for Xcel's Solar*Rewards program, which provides incentives for residents and businesses that install solar systems up to 20 kW in size per system. Collecting payments from Xcel's Minnesota and Wisconsin ratepayers, the renewable development fund is used for performance-based incentives for renewable energy, including the Solar*Rewards program and research and development for renewable technologies. From 2006 to 2014, according to a 2015 report from Xcel to the Minnesota legislature, the fund has provided more than $250 million for renewable energy initiatives.
Though HF 113 does not directly target the wind and solar sector, it would still affect the growth or renewable energy, Hinkle said by phone. Xcel announced in October 2016 the acquisition of 750 MW of wind capacity to help replace Sherco's two older units, totaling 1,362 MW of capacity. HF 113, sponsored by Rep. Jim Newberger, R-Minn., gives preference to a new natural gas plant at Sherco by exempting the construction of gas plants from the PUC's certificate-of-need permit process. The committee reported HF 113 to the House, but it still too early to tell whether the House will take up the bill, an aide to the House said.
The Republican majority grew in the state's last election, with Republicans outnumbering Democrats in the House by 19 members and by a single member in the Senate.