Utility: 25 by '25 mandate will cost 

A new state law requiring more Minnesota electricity to be produced from renewable resources is good for the environment but will hit customers in the wallet, Moorhead Public Service Commission officials say.

The law, dubbed the “25 by ’25″ initiative, calls for one-fourth of most Minnesota electricity to come from renewable resources such as wind by 2025. The measure sets an early benchmark of 7 percent by 2010 and steadily increases that percentage over the next 15 years.

Public Service Commission President Ken Norman said he sympathizes with environmental concerns.

“I’ve got grandchildren,” he said. “I think long term, anything we do to clean up the environment” is good.

But he’s also concerned about the implications of the measure. Wind power is one of the primary renewable power sources now available, though there are other renewables such as solar power and the burning of biomass. But the reliability of wind power ““ or the lack thereof ““ is an issue. Wind power only works when the wind is blowing, Norman said. There are no giant batteries to hold the power. It has to be used as it’s produced.

When the temperatures reach 30 below zero as they do in this area, the power source has to be there, Norman said. “Up here, it’s a matter of survival.”

Complicating matters is the proposed Global Warming Mitigation Act in Minnesota. A provision of that bill would block the Big Stone II coal-burning plant project, State Rep. Morrie Lanning, R-Moorhead, said. Lanning and State Sen. Keith Langseth, DFL-Glyndon, supported the “25 by ’25″ initiative, but also say that plants such as Big Stone II are needed to supply the on-demand power availability that wind can’t.

The Big Stone II project includes construction of transmission lines that could also be used to transmit wind power, Lanning said.

The kind of renewable sources of energy production proposed by the “25 by ’25″ initiative are more expensive to operate than coal-burning plants, MPSC officials say. And a great deal of infrastructure will be necessary to supply the requirements of the “25 by ’25″ legislation.

You don’t have to look too far for examples of that expense. Moorhead produces its own wind power with two wind turbines it owns. They cost $700,000 each, and there are regular $7,000 and $6,000 insurance and scheduled maintenance fees. When one of the turbines needed a new gear box, the MPSC had to swallow about $130,000 in repairs, MPSC Energy Services Coordinator Kevin Bengtson said.

In addition to building the renewable energy-producing structures themselves, there is the expense of the transmission infrastructure to get the power where it needs to go once it’s produced, MPSC officials said.

The direct effect of the law falls on energy producers and not the local utilities, MPSC Manager Bill Schwandt said. But he believes local utilities will be affected by the almost-certain rise in energy-production costs.

And these sorts of expenses trickle down to customers in the form of higher rates.

As Lanning put it, “The only question is “˜How much higher.’ “

Despite the difficulties, Lanning believes the law serves an important environmental purpose.

“We need to expand the use of renewables,” he said. “There’s no ifs, ands or buts about that.”

Langseth said most people understand there is a problem with emissions. “We’ve got to correct that.”

Schwandt called the law “aggressive,” but added that it is also “likely doable.”

Moorhead already gets more than half of its power from a renewable resource ““ hydropower. But the “25 by ’25″ initiative only counts hydropower that comes from small and new hydroelectric facilities, Bengtson said. And Moorhead’s power does not.

Bengtson is frustrated that a significant piece of the puzzle is missing from the current power debate. He believes more attention should be focused on consumption.

All the talk is about “build, build, build; wind, wind, wind,” he said, but we need to look at the issue of reducing how much energy we use.

“We need to grow, but we need to grow efficiently; we need to grow smartly,” Bengtson said. MPSC sells electricity, but “we want our customers to use it as efficiently as possible.”

By J. Shane Mercer, The Forum
March 26, 2007
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Readers can reach Forum reporter Shane Mercer at (701) 451-5734