On Tuesday, the Senate Energy and Utilities Finance and Policy Committee held an informational hearing that included an introduction and overview of regional energy markets presented by the Midcontinent Independent System Operator (MISO) Executive Director of External Affairs Brian Tulloh. MISO is a not-for-profit member-based organization that ensures reliable, least-cost delivery of electricity across all or parts of 15 U.S. states and one Canadian province. In cooperation with stakeholders, MISO manages approximately 65,000 miles of high-voltage transmission and 200,000 megawatts from 6,600 power-generating resources across its footprint. He shared with the committee that Minnesota is a net importer of electricity in the MISO system, as it consumes more electricity than it generates within state borders. In Minnesota, energy from coal power plants largely comes from North Dakota, wind energy flows from North Dakota, South Dakota and Iowa and hydro energy is from Manitoba.
MISO also highlighted their recent study called the Renewable Integration Impact Assessment, which they released last year. With increasing renewables on the regional grid, the study showed that when renewables reach a level of 40% of the generation, that there are integration complexities that would occur with the functionality of the grid to in order to provide both baseload power from coal along with intermittent sources of power such as wind and solar. There are tradeoffs that would be necessary between renewable curtailment and transmission investment, increased flexibility requirements (ramping from conventional generation) and increased system stability concerns. Increasing variability due to renewable generation would require generators to perform differently than they do today. Charts presented to the committee showed the variability of wind over 24-hour period and how coal and gas plants ramp over the same period. At 40% renewables, there would be a larger quantity of hourly variability that would require increased flexibility, which results in more curtailments and ramping capability. With more wind, there would be much more ramping from coal and gas plants, which is very hard on the equipment causing a lot of wear and tear. After this presentation concluded, the chair of the committee commented that to him it looks like that the more renewables placed on the grid, the more difficult the management and operation of the transmission system becomes.
Three Lignite Energy Council members also testified at the hearing with representatives from Minnkota Power Cooperative, Minnesota Power and Otter Tail Power. Each company presented overviews of their company, service territory and energy generation mix. They also shared their experiences during the recent polar vortex in which MISO issued an emergency maximum generation event. During that extreme weather period, wind powered energy had very low output due to the lack of wind that was available combined with freezing temperatures that require the towers to shut down to avoid damage. The baseload coal power plants accounted for over half of the energy generation on MISO’s system wide grid during the multiple day period. Each of the LEC member companies explained to the committee that while each type of energy resource brings value and positive attributes to the overall portfolio the utilities need to have both flexible and dispatchable resources in order to provide stability.
Their experience with the polar vortex proved that having reliable baseload power is very important during extreme weather events because coal plants were able to provide power to thousands of customers in the region during a difficult situation when other resources were not available. LEC members shared their beliefs that it is important for policy makers to learn from this event to make sure that we can keep the lights on and better understand what the benefits are from having a diverse energy resource mix that includes baseload lignite power.
In the House Energy and Climate committee, the MPCA presented to the on their budget request on Tuesday, asking for an additional $250,000 for climate outreach and engagement to conduct statewide meetings, to understand local needs and assist in building a green economy. Regarding electric vehicles, the MPCA proposes accelerating the placement of charging infrastructure around the state, funded by a $25 increase in EV registration fees. The committee also heard HF1022 from Rep. Jamie Long (DFL-Minneapolis), one to increase funding to the existing solar energy incentive program.
On Thursday, the House Energy and Climate committee heard from the Department of Commerce on their budget request. The department is requesting $1,400,000 in FY20 for litigation costs resulting from the 2011 lawsuit over the Next Generation Energy Act. In November 2011, the State of North Dakota and several private companies led by the Lignite Energy Council sued the Minnesota Public Utilities Commissioner s (PUC) and the Commissioner of Commerce. The suit claimed that Minnesota’s Next Generation Energy Act (“NGEA”), which was passed by the Legislature in 2007, unlawfully regulated North Dakota utilities, was preempted by federal law, and was constitutionally invalid. The United States District Court found against Minnesota. The District Court, as affirmed by the 8th Circuit on August 14, 2018, awarded $1. 4 million in attorney’s fees and costs.
In August 2018, the PUC and Commerce entered into a payment agreement with North Dakota and the other private companies to pay the attorney’s fees and costs judgement. The PUC and Commerce have made an initial payment of $360,000 toward the judgement obligation. The outstanding balance of the judgement, $1,050,000 must be paid by July 31, 2019 and is divided evenly between the two agencies.
The committee also heard HF1683 from Rep. Long which requires a utility to provide a customer with access to the customer’s own energy usage data free of charge, in a comprehensible format, and as close to real time as possible. Additionally, a third party may gain access to individual customer energy usage data only as authorized by the customer. There were major concerns highlighted by the utility companies and large energy users, such as iron mining companies, that the bill could have various unintended consequences regarding personal and corporate data privacy, security risks and threats to confidential utility information. The bill was laid over for possible inclusion in an omnibus bill.