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Minneapolis Adds $2 Million Climate Surcharge to Utilities

When it comes to innovative ways to wring more revenue out of residents,  you’ve got to hand it to Minneapolis.  The Minneapolis City Council plans to hike utility bills next year by $2 million over and above the already higher than ever gas and electric rates on the books.

Why? The Star Tribune headline says it all: “Minneapolis is using electric bills to fight climate change.”And ratepayers are supposed to feel as good about their involuntary contribution as their elected officials who imposed it.

The City Council raised its franchise fees — payments that Xcel Energy and CenterPoint Energy collect from customers and pass to the city — when it adopted its 2018 budget. The increase will cost a typical homeowner about an extra $7 per year, and the city plans to spend the $2 million in new revenue on climate and energy programs.

A growing group of residents and advocates alarmed by climate change consider the higher fee a small victory in the larger struggle to make local government a leader in combating climate change. Cutting greenhouse gas emissions further and encouraging residents to do the same are long-term goals at City Hall.

“It’s important to residents that we’re doing our part, that we are responsible for our contributions to this global problem and its solutions,” Council Member Andrew Johnson said. “We can always do more. I think there’s an appetite to do more.”

It’s a continuation of policies that led to Minneapolis being one of 16 cities designated as Climate Action Champions by the Obama administration. But apparently not everyone’s on board. The story includes criticism of small businesses and homeowners for being more concerned with minding their own business than saving the environment.

Small commercial property owners are more difficult for conservation advocates to reach and often have more pressing concerns than energy efficiency, said John Farrell of the Institute for Local Self-Reliance and a member of the Minneapolis Energy Vision Advisory Committee. And the city has fallen far short of its goal of retrofitting homes, with perhaps 15 percent retrofitted for energy efficiency, Farrell said.

“That 75 percent retrofit goal is the one that most starkly stands out,” Farrell said. “We’d have to increase the rate at which we’re reaching people and improving properties by almost tenfold over the next eight years in order to meet that goal, and I don’t know that the city can be successful, frankly.”

Never mind that for the first time, average electricity prices in Minnesota have been registering above the national average in 2017. American Experiment’s recent report, “Energy Policy in Minnesota: The High Cost of Failure,” tracks the rise in electric rates at a time of a massive $15 billion  investment in wind farms and transmission lines in the state. Co-author Stephen Hayward shared the report’s conclusions in a recent op-ed.

Minnesota’s notable electricity cost advantage has disappeared. For most of the last 25 years, Minnesota’s electricity prices were about 20 percent below the national average. But over the last five years — when renewable capacity was expanded at a fast pace — Minnesota’s cost advantage has rapidly disappeared, and in March for the very first time Minnesota’s electricity prices rose above the national average.

On top of that, Minnesota has squandered its historic advantage in electric costs without making much of a dent in the state’s greenhouse gas emissions.

The real embarrassment is that renewable energy is not achieving significant reductions in carbon dioxide emissions. Between 2005 and 2014, Minnesota’s CO2 emissions fell 6.6 percent (and much of this reduction was achieved by greater use of natural gas, not wind), while the nation as a whole reduced CO2 emissions by 9.3 percent. In fact, over the last two years, greenhouse gas emissions from electricity in Minnesota have risen, even as more wind power was installed.

But when it comes to global warming, the facts have as little impact on leftists as the state’s energy policy has on CO2 emissions. So Minneapolis will make it more expensive for residents to turn on the lights and heat, regardless of the outcome.




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