Minnesota permitting reform is cautionary tale: CEI

The Competitive Enterprise Institute (CEI) examined Minnesota’s permitting woes in a new study, “Feeling Minnesota: A cautionary tale for permitting reformers.” While the federal permitting process is a severe obstacle for many projects, states have significant autonomy in implementing their laws and can streamline their own processes. Minnesota has the Minnesota Environmental Policy Act (MEPA), which requires state agencies and local governments to consider the environmental impacts of proposed actions.

Here are a few highlights from CEI’s report:

• In 2011, Governor Mark Dayton (D) issued Executive Order 11-04, which set specific goals for state agencies, including the Department of Natural Resources and the state Pollution Control Agency, aiming for decisions on environmental permit applications within 150 days of application competition, with a 30-day goal upon competition of environmental impact statements. The order also implemented electronic submissions systems for applications.
• By 2014, “over 97 percent of priority permits were being issued within the 150-day target.” However, priority permits more consistently meet their timeframe goals than routine, “non-priority” permits.
• Permitting inefficiencies became more pronounced as Minnesota pursued its 100 percent carbon-free by 2040 electricity mandate. CEI cites American Experiment’s Sept 2022 report which “estimated the costs of attaining the carbon-free electricity goal to be in the hundreds of billions of dollars, costing consumers thousands of dollars annually.”
• Between 2018 and September 2023, permitting for larger facilities and more complex projects took an average of 586 days to issue, with the longest permit taking 3,451 days (which is 9 years, 5 months, 2 weeks, and 2 days!).

• Permitting reforms in 2024 further streamlined permitting processes for renewable projects, but “these changes raised concerns about fairness” and cost increases for consumers.
• CEI notes that “the 2024 law clearly favors renewable energy projects in several ways,” including exempting many wind, solar, and energy storage projects from some requirements and relaxing transmission line requirements. CEI writes that, “there is a clear danger the legislation will increase costs for energy consumers by promoting rapid expansion of renewable energy projects and transmission lines.”

The report concludes:

The situation in Minnesota serves as a cautionary tale for other states considering permitting reforms. While streamlining processes can be beneficial, reforms must be carefully structured to ensure a level playing field and prevent harm to consumers. Effective permitting reform should include mechanisms to prevent unnecessary or inefficient infrastructure investments and ensure that consumer interests are protected alongside environmental goals. Minnesota’s experience demonstrates that well-intentioned reforms, if not carefully designed, can lead to an unfair system that creates winners and losers and ultimately burdens consumers with higher costs.

The report is part of a CEI series called Fast Track, which has so far detailed state efforts to streamline permitting in Minnesota, North Carolina, Louisiana, Washington, Arizona, Iowa, New York, Colorado, Virginia, and Pennsylvania.