Federal funds bankroll MN’s carbon-free electricity by 2040 mandate
The Star Tribune wrote an in-depth piece on the widespread fears of utilities that President-elect Donald Trump will repeal the subsidy-soaked Inflation Reduction Act of 2022. What the article tacitly admits, though, is that federal subsidies like those in the IRA are what utilities are counting on to achieve Minnesota’s mandate for 100 percent “clean” electricity by 2040:
President-elect Donald Trump’s promise to cut off money from President Joe Biden’s massive climate law would upend the plans of Minnesota’s energy industry, which is expecting billions in federal subsidies to help it meet a state deadline for a carbon-free electric grid.
In the two years since a Democrat-controlled Congress passed the Inflation Reduction Act, it has become a fixture in the energy landscape for developers, power companies in big cities and small nonprofit cooperatives in rural areas.
Those utilities have penciled in billions in benefits for new infrastructure over more than a decade that will save customers money. Xcel Energy alone is banking on $5.7 billion by 2040 in Minnesota and the Dakotas…
Still, state law requires carbon-free power generation in Minnesota by 2040. Many utilities are baking IRA money into their future plans to meet climate goals.
Xcel Energy is planning roughly $13 billion in spending before 2030 in Minnesota and the Dakotas.
The company wants to build new wind and solar power, roll out major battery projects, keep its old nuclear plants running and open at least one new gas plant. It also wants to build new power lines and upgrade existing infrastructure. That will help it comply with the 2040 law, keep the lights on, and also meet growing demand for power driven largely by data centers and electric vehicles.
Xcel spokesman Theo Keith said the company uses IRA credits and grants to lower electricity rates for customers and is working to “educate lawmakers on the many positive impacts for their constituents.”
Whether or not “Republican-dominated” states and congressional districts are receiving more funds for clean energy is irrelevant to the fact that taxpayers from the rest of the U.S. are bankrolling it. The projected cost of the law was $369 billion, but Goldman Sachs estimates the IRA will cost $1.2 trillion dollars when all is said and done.
It isn’t the job of the U.S. taxpayer to bankroll Minnesota’s bad energy decisions. American Experiment’s modeling found that the true cost of the 100 percent clean electricity mandate would cost $313.2 billion through 2050 and lead to devastating blackouts.
One solution would be for utilities to be honest with their ratepayers about the cost of a transition to wind and solar electricity generation, then bring those concerns to lawmakers in Saint Paul to advocate for affordable and reliable electricity instead of mandates. (While I’m at it, I’d also like Santa to bring me an autographed picture of Bigfoot this year). It’s far more likely that utilities will head to Washington to try to keep the IRA intact.