Francis Menton: When the costs hit home, nobody will give up fossil fuels
The article below was written by Francis Menton at the Manhattan Contrarian: As noted in my post this past Sunday, no amount of fake happy talk in the so-called “Glasgow…
Democrats on the Minnesota House of Representatives Energy and Climate Finance and Policy Division Committee have dropped a 78-page omnibus bill that is chalk full of energy-illiterate language. I’ve summarized some of the items in the omnibus below.
Governor Walz’ Energy Illiterate Green New Deal
Different legislation, same bad policy. This legislation would require Minnesota’s electricity sector to be 100 percent free of carbon dioxide emissions by 2050. However, just like earlier versions, this bill does not allow for new nuclear power, allow large hydro to count toward the mandate, or allow for carbon capture and sequestration.
As such, this policy would cause massive increases in electricity prices for no measurable environmental benefit.
Our new study found increasing Minnesota’s renewable energy mandate to 50 percent by 2030 would cost our state $80.1 billion to meet this standard and maintain a reliable electric grid through 2050. This enormous cost would increase electricity prices by more than 40 percent, and cause the electric bill for the average Minnesota household to increase by $375 per year.
Despite the enormous burden placed on the budgets of residents of our state, it would have zero measurable environmental benefits. Greenhouse gas emissions from Minnesota electric utilities represent 0.00075 of global carbon dioxide emissions. A completely ‘carbon free’ Minnesota would avert only 0.00073 degrees C of future warming by 2100, according to the same climate models used by the Obama Administration. This amount is too small to be accurately measured with even the most sophisticated scientific equipment.
Governor Walz should actually ‘follow the science,’ for a change, and realize this proposal is all pain and no gain for Minnesota’s families and communities.
Heartier Handouts for Community Solar
The Omnibus bill triples the size of the solar gardens that are eligible for the program, increasing from 1MW to 3MW of capacity. Additionally, the legislation concentrates the power to administer the Community Solar program in the Department of Commerce. This is very bad news, because this is the same Commerce Department that doesn’t think we need Line 3. If passed, this would mean the Commerce department would be the one calculating the rate that subscribers would be paid and submitting the rate to the Public Utilities Commission for approval.
All of these factors likely mean there will be a lot more scenes like the one below.
Remember, there was a recent news story that found it was not cost effective to clear the snow off of solar panels, even though these solar panels are compensated for electricity at a rate of $135 per megawatt hour, which is four times more expensive than electricity generated at our coal plants. How can anyone seriously argue solar is a cost effective option if it is literally too expensive to make sure they work in the winter, even with that sweet deal?
Green Jobs Guarantees:
The bill also has language for “maximizing benefits to all Minnesota citizens, balancing and local workers throughout the state,” and “the creation of high-quality jobs in Minnesota that pay wages that support families.” Has nobody told the members of this committee that Minnesota utilities are increasingly building wind projects in the Dakotas? That means we’ll have all of the pain of higher electricity prices for none of the jobs.
No Retrofits for Coal or Gas Plants:
The section below essentially outlaws affordable energy unless utilities go to great lengths to prove fossil fuel plants are needed to maintain affordability or reliability. Hint: They will be needed because wind and solar are unreliable, but this will give Xcel Energy a blank check to build wind turbines and solar panels to pad their ratebase in the meantime.
(a) In order to achieve the greenhouse gas reduction goals under section 216H.02, and the carbon-free standard under section 216B.1691, the commission shall not approve a new or refurbished nonrenewable energy facility in an integrated resource plan or a certificate of need, pursuant to under section 216B.243, or in any proceeding in which a utility seeks to construct an electric generating facility or procure electricity or capacity, nor shall the commission approve a power purchase agreement for power with a nonrenewable energy facility, or allow rate recovery pursuant to under section 216B.16 for such a nonrenewable energy facility, unless the utility has demonstrated by clear and convincing evidence that a renewable energy facility alone or in combination with other clean energy resources, is not in the public interest.
Utilities are no Longer Required to Provide a Cost Estimate that Does Not Take Environmental Externalities into Account:
“When considering the costs of a nonrenewable energy facility under this section, the commission must take into account only non-zero values for the environmental costs required to be analyzed under subdivision 3, including both the low and high values of any cost range adopted by the commission.”
This one is wonky but problematic. Essentially, utility companies are currently required to provide one cost estimate that does not take external factors, such as emissions of various substances, into account in their modeling for cost, although they must also provide cost models that do take these costs into account.
The models that do not attribute cost to these external factors almost always show there is no financial benefit from switching away from our current fuel mix, which is bad for utility companies seeking to pad their ratebase. This is why Xcel Energy lobbied for the highest cost on carbon dioxide when the Public Utilities Commission was determining a social cost for each ton of carbon dioxide, known as the Social Cost of Carbon. Essentially, Xcel wanted the cost of carbon to be high so they could shut down their coal plants and build more wind and natural gas plants, thus padding the ratebase.
However, it would now be prohibited for the PUC to take the models that do not account for external factors into consideration for making decisions. This is bad policy because if denies the public the lowest-cost estimate, and leaves the conversation defined by very squishy values, like the Social Cost of Carbon, that are essentially arbitrary costs used to obscure the benefits of affordable energy.
$2,500 Rebates for Electric Cars:
There is already a federal tax credit for $7,500 on new electric cars, but this nugget in the omnibus would provide a $2,500 state rebate for electric cars, increasing your total burden to $10,000. The rebate doesn’t apply to cars that cost more than $60,000, but when was the last time your family bought a car that expensive? This is a wealth transfer from low and middle income families to wealthy liberals so they can buy an electric car. This is where your 20 cent per gallon gas tax is going.
P.S. You’ll also be subsidizing electric vehicle charging stations on your electric bill.
Metropolitan Council Buses Must be Electric:
“After the effective date of this act and until the appropriation made in section 2 is exhausted, any bus purchased by the Metropolitan Council for Metro Transit bus service must operate solely on electricity provided by rechargeable on-board batteries.”
$8.8 million would be appropriated from the renewable development fund to pay for these electric buses.
This isn’t going to end well. Electric buses cost more than diesel buses, and we saw electric vehicles lost up to 40 percent of their charge when it is 20 degrees above zero. How is it going to improve the reliability of public transit if we switch to buses that will have to be charged every few hours?
$6 Million for the U of M for the “Energy Transition:”
$6 million would be appropriated to the U of M so they can continue to publish meandering opeds in the Star Tribune that demonstrate that the Energy Transition Lab doesn’t really understand energy.
It is pretty remarkable how the DFL has jumped the shark on energy issues. The fact that there was no language to legalize new nuclear plants or lift the ban on large hydro counting toward the carbon free standard means these legislators simply don’t care about reducing carbon dioxide emissions, or the massive costs that will be borne by Minnesota families and businesses if these proposals are signed into law.