Inappropriate Discussion Between Xcel Energy, Public Utility Regulators
The Minnesota Public Utilities Commission (PUC) is a regulatory body that is supposed to protect Minnesota families and businesses from rising energy prices and to be a check on the power of government-approved monopoly utilities that you are forced to buy your energy from.
This relationship isn’t necessarily supposed to be antagonistic, but it isn’t supposed to look like a buddy cop film, either. Unfortunately, the PUC has become a cheerleader for Xcel Energy’s massively expensive proposals that raise the cost of energy for all Minnesota families rather than providing a check on monopoly utility power.
On January 5, 2021, the PUC held a “special planning meeting” with the regulated natural gas and electric utilities to discuss their legislative agenda for the year.
There is nothing wrong with a meeting between the PUC and utility companies they regulate, but some of the agenda and discussions during this meeting were highly irregular and inappropriate.
It is not the role of the PUC to listen intently to the legislative priorities of the entities that they regulate. The PUC’s job is to enforce the laws that the legislature writes and make sure the utilities are complying with these laws in the most cost-effective way possible, not to help utilities craft regulations or advocate for specific policy changes.
However, this is exactly what the PUC did during the meeting. This aspect of the meeting was particularly egregious because these government-approved monopoly utilities were outlining laws that would increase costs to ratepayers.
You can watch the meeting by clicking here.
At the 37:23 mark, PUC Chairwoman, Katie Sieben, asked Xcel for a favor. Chairwoman Sieben asked Xcel to meet with legislators to tell them that the PUC has been doing a great job keeping rates low for residential customers by foisting a massive price hike on commercial and industrial customers instead of residential customers.
Xcel Energy has increased industrial electricity prices in Minnesota by 100 percent since 2002, whereas industrial electricity prices only rose 40 percent nationally during this period, meaning industrial electricity prices for Xcel customers grew more than 2.5 times faster than the national average. Xcel’s industrial electricity prices are now nearly 18 percent higher than those paid nationally.
Rising electricity costs are bad because they make it more difficult for Minnesota manufacturers to compete with companies in other states and countries.
Some people argue that Xcel Energy is a victim of bad regulators and laws passed by the legislature. However, this argument doesn’t pass the sniff test because Xcel is spending massive amounts of money to actively craft the regulations they would be subject to.
In 2019, only two entities spent more money lobbying in Minnesota than Xcel Energy, Enbridge, and the Minnesota Chamber of Commerce, which represents thousands of individual businesses. Xcel spent $1.13 million on a team of 33 lobbyists (60 lobbyists from this count) at the PUC and the state capitol, actively influencing public policy.
Minnesota’s PUC is all too happy to abdicate its responsibility to ratepayers to help accomplish Xcel’s renewable energy goals without consideration for the cost burden it imposes on its held-hostage ratepayers. This is likely due to the fact that promoting wind and solar is a top priority of Governor Tim Walz, who has the power to appoint commissioners to the PUC.
The Commission is supposed to have a bipartisan composition. State statutes dictate that no more than three Commission members can be from the same political party. The PUC was structured this way to ensure ideological balance, but it has become ideologically biased over time because liberal Governors have appointed all current members.
As a result, the current Commission has three liberal members from the DFL, one independent member, who is left of the DFL, and one Republican member, who used to be a Democrat. This makeup has resulted in a Commission that promotes renewables over the interests of ratepayers.
There is no free market for electricity in Minnesota, meaning Minnesota families and businesses have no freedom to vote with their dollar to choose an electricity provider that keeps their costs low.
One potential solution to this lack of ideological diversity could be to change the way PUC members are selected. Changing the PUC from an appointed body to an elected body could help remind Commissioners that their primary responsibility is to the people of Minnesota and not monopoly utilities.
Furthermore, having one Commissioner from each Minnesota congressional district would ensure that Minnesotans from every corner of the state have a voice on the Commission. This would be a good opportunity for Governor Walz to make good on his pledge for One Minnesota.