Keith Ellison Questions Xcel Energy’s Spending Plans Due to Rising Electricity Prices

Attorney General Keith Ellison’s office deserves some credit. The office of the Attorney General (AG) is pushing back against an attempt by the Minnesota Public Utility Commission (PUC) to fast-track billions of dollars in spending from Xcel Energy, according to a recent article in the Star Tribune. Such an increase in spending by the company would necessarily result in enormous increases in electricity prices for Minnesota families and businesses.

The Public Utilities Commission is Not An Economic Development Agency

Earlier this year, the PUC had asked utilities to submit plans to “spur economic development” during the COVID pandemic. This is highly unusual because the PUC is not an economic development agency and its job is not to bolster economic growth. Its job is to protect Minnesota families from paying too much for their electricity, and in this regard the agency has been asleep at the wheel for years. Now, the AG’s office is pushing back, according to the article:

“Minnesota utility regulators made an unusual call this spring.

They asked the state’s electric and gas utilities to pitch investments that could help jump-start the state’s economy, which has been hit hard by the coronavirus pandemic. Xcel Energy responded with a multibillion-dollar plan that it said could create 3,000 jobs.

Now, there’s debate over how much of Xcel’s proposal is needed — at least in the short term — and whether it could overwhelm ratepayers.”

Plus, the state Attorney General’s Office and Department of Commerce, while generally supporting the initiative, have raised questions about utility regulators’ ability to effectively measure economic-stimulus plans.”

…

Most Minnesota electric and gas utilities submitted rather modest plans to the PUC, but Xcel proposed $3 billion for a cornucopia of accelerated investments, a number that has since been whittled to about $2.5 billion.”

A $2.5 billion government-approved spending spree will undoubtedly cause electricity prices to increase dramatically.

Rates on the Rise

Just last week, Xcel Energy said it wanted to raise electricity prices by 20 percent to pay for nearly $600 million in new spending. Considering Xcel would be spending four times more money on wind and solar projects in their “COVID relief plan” than the current rate increase, electricity prices would presumably increase by 80 percent, though the utility has declined to say it yet.

Minnesotans are already suffering because our electricity prices have increased much faster than the national average due to spending on wind and solar. The AG’s filing with the PUC notes that Minnesotans are already struggling to pay their bills and that electricity keeps getting more expensive:

“It also said the state’s residential ratepayers are already “struggling both with the recession and rising utility rates.”

The Commerce Department similarly said the PUC’s expertise is not in “the ability of a project to stimulate economic development.”

The PUC’s main role is to ensure reliable service and protect Minnesota ratepayers — who ultimately fund most utility investments.”

It is refreshing that the AG’s office and the Department of Commerce appear concerned about rising electricity prices, but it’s their fault we’re in this position in the first place.

The biggest problem regarding energy policy in Minnesota is that elected officials, state agencies, and so-called “consumer advocates” don’t seem to understand the relationship between cause and effect.

The PUC, Department of Commerce, the AG, liberal lawmakers, and wind and solar special interest groups have been pushing policies that would result in more wind and solar facilities being built (which will costs tens of billions of dollars) for decades, but now they are unhappy or worse, “surprised,” when costs for consumers increase.

They can’t have it both ways. They can either prioritize high reliability and lower costs using sources of electricity generation like nuclear, coal, or natural gas, or they can promote low reliability and high costs by pretending that wind and solar can reliably and affordably meet our energy needs. They don’t get to be mad about the logical end results of the decisions that they make every day.

Fox, Meet Henhouse

Ultimately, the problem is that our regulators are in bed with the very same entities they are supposed to be safeguarding the public from. The fox is guarding the henhouse, and inviting his friends over for a party.

“The PUC in May — acting on a proposal by Commissioner Joe Sullivan — asked Minnesota’s utilities to identify investments and projects that could assist economic recovery from the coronavirus pandemic.

The PUC’s parameters include spending that would create jobs; provide “significant utility system benefits;” cut carbon emissions; increase access to clean energy; and “use women, veteran or minority-owned businesses to the extent possible.”

The PUC’s aims have been supported by environmental groups, the renewable-energy industry, labor unions, a ratepayer watchdog group and several social and economic justice organizations.”

It’s little surprise that the PUC’s proposals have been supported by these groups because they all stand to benefit financially from the results. The proposal from the PUC is simply another avenue for wealth redistribution that takes money away from Minnesota families and businesses and gives to the PUC’s preferred beneficiaries. This is classic crony capitalism, with a kiss from the regulators that are supposed to be standing up against this sort of crooked arrangement. Instead, of opposing this, they’re leading the charge.

We Agree with the AG on Electric Vehicle Rebates?

Another bright side in the AG’s position is that they agree with something Center of the American Experiment has been saying all along: subsidies for electric vehicle buyers disproportionately favor the wealthy:

“The attorney general also agreed with comments on Xcel’s EV proposal submitted by the Minnesota Citizens Utility Board (CUB), a ratepayer watchdog group.

The rebates will disproportionately benefit higher-income ratepayers who are less likely to be economically stressed by COVID-19, both organizations said.”

Conclusion

The year 2020 continues to get stranger. Ellison has shamefully politicized the AG’s office to prosecute conservatives who want to go to church under the auspices of preventing the spread of COVID, while allowing liberals to partake in massive protests and doing virtually nothing to punish the rioters that burned large parts of Minneapolis.

However, regarding the AG’s office showing some interest in protecting consumers for a change, it’s worth celebrating that the AG agrees with us, for a change. Things will only get better if policymakers are able figure out the relationship between cause (spending billions of dollars on wind and solar) and effect (rising electricity prices). Hopefully they figure it out before it is too late.