Mpls. municipal electric utility hearing packed

Municipal utility supporters
Dylan Kesti, with the loudspeaker, of Minneapolis Energy Options speaks at a rally in front of City Hall on Thursday, Aug. 1, 2013. The group wants the city to consider forming a municipal utility.
MPR Photo/Elizabeth Dunbar

In a packed public hearing today, the Minneapolis City Council heard from dozens of people on whether the city should form its own gas and electrical utilities.

Prodded by environmentalists who say the utility companies aren't doing enough to combat global warming, some council members want voters to decide if the city should pursue forming a public utility. The city's franchise agreements with CenterPoint Energy and Xcel Energy expire next year.

Citizens on both sides of the issue gave council members an earful today at a packed public hearing. The council needed two overflow rooms to accommodate everyone.

Before it began, about 150 members of Minneapolis Energy Options gathered outside City Hall in their yellow T-shirts, chanting "What do we want? Clean energy! When do we want it? Now!"

Utility hearing
Supporters and opponents of a move by the city of Minneapolis to form a municipal utility spoke at a public hearing, Aug.1, 2013.
MPR Photo/Elizabeth Dunbar

"With the science of what is going on in our world today, we are going to have to make radical changes to the way we live," said Javier Morillo, president of Service Employees International Union Local 26, who spoke at the rally. "And we better be on the front end of that."

Concerns about climate change have been the main driver of discussions about forming a municipal utility. The city's Climate Change Action Plan calls for a 30 percent reduction in the city's greenhouse gas emissions by 2025.

But inside the City Council chambers, the voices against the proposal outweighed those in favor for most of the hearing. Most of those who spoke were limited to three minutes apiece. But the council gave the two utilities more time to present their arguments.

As CenterPoint Energy has already negotiated with Minneapolis Energy Options and committed to reducing emissions, most of the hearing focused on Xcel.

Laura McCarten, a regional vice president for Xcel, told the council it could cost the city "billions" to buy all of Xcel's power lines and assets and begin running its own operation.

"You would be responsible for billing, new construction, power outage restoration, the Cold Weather Rule, and hundreds of other issues that utilities deal with every day," McCarten said. "Because it is a complex business. We see this turning into a lose-lose scenario pretty quickly."

Some critics of the ballot measure pointed out that unlike Xcel, as a municipal utility Minneapolis wouldn't need state approval to raise rates. Citizens and business groups who spoke against the proposal cited the potential for higher utility bills.

Larry Lura said it would hurt low-income residents the hardest.

"That's going to pull more money out of my pockets and people like myself who in a marginal economy where we can barely pay our own bills," he said. "It would be a detriment to myself and people like myself who are just barely making it.

"We gain nothing by becoming an island."

Bill Jonason, president of the Minneapolis Regional Chamber of Commerce, said by forming a municipal utility, Minneapolis would cut itself off from a system that's working well.

"You would abandon a regional power system operated by a company that is a national leader in wind and other sustainable sources of energy," Jonason said. "This arrangement works because the city has the right partners and because Minneapolis is part of a regional system. Let's not try to fix something that isn't broken while many other areas demand our attention."

But supporters emphasized that even if voters do direct the city to form a municipal utility, leaders could decide not to.

Community organizer Timothy DenHerder-Thomas said the city should at least consider a change.

"I think the core question here that's in front of us is: Does it make sense, for Minneapolis to join cities like Seattle, Los Angeles, San Antonio and Omaha to pursue their own utilities, and can that deliver the types of improvements in lower rates and more reliable energy and more clean energy that other cities have been able to achieve," he said. "I believe we should at least find out."

A study is underway to explore the city's options, but it won't be done until after the November election, when voters could ask the city to move forward with forming its own utility.

The City Council is expected to vote in two weeks on whether to give voters that choice.

Editor's note: A previous version of this story incorrectly described the type of study being conducted by the city.

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