Oil and water: The Line 3 debate

Line 3 fight brings PUC higher profile, lots of applicants

Protesters and supporters of the Enbridge Line 3 pipeline file up stairs.
Protesters and supporters of Line 3 oil 3 pack the Minnesota state Senate building for a commission hearing in November 2018.
Evan Frost | MPR News file

Minnesota Public Utilities Commission meetings were never known for their high drama. They were deliberate, dense and, to most casual observers, kind of boring.

Then came Line 3, the Enbridge Energy project to replace an aging oil pipeline across northern Minnesota. Suddenly, lots of Minnesotans wanted to know about the PUC, and wanted the PUC to know them.

The Line 3 debate brought waves of boisterous, overflow crowds, protests and press conferences, pushing the PUC's five commissioners to a place they had rarely been before — the public spotlight.

The commission recently approved permits for the controversial pipeline, but there's little chance the PUC will return to its wonky obscurity.

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With Minnesota's energy system on the cusp of a massive transition to one powered by decentralized, carbon-free, renewable energy, rather than large fossil fuel and nuclear plants, the commission is poised to assume an even higher profile moving forward.

Proof of that has come in the flood of applicants for an upcoming opening on the panel. PUC chair Nancy Lange's tenure is up this year, and the opening attracted more than 30 candidates for the position by Wednesday's deadline.

"I think part of the reason that there is a really big pool of candidates this time is because people really crave this big picture energy planning discussion," said Louise Miltich, one of the applicants and a climate scientist who oversaw the Minnesota Commerce Department's environmental review of the Line 3 project, which the department has sued to block.

"In this era of real political gridlock," she said, "I think the Public Utilities Commission is one space where people are realizing that those discussions can really still happen in a productive way."

'Bottom line' shifts

The five PUC commissioners serve staggered, six-year terms and are appointed by the governor. So, most years, one commissioner rotates off the board, and another is appointed.

The meetings are quasi-judicial, which means they operate sort of like a courtroom, with testimony and witnesses and rulings.

The subject matter can often be tough to follow.

"I mean, you know, we look at hedge contracts for natural gas, what proportion of the purchases of natural gas should a natural gas company be able to hedge, what's the price they're paying, what kind of long term contracts do they have," explained former commissioner Beverly Heydinger, when asked to describe what a typical meeting might cover.

"That is very daunting to the public which I completely understand," said Heydinger. "It's difficult for members of the public to feel they can fully participate in something that is so heavily document-intensive, where there are witnesses, and cross-examination."

The commission was first created in the 1800s to regulate railroads. Its primary function is to regulate the state's monopoly, investor-owned utilities, including Xcel Energy, and Minnesota Power in Duluth.

Line 3 deliberations at the Minnesota PUC
PUC proceedings aren't typically dramatic or emotional, but the commission's deliberations over the Line 3 oil pipeline brought both in June 2018.
Evan Frost | MPR News file

For a long time, that regulatory work was fairly predictable. Utilities had a few really big, mostly coal-fired power plants, and long transmission lines to carry electricity to customers.

State regulators, for the most part, focused on keeping that electricity reliable and cheap, said Ellen Anderson, director of the Energy Transition Lab at the University of Minnesota and a former commissioner.

"Basically that was the bottom line," she said. "What's the lowest cost option?"

Now, that energy system is being flipped on its head. Electricity is being produced all around the state, in wind farms, community solar gardens, and on homeowners' rooftops, and in the future, will be increasingly used to power our vehicles.

And the PUC, experts say, along with the Legislature, the regional electricity grid operator and other players, will play an increasingly important role in guiding the state through this transition to a more decentralized, increasingly carbon-free energy sector.

'Never come up before'

Anderson argues the Minnesota commission needs to do a better job of balancing state laws calling for a reduction in greenhouse gas emissions and more renewable power, with its obligations to keep electricity reliable and affordable.

"There's many other states where commissions are a lot more aggressive about incorporating those kinds of renewable and low carbon policy goals into their decision making, and I think our commission needs to do that as well, and not just have that be an afterthought," she said.

When she was appointed to the PUC in 2011, those factors weren't given much weight, Anderson said.

"I was really shocked when I walked in the door and asked, 'Well, what about those greenhouse gas goals? Why aren't those being discussed?' And the response I got was, 'Oh, that's never come up before.'"

Heydinger, who succeeded Anderson on the PUC in 2012, when Anderson failed to win confirmation from the state Senate, said the commission must balance many factors in its decision making.

Line three proponents and opponents' buses sit across the street.
Buses for proponents and opponents of the Line 3 oil pipeline replacement projectsit across the street from each other on Robert Street in downtown St. Paul outside the Public Utilities Commission's headquarters in June 2018.
Lacey Young | MPR News file

"I'm sure that the commission gets faulted from time to time for not being more aggressively anti-fossil fuels," she said. "That never bothered me too much. I think that's a very important consideration, but it's not the only one that by statute the commission is directed to consider."

While it's up to Gov. Tim Walz to appoint the next PUC commissioner, the panel is non-political by design.

No more than three of its five members can be from the same political party. They can't talk to lobbyists outside of open meetings. They can't even talk to each other about cases outside of hearings.

Both Heydinger and Anderson said after they were appointed by then-Gov. Mark Dayton, they never heard from him again.

"It's meant to be independent in the sense that judges are independent, and not subject to direction by the governor," explained Anderson. "They're not like members of the cabinet."

When the new commissioner joins the PUC, one of their first tasks will be to scrutinize a new resource plan from Xcel Energy, which has pledged to deliver zero-carbon electricity by 2050.

Walz doesn't have a target date to appoint Lange's replacement, said his spokesperson Kayla Castaneda.

While Walz is "excited by the growth in clean energy," he expects the next PUC commissioner to make decisions "based on the facts of the case and the statutes governing the commission," Castaneda added.

PUC applicants

More than 30 people have applied to fill the seat on the Minnesota Public Utilities Commission that opened up when chair Nancy Lange's term ended in the new year. PUC members are appointed by the governor, and confirmed by the state senate.

We asked some of the applicants about why they would like to be part of the board. Here's what they said.

Benjamin Stafford: director of policy & public affairs at Clean Energy Economy Minnesota

"I'm motivated by the opportunity that this clean energy transition our state is going through may provide, and that has a lot of benefits in terms of economic impact, environmental impact, social impact, etc. I think it's an exciting time to be at the utilities commission."

Winona LaDuke: executive director, Honor the Earth; prominent Line 3 opponent

"I am deeply interested in the issues of infrastructure in the U.S. I am also interested in ensuring that infrastructure is safe during times of climate change, and that improvements to infrastructure are equitable, essential and completed in a timely manner"

Leili Fatehi: attorney who represented the Sierra Club in Line 3 proceedings

"I think that the commission right now is entering what is probably one of the most challenging but important periods in its history, where it's going to have some of its biggest opportunities ever to influence and to improve the efficiency and the reliability of our utility system. And to advance things like reducing pollution and climate change."

Christopher Villarreal, energy consultant and former director of policy at the Minnesota PUC

"Clean energy is not a partisan topic. This transition is underway here in Minnesota, but there is still work to do to realize this reality. I want to continue the leadership exhibited by the PUC and plan for and build an electricity network that meets customer demands and expectations, increasingly utilizing cleaner and distributed resources, while maintaining affordability, accessibility, and reliability."

Stephanie Zawistowski: former senior policy advisor for Gov. Mark Dayton

"The Public Utilities Commission plays an integral role in the decisions that regulate our State's energy marketplace, and in charting the course for Minnesota's energy future. I have devoted the majority of my career to working on complex energy and environmental issues, and have developed extensive experience in carefully bringing together coalitions to make progress on these issues."

Carly Melin: former state legislator from Hibbing; current executive director of the Minnesota State Building and Construction Trades Council

"Minnesota is at a crossroads. We have a chance to help lead a national and global transition to a clean energy economy. The Commission will play a critical role in this process: helping to facilitate the transition, while ensuring that Minnesota ratepayers, workers, and communities share in the benefits. Protecting the public interest is my top priority as a public servant and would be my top priority as a Commissioner."

Bill Grant: deputy commissioner, Minnesota Department of Commerce

"Leading the Energy Division at Commerce has provided me with deep subject matter expertise, recognized successes, and experience honed by having to make challenging and, at times contentious, public policy decisions. The next six years will offer both challenge and opportunity to the Public Utilities Commission. The Commission will be asked to make highly consequential decisions affecting all Minnesotans. I believe that I bring a strong mix of experience, subject matter expertise, and optimism about what can be accomplished through fair and impartial consideration of all points of view."

David Fisher: retired University of Minnesota law professor

"The important issues [the PUC considers] require a deliberate, fact-based, nonpartisan review and analysis. I emphasize the fact-based analysis — these should not be political decisions, but rather decision-making that weighs carefully and minimizes the trade-offs among development, consumer protection, environmental protection, and the interests of individuals directly and adversely affected by development. I would also like the PUC to focus more attention on telecommunications, and in particular the continued deployment of broadband infrastructure throughout the State."

Glen M. Jacobsen: assistant Renville County Attorney

"I believe that climate change is one of, if not the most, existential threats to life on this Earth as we know it. Storms, droughts, and floods enhanced by climate change all have enormous impact not only on those directly affected, but also cause ripples of expense and loss for many years. I am not against jobs, or progress, or vehicles or oil or natural gas. But we need to do more, faster, now, to ensure a livable world for our descendants."

Jenny Scharmer: board director of Dairyland Power Cooperative

"The high-profile decisions that will be addressed by the PUC are part of the reason that I applied. These important issues can be seen as challenges or opportunities, I believe these are opportunities that can help keep Minnesota the great state that it is. My background in business with a solid understanding of utility rate-making and my belief in serving are the other reasons that I applied. The decisions made, after carefully analyzing the information, should bring a balance for Minnesotans for both now and our future generations."

Patrick Baustian: mayor of Luverne, Minn.

"There will be many important decisions that need to be made by the MN PUC in the near future concerning pipelines, electric vehicles, natural gas plants, and renewable energy sources of which I would be able help utilize my past 16 years as an elected municipal official and 17 years as a Cyber-Operations professional in the Air National Guard to make important decisions for the MN PUC."

Thomas Watson: retired finance professor, former mayor North Oaks; Line 3 critic

"I wanted to make sure there was representation, from central and northern Minnesota. I don't think the PUC ought to be a dumping ground for former legislators. I think we ought to be looking at people who have the academic and experiential background to address the issues that are required to be addressed, whether it's a certificate of need, a rate decision or a route permit."

Leonard Axelrod: attorney, mediator, business law professor at Metro State University

"The PUC impacts every aspect of the lives of Minnesota citizens in its oversight of fundamental utilities, particularly electric, gas and communications. I am applying as a moderate who believes in conservation, environmental protections and need. I have worked in public, profit and non profit sectors. I would be able to perform in the quasi-judicial roles of the Commission. My approach to problem solving is not polarized but based on reasonable facts."

Janet Kitui, buyer for Minnesota Department of Employment and Economic Development

"Minnesota is the midst of a massive energy transformation. In the next 20 years over half of our electricity will be ready for replacement. Because renewable is now the least expensive form of new energy this is an opportunity to create thousands of jobs while saving money and delivering the healthy energy that customers want."

Anna Richey, regional manager for Conservation Minnesota

"I am applying for the PUC because energy and utility service is changing rapidly and for the past four years I have been observing the impacts of that change in Greater Minnesota, particularly here in the southern part of the state. I think there is the potential for the future of energy generation to be a huge economic opportunity for our rural communities, but everyone needs to know what the play book is for balancing private and public sector interests."

Other applicants include state Sen. David Tomassoni, DFL-Chisholm; state Rep. Raymond Dehn, DFL-Minneapolis; Brendon Slotterback, a program officer on climate and energy at the McKnight Foundation; Keith Mykleseth, general manager of East Grand Forks Water and Light; and Travis Thul, dean of technology and trade at Minnesota State College Southeast.

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