Walz, DFL lawmakers look to speed up shift to carbon-free electricity
Minnesota's electric utilities have been moving away from burning fossil fuels toward more renewable energy sources at a rapid pace.
They’ve shuttered coal-fired power plants that emit greenhouse gases and commissioned new solar and wind farms. Last year, renewable resources, including wind, solar, biomass and hydropower, generated the largest share of Minnesota's electricity, nearly 30 percent.
But clean energy advocates and Gov. Tim Walz’s administration say the transition isn't happening quickly enough to address the looming crisis of climate change. Minnesota is not currently on track to meet its goals to cut greenhouse gas emissions.
They want state lawmakers to require that 100 percent of Minnesota's electricity comes from carbon-free sources by 2040.
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"What science tells us and where the world is moving is to a carbon-free economy by mid-century,” said Allen Gleckner, executive lead for policy and programs at the nonprofit advocacy group Fresh Energy. "What we know is that the electric system has to go further and faster in order to make that happen, as we electrify other parts of our economy."
With DFLers now in charge of both the House and the Senate, the proposal’s chances of approval have improved. But some of the state’s top utilities say meeting that new deadline could be a challenge.
Nick Frentz, a DFLer from North Mankato, will chair the Senate Energy, Utilities, Environment and Climate committee next year. He said passing carbon-free electricity by 2040 will be a top priority for his committee.
"I think moving it up sends a message that we recognize that the news on climate change is more urgent than we may have thought 10 or 20 years ago,” Frentz said. "I think it also recognizes that in the field of clean energy, we want to signal the strongest possible incentives to innovate."
The bill debated last year created benchmarks for carbon-free electricity that all Minnesota electric utilities must meet. It included “off ramps” for utilities if they demonstrate to state regulators that meeting the benchmarks would have significant impacts on energy costs or reliability.
State Rep. Jamie Long, DFL-Minneapolis, has pushed the 2040 measure in the House the last two years, but it failed to pass the then-Republican-controlled Senate. He will be the new House majority leader.
“We've heard loud and clear from Minnesotans that it's a top priority for them,” Long said. “I think that people understand that climate change is here. It's having real impacts on our lives. And they want us to step up and act.”
The electricity sector has been a bright spot in terms of cutting carbon emissions, Long said, while other contributors — such as transportation and agriculture — have moved more slowly.
"When we have a state like Minnesota, where we want to be leading on clean energy and we have the ability to move faster, we absolutely need to,” he said.
The state's two largest electric utilities, Xcel Energy and Minnesota Power, already have pledged a goal of carbon-free electricity by 2050.
The two aren't publicly opposing moving up the deadline. But they are urging lawmakers to thoughtfully consider whether it's possible to achieve while keeping electricity affordable and reliable.
In a statement, Xcel spokesperson Kevin Coss said Xcel is committing to achieving a zero-carbon future as quickly as possible — potentially as early as 2040 — “but only if we can do so affordably and reliably.”
“We chose 2050 as our target date to ensure that the technology needed to get us to 100 percent carbon-free electricity has time to mature and become commercial and affordable for our customers,” he stated.
Duluth-based Minnesota Power is already producing half of its energy from renewable sources, and plans to retire its last remaining coal plant in Cohasset by 2035.
'We're excited about the momentum,” said Julie Pierce, Minnesota Power’s vice president of strategy and planning. “We're concerned about how fast can we accelerate that?”
Pierce said the utility’s plan recognizes that the switch to clean energy requires building new infrastructure, such as transmission lines, which takes a lot of time. Supply chain and labor shortage issues could pose additional challenges, she said.
“We feel confident in 2050 right now, but we're willing to think and work on how we can make that accelerate,” Pierce said.
Cost is also likely to be a key part of the discussion over whether to move up the deadline.
Isaac Orr, a policy fellow at the conservative Center of the American Experiment, said his organization’s research found that mandating carbon-free electricity by 2040 would cost billions of dollars more than operating the existing grid, and could lead to more reliability concerns and blackouts.
"A lot of that’s due to the fact that you really have to build a lot of extra wind and solar and battery storage in order to make sure that the supply of electricity is always able to meet demand,” Orr said.
But clean energy advocates and DFL lawmakers dispute that renewable energy will cost more. They say solar and wind are actually cheaper forms of energy right now than fossil fuels.
"At this point, I think coal generation is, frankly, the most expensive and the dirtiest,” said State Rep. Patty Acomb, a DFLer from Minnetonka who’s the incoming chair of the House climate and energy committee.
Fresh Energy’s Allen Gleckner said achieving 100 percent carbon-free electricity while maintaining reliability and affordability is “absolutely doable.” It likely will take a mix of different strategies, including energy storage, that will look different in Minnesota than in other parts of the U.S., he said.
Studies have shown that over the long run, moving to newer, cleaner technologies will be cheaper in the long run, Gleckner said.
“But we need to make sure that’s reflected on customers’ bills and what folks are paying, and that it stays affordable,” he said.
The state could use funding from the recent federal Inflation Reduction Act and the Infrastructure Investment and Jobs Act to help pay for some of the infrastructure needed for the clean energy transition, Frentz said.
He said there's not enough consideration paid to how much climate change is already costing the public, including damage from floods, drought, storms and wildfires.
"The cost of climate change is being paid by Americans all across the country,” he said. “We need to factor that into our decisions about how urgent it is that we make this transition."