Volume 08-8 ~ May 5, 2008
Co-ops
Eligible for Disaster Aid
Solar Carve Out Seems Carved Out
Cap and Trade to Conference
Nuclear Power Gets Recognized
House Omnibus Tax Bill and
County C-BED
Senate Confirms SBE Appointments
Disconnect Notice to Cities
Co-ops Eligible for Disaster Aid
Governor Pawlenty approved a bill that establishes procedures for state agencies to assist communities to recover from a natural disaster that are included in a presidential declaration of a major disaster. The bill (HF 2904), and now the law (Chapter 247 of the 2008 Session Laws), is a direct result of the flooding in and around the City of Rushford, including Tri-County Electric Co-op. Through the outstanding, but quiet, work of Winona Representative Gene Pelowski, along with Senator Ann Rest from New Hope, electric co-ops can apply for state recovery assistance. The way it will work is that the Department of Employment and Economic Development receives state funding for grants to local units of government, who in turn locally administer a grant or loan program for eligible organizations, including co-ops, directly affected by the disaster. To paraphrase Tri-County Electric manager Brian Krambeer, this is positive legislation that you really want to go out of your way to thank the key legislator, Rep. Pelowski.
Solar Carve Out Seems Carved Out
The omnibus energy bill conference committee (SF 3337) took action on most items this week, but as of Thursday night there was no debate or vote on the section mandating utilities to devote a small percentage of their 25% renewable energy standard (RES) to mostly small solar facilities. One could speculate that the solar carve out appears to be dead, thanks mainly to the strong Senate position against the provision, led by Senator Yvonne Prettner-Solon. MREA, GRE, and all other utilities worked against this part of the bill. We will feel more comfortable after the final conference committee meeting Monday morning.
Another part of the omnibus energy bill we worked hard against concerned the appraisal and negotiations of eminent domain. The initial bill took a shotgun approach to a very specific incident, which could have or should have been handled locally and informally. The chief author of the original bill and utilities worked out compromise language during Thursday’s lengthy hearing. As amended, if an appraisal is conducted before a quick-take eminent domain petition is presented to a property owner, then the utility must provide a copy of the appraisal to the landowner. Most all utilities do this anyway, but obviously not by all. Curiously, service territory law entered into draft language, but it just as curiously found its way out of the bill.
In addition to the eminent domain item, the entire bill contains over 30 provisions. We listed some of the key items in our April 22 report, but here is a quick rundown:
· Allows IOUs to more quickly recover costs associated with transmission projects and charges. This should indirectly help co-op transmission plans.
· Exempts certain wind and solar facilities from needing a PUC certificate of need, but requires a much abbreviated review and comment process.
· Revises the utility notification process for HVTL siting to give local governments along a proposed site an additional 90 days (started out at 180 days) notice. Local hearing procedures are also outlined.
· Allows the PUC to approve utility spending for renewable energy storage facilities.
· Permits utilities to include solar projects up to 5% of allowable CIP spending and DG projects. It also establishes a solar rating and certification lab.
· Requires the Rural Wind Energy Board to aggregate the purchase of wind turbines and other equipment for sale to small wind developers and local units of government that cannot purchase small quantities on the market.
· Requires the PCA and the DOC to report biennially to the Legislature on progress toward achieving the greenhouse gas reduction goals, and also report annually on proposed legislation needed to achieve the reduction goals.
· Revises the LEETF/Legislative Energy Commission to enlarge its focus on all forms of energy, not only electric – and share the assessments also. Both the stand-alone bills on this subject (HF 3729 and SF 3605) are in the Senate Finance Committee.
After passing the House the week before, the Senate next inserted its cap and trade bill language of SF 2818 into the House bill, HF 3195. Without much debate, the final vote was 43:21. Three DFLers voted against the “non-controversial” bill, Senators Rod Skoe (Clearbrook), Dan Skogen (Hewitt), and David Tomassoni (Chisholm).
With the “principles” and other discriminatory language removed, MREA and other utilities did not lobby for one bill or the other. Both HF 3195 and SF 2818 passed in forms we can accept, but we still like the Senate bill better. Although there are limited differences between them, neither the House nor Senate accepted the other’s cap and trade legislation. The omens are reasonably good that the conference committee will not go far astray from the bills as they passed, which focus on legislative involvement in a cap and trade program, reports to the Legislature, an economic impact study, and a revenue and spending study.
Nuclear power keeps popping up. On the Senate Floor, Senator Amy Koch offered an amendment deleting the prohibition that the PUC never issue a certificate of need for a nuclear power plant. The amendment was ruled not germane to the bill. But in the House, on the bill concerning the new Legislative Energy Commission to replace the LEETF (HF 3729), before passing the House Floor, an amendment was accepted stating that the LEC’s reviews and evaluations of energy resources shall include “new and existing technologies for nuclear power”. I believe this is the first legislatively approved recognition that nuclear power might be a resource option. As an aside, the Nuclear Energy Institute advertises that carbon emissions prevented by nuclear power plants are equivalent to eliminating the emissions from 96% of all U.S. automobiles.
House Omnibus Tax Bill and County C-BED
It seems really late to be moving an omnibus tax bill, but the House Floor now has HF 3149 before it. As noted last time, the bill includes the GRE personal property tax exemption for the proposed Elk River peaking power plant, a class rate increase for generation property from 2.0% to 2.8% by 2010, but, unlike the Senate bill, no class rate increase for transmission and distribution property and no inclusion of generating plants in the statewide levy.
A very unusual item that we have been closely tracking elsewhere was added to the House tax bill: Allow counties to plan, develop, purchase, construct, or own a C-BED project and to sell the output wholesale. The added provision also includes county financing authority. The modified language from HF 3585 inserted into the tax bill makes it clear that a county may purchase and sell power from the wind facilities only at wholesale and cannot be sold, transmitted, or distributed at retail or for offsite end use. The service territory law is explicitly protected. Interestingly, HF 3585 without the financing powers and in a somewhat different form passed the House Floor the next day. It does seem clear that a bit of game playing is going on with Hennepin County wanting to get hold of some wind energy or projects.
Senate Confirms SBE Appointments
The Senate Floor confirmed the eleven new appointments to the State Board of Electricity, including two electric co-op appointments. They are Goodhue County Co-op general manager Doug Fingerson and Steele-Waseca Co-op operations manager Kim Huxford. Doug’s term runs through December 31, 2011, and Kim’s through December 31, 2010. Our congratulations to both Doug and Kim!
The Governor has approved SF 2775, allowing cities to request from utilities, including electric co-ops, notification of disconnections during the cold weather period, October 15 – April 15, in an effort by cities that request the data to prevent property damage from frozen water pipes in homes foreclosed and vacated.
We like to end with some words of wisdom. One senator many years ago knew where to find some, but made it clear that “These are not my figures I’m quoting. They’re the figures of someone who knows what they’re talking about.”