Volume 08-9 ~ May 9, 2008
Cap and Trade Study Conference
This year’s omnibus energy bill, SF 3337, was approved by ten conference committee members and then went on to pass both Floors this week, and will be on its way to the Governor. The conference committee report did not include a renewable energy mandated carve out for solar energy, but it did include a revised eminent domain procedure requiring utilities to share an appraisal with a landowner. A partial list of subjects in the bill was given in last week’s report. We will present a detailed review in our session summary.
Cap and Trade Study Conference
Well, we seem to be getting what we asked for, only a year too late. The Legislature last year passed greenhouse gas reduction goals; now we will attempt to determine what the impacts of that law and a cap and trade program might be. Substantive differences are minor between SF 2818 and HF 3195, so the conference committee for the significantly amended cap and trade study legislation proceeded smoothly during two hearings. The so-called Green Solutions Act heading for floor approval includes four key sections:
The
Department of Commerce and the Pollution Control Agency reports to the
Legislature on the progress of the Midwestern Governors Greenhouse Gas
Reduction Accord. The legislature’s involvement in that process includes
the formation of a 6-member advisory group to the Accord’s stakeholder
group. A key ingredient is the statement that the Accord, or any cap and
trade program, cannot become effective until approved by the Legislature,
that is, a Governor’s executive order or a state agency regulation is not
sufficient.
Two
required studies: First, an analysis of the economic, environmental, and
public health costs and benefits of a cap and trade program, and how it
might impact energy costs, businesses and consumers, job growth, investment,
and others, along with ways to provide for “equity to communities at risk”.
Second, a study of potential revenues to the State from a cap and trade
program and how those revenues might best be spent – a study of state
revenue (tax) and expenditures. The expenditure part of the study will
focus on reducing emissions cost effectively, promoting economic development
and job growth, assisting low-income consumers, and protecting public health
and the environment.
Next is a
study by the U. of M. to examine “governance options for determining
expenditures of potential revenue”. In other words, what should be the role
of various entities, especially the Legislature, in making decisions on the
allocation or spending of funds from a cap and trade program.
These studies will cost up to $500,000, paid from an Xcel Energy renewable energy research grant fund.
The conference committee report for SF 3096 sets up energy improvement projects and energy efficiency and conservation financing programs for state and local units of government. Projects can include renewable energy, including geothermal energy. If a co-op or other utility is involved in a project, then it may count toward the co-op’s CIPs savings goal. Local governments can also participate in a micro energy low-interest loan program, aimed at small-scale renewable energy resources, again including geothermal. Funding is from the petroleum violation escrow fund and state bonding.
The above projects and programs are one step toward a green economy and the coordination of economic development and environmental policy. The second part of SF 3096 defines “green economy” to mean products, processes, technologies, or services that increase renewable energy, increase energy efficiency and conservation (CIPs), reduce greenhouse gas emissions, restore and preserve water quality, and expand the use of biofuels. To help coordinate economic development and environmental policy, the Department of Employment and Economic Development (DEED) and the Jobs Skills Partnership Board must cooperate to promote job training that complements green economy business development. And DEED grants and other assistance must include projects that promote the green economy.
A 20-member Green Economy Transformation Task Force is created to help transform the State’s economy and to develop a statewide action plan. The action plan is “for transforming the economic system of the state to respond to and benefit from the environmental and energy policies of the state”, which are, again, renewable energy, CIPs, greenhouse gas emissions reduction, clean water, and biofuels. The task force will issue a report to the Legislature by January 15, 2009. As mentioned in an earlier report, the funding for this is from a previous assessment on Xcel and from last year’s assessment on all utilities, for a total of $400,000 over the next two years.
A conference committee approved SF 2909 and also easily passed both houses. SF 2909 revises the current law on the right of tenants to pay utility bills when the landlord does not pay and the residence is on notice to be disconnected (see section 504B.215). The final bill was pared down considerably from the original bill since advocates for the revisions were in constant contact with all utilities to ensure that all changes were reasonable and workable.
As reported out of the conference committee, the bill clarifies what should be included in a notice if a utility posts a notice in a building (but only “if” the utility posts), allows the utility to collect only “current charges” (not arrears or penalties) from the tenants, sets out procedures for the tenant and utility to follow when the tenant pays the bill and service continues (in buildings of less than five units), and establishes procedures for a landlord to reestablish service, including payment or arrangement to pay the total bill, including arrears and other charges.
Throughout the session, discussions ensued about restricting the application of pesticides in certain situations which, although not necessarily intended to do so, might have impacted utility operations. We kept in contact with those who are right on top of this issue. Then out of nowhere, as we know sometimes happens at the legislature, pesticide application language was amended into the omnibus agriculture and veterans’ affairs bill, SF 3683, during debate on the House Floor. Rep. Ken Tschumper (DFL-LaCresent) offered the amendments stating that “a pesticide application resulting in pesticide drift beyond the boundaries of the target site, whether intentional or not, is illegal”, and that it is illegal to apply a pesticide to a public right of way or a nearby property that might drift onto a public ROW, whether intentional or not. Similar language was not acted on in the Senate, so the amendments were dropped in conference committee. Thanks for this can go to ag chairs Senator Jim Vickerman and Rep. Al Juhnke, and also to our friends at MAC, MFU, and MFB.
The House publication “Session Weekly” for the week of May 2 contained a feature article entitled “the Nuclear Option”. The byline states “once the bane of environmentalists, nuclear power is being given a second look.” The article reviews the bills, amendments, and hearings that took place during the legislative session. It quotes the Republican leader on the issue, Rep. Joyce Peppin, saying “If you believe that greenhouse gasses are causing global climate change, nuclear is a great option.” And House Energy Committee chair Bill Hilty stating that everything needs to be analyzed “to ensure that we understand what all of the costs are, including all the externalities.”
Even three years ago, I cannot imagine that anyone at the Legislature would be saying that the State should look at nuclear power as an energy resource option again. Maybe we can in part thank or damn, depending on your viewpoint, Homer Simpson. The author of the article begins his review with a vivid picture: When Minnesotans think of nuclear power, any number of things might come to mind. They might think of a nuclear-powered aircraft carrier patrolling the Persian Gulf, or the incident at Three Mile Island and Chernobyl. Others might conjure images of doughnut crumbs spilling from Homer Simpson’s mouth onto the reactor control panel at the Springfield Nuclear Power Plant. You can download the entire article by going to www.house.mn. Scroll down to Information, and click on Session Weekly.
A well known political observer recently stated that extreme liberals and extreme conservatives are happier than most other folks because they are so certain that they are right (or correct). Other observers think differently, stating that right and left extremists seem less happy and more frequently frustrated because so many of “the others” are wrong and will not listen to them.