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RES Analysis

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The potential new RES is now available online. Many are calling it the most aggressive Renewable Energy Standard in the country, but such absolute comparisons are difficult (and ours is not law yet, it has to go through the House and conference committee). California has an RES of 20% by 2010 and a goal of 33% by 2020.

Regardless, this is certainly a massive step foward thanks to the hard work of many people. Senator Anderson has pushed for an RES for many years and deserves much of the credit. Governor Pawlenty's new energy package certainly also had a hand in making it so strong.

Let's dive right into it.

The renewable energy standard says that utilities must create a certain percentage of the electricity they sell from eligible (renewable) technologies by a certain year. Xcel has once again been singled out for more aggressive responsibilities but in a different way than as under our current Renewable Energy Objective. The objective has been increased to 7% by 2010 rather than an objective of 5% by 2010 as under current law.

After 2010, there are several standards (this is all utilities aside from Xcel). 12% by 2012. 17% by 2016. 20% by 2020. 25% by 2025.

Now we get to Xcel. Xcel continues to have a standard rather than an objective. However, its many wind project requirements under the Prairie Island deals (made in exchange for increasing temporary nuclear storage at the site) will now count toward its requirement. Currently, those projects do not count toward Xcel's standard. Counting them is now justified due to Xcel's greatly increased obligations.

For Xcel: 15% by 2010, 18% by 2012, 25% by 2016, and 30% by 2020! Given that Xcel sells some 50% of all power sold in Minnesota, this standard is a tremendous achievement.

Xcel is mandated to use wind for 25% of its generation in 2020. This sort of technological lock-in can be dangerous to write into statute though as the ultimate goal is not to produce wind so much as it is to reduce greenhouse gas emissions. Currently, wind is the most economical way to do that and this requirement will make sense so long as that remains true. If other eligible technologies have a massive technological or economical leap, this language will have to be modified or Xcel will waste its ratepayer's money.

As everyone expected, eligible hydro has a new ceiling of 100MW. Larger hydroelectric facilities will not count toward the renewable requirement. They have dropped the language that would have made old hydro ineligible. Greenpricing has also been axed so I guess I'll have a couple extra dollars a month.

The offramp language is more robust but also gives the PUC less decision-making power. Previously, the language said the PUC "may" modify or delay the standard if certain conditions are met but it now reads that the PUC "shall" modify or delay the standard.

Nonetheless, the PUC has been given a strong set of criteria by which to judge if a utlity merits a delay or modification (look halfway down the post). The Committee finishes the compliance section with a warning to the PUC and a requirement that a utility must file a plan to meet the standard if it requests a delay.

When considering whether to delay or modify implementation of a standard obligation, the commission must give due consideration to a preference for electric generation through use of eligible energy technology and to the achievement of the standards set by this section.

The bill requires the PUC to develop the credit trading program (well on the way - MRETS) and credits cannot be treated differently based upon the state in which they were generated. All utilities must work with this system.

Of course, we still want to encourage energy development in Minnesota:

The commission shall take all reasonable actions within its statutory authority to ensure this section is implemented to maximize benefits to Minnesota citizens, balancing factors such as local ownership of or participation in energy production, development and ownership of eligible energy technology facilities by independent power producers, Minnesota utility ownership of eligible energy technology facilities, the costs of energy generation to satisfy the renewable standard, and the reliability of electric service to Minnesotans.

On to the House!

MPR coverage. Pioneer Press coverage. My RES chain of posts begin here.