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Aggregating Energy Since 2006

Climate Change Testimony

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I listened to the Feb 22 Minnesota Senate Energy Committee meeting (audio available here, scroll down for the day) and had some thoughts about the testimony on the climate change legislation before the committee.

Otter Tail Power (OTP) started by bragging about decreasing its carbon intensity since 1990 and said it has plans to continue decreasing it. This is the same language that the Bush Administration uses when trying to obfuscate its energy policy with a policy that actually does something. Business as usual means Otter Tail Power will decrease its carbon intensity. It is called being more efficient. If Otter Tail Power decided to stop being more efficient, that would be dumb for its investors because they would be wasting money.

Thus, OTP essentially begins its presentation by bragging about something it must do. This is not action. Though future reductions of carbon intensity for OTP seems like a course of action, it is not. It is business as usual. Well, business as usual and a strong RES (renewable electricity standard). Business as usual will not mitigate greenhouse gases (GHGs) and commits everyone to a rapidly changing climate.

The testifier next discussed what Minnesota should do. OTP wants a stakeholder process to recommend policies on GHGs and to inventory MN GHG emissions. Other actions supported by OTP are to make plans to eventually do something. Notice that they do not want to do anything, they want to contemplate doing something.

They continue to characterize a Minnesota cap-and-trade program as being "unilateral" despite the fact that many other states have done so and offer a market for us to tap into. Though this market will work better with all states involved, we have to start somewhere.

I think he seriously stretched the truth about the growing electricity load in Minnesota. To hear him tell it, electricity demand must rise. Keep in mind that California has nearly flat-lined its per capita load growth over the last 30 years. Given proper incentives and investment, Minnesota could also keep load growth quite low despite a growing population.

A major question for future electricity demand rests with plug-in hybrid vehicles. The mass adoption of those vehicles over the next 10 years will certainly add substantially to electricity demand. As someone who is pushing for no new coal plants right now, I don't actually have a good solution for how to deal with rising demand for power aside from policies to encourage efficiency. This seems to fall apart when plug-in cars are introduced due to the large amounts of electricity they will require.

OTP apparently does not appreciate the potential for such policies - the testifier believes that all appliances purchased from Target and plugged into the wall will increase electrical demand. However, many of those appliances will be replacing existing appliances. In a perfect world, each new appliance would be more efficient than the one it replaces.

The final point of OTP's representative was that pushing a cap-and-trade program or other programs that require offsets will cause OTP to rely on older, less efficient coal generation than if Big Stone II is built. Big Stone II will be very efficient and comparatively clean (thanks to strong environmental laws that utilities like OTP tend to challenge legally at every opportunity). The testifier suggested that if BSII is built, they will retire their 50+ year old generators in Fergus Falls. This strikes me as being a bit of wishful thinking and bluster built into one.

Regardless, it strikes me that a policy that punishes new coal generation (via offsets as in both Anderson and Pawlenty's plans) while not at least dealing with the grandfather issue is lacking. Ultimately, it seems to me that we want to cap emissions - not coal. Ideally, we would want Big Stone II built and older plants decommissioned in such a manner as to keep emissions flat-lined or begin decreases.

I find it ironic that these utilities and other interests opposed to GHG regulation are pushing for more studies like the wind integration study. Many of them actually cite that study as being a good example. This comes mere weeks after they attacked the study in committee testimony as being wrong, based on erroneous assumptions, and generally unhelpful when it comes to putting more wind on the grid. Now they want to do the same thing with GHG emissions?

Before ending this rant, I do want to note that utilities such as OTP resist this legislation for a reason - they are committed to providing cheap, reliable electricity. If rates suddenly rise or electricity becomes less reliable due to legislation (however necessary it may be), most people will get angry with them, not with the legislature. Nonetheless, I do believe that utilities like OTP must be compelled to invest carefully for the future given what we know and what technologies are available.