Adam Dilts

February 26, 2007

On February 22, Minnesota Governor Tim Pawlenty (R) signed into law what is being hailed as one of the nation's most aggressive renewable energy standards. The newly amended provision of the Minnesota Public Utilities Law overhauls the state's existing Renewable Energy Objectives to require that utilities providing electricity (wholesale or retail) within the state comply with an "eligible energy technology standard (EETS)." Once fully implemented in 2025, Minnesota utilities will be required to "generate or procure" at least 25% of the state's electric demand through solar, wind, small-capacity hydroelectric (less than 100 MW), hydrogen,* or biomass.

The standard employs an incremental benchmark approach to steadily expand the reliance upon renewable energy. Beginning in 2012, 12% of the state's electricity must be provided through EETSs. By 2020, the law requires one-fifth renewable derived electricity, and by 2025, at least 25% EETSs sourcing. Furthermore, electric utilities operating nuclear generation facilities are required to comply with a heightened standard such that by 2025, at least 25% of their electricity to be generated through wind power plus an additional 5% through any EETS.

While other states currently have similar renewable energy requirements, Minnesota's law is considered to set one of the most ambitious expansion goals. Approximately three percent of Minnesota's current electricity needs are met by sources that qualify as EETSs. The rapid expansion of renewables is expected to be achieved primarily through wind power. According to XCEL Energy Inc., the state's largest utility and sole operator of nuclear generation facilities within the state, the company plans to install 2,000 addition wind turbines bringing their total wind generation capacity within the state to over 4,000 MW by 2020.

The new standard will be regulated by the Minnesota Public Utility Commission, which is afforded the authority to delay or modify implementation of the standard when such action accords with the public interest. The standard passed with broad, bi-partisan support and expected to bring economic growth to state while imposing minimal increases to the rate base.

Sources:

Dennis Lien, State Takes 'Landmark' Step Toward Green Power, St. Paul Pioneer Press, Feb. 23, 2007, at A1, available at http://www.twincities.com/mld/twincities/news/local/16762489.htm?source=rss&channel=twincities_local.

Minn. Stat. § 216B.1691(1)(a), (2)(a), (2)(b) (2006).

Associated Press, Law prepares state to lead nation on renewable energy (Feb. 22, 2007), http://www.kstp.com/article/stories/S32206.shtml?cat=1.

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* To qualify as an EETS after 2010, hydrogen energy producers must utilize either solar, wind, small capacity hydroelectric, or biomass energies.