On Thursday, February 2, 2017, MCEA Clean Energy Program Director Leigh Currie testified in front of the Minnesota Senate Energy Committee. Below is a transcript of the testimony she gave, which outlines our concerns about the hasty replacement of Xcel's coal plants, Sherco 1 & 2, with natural gas.
WRITTEN BY: Leigh Currie, MCEA Clean Energy Program Director
"Mr. Chairman, members of the committee, my name is Leigh Currie, I am a staff attorney at the Minnesota Center for Environmental Advocacy and I primarily practice at the Public Utilities Commission [PUC]. I represent several Clean Energy Organizations at the PUC including Fresh Energy, Sierra Club, Wind on the Wires, and MCEA. With me today is Allen Gleckner from Fresh Energy, also available to answer questions from the committee. MCEA and the clean energy groups I represent oppose the Senate File 85. We have two primary concerns with this bill. The first is the precedent that it sets, and the second is that it prioritizes shareholders over the public interest of the State of Minnesota.
This bill is bad precedent. Xcel Energy is a monopoly. We have a system in place to ensure that the public interest is protected from monopolies. The system includes checks and balances. The PUC can only act within the authority delegated to it by the Legislature. Within its authority, the PUC can exercise its judgment based on the record built before it. If there were an argument that the PUC acted outside of its authority or abused its discretion, there is a mechanism to challenge that within the judicial branch. But that is not the argument being made today. Nobody is making that argument. Instead, Xcel is asking you to do the PUC’s job for it.
Just three months ago, I sat in front of the Commission with Xcel Energy arguing about its resource plan and I listened to Xcel Energy ask the PUC to please allow it to move forward with a certificate-of-need process. Exercising its discretion, the PUC did what it always does when it determines there is a need for a new resource—whether it’s wind, solar, natural gas, an unspecified fuel type—it authorizes the utility to either go forward and issue an RFP or apply for a certificate of need. In this case, the PUC did what Xcel asked it to do and authorized Xcel to go forward with the certificate of need. The PUC and Xcel both understood that a certificate-of-need proceeding is required by state law and that there was sufficient time to determine the exact parameters of the plant. The PUC in this process considered two years’ worth of record development and arguments from the parties and determined that there were gaps in information, there was out-of-date information including the demand forecast, and there was inaccurate information in the record. And it determined that there was time to finalize the exact parameters—the precise nature—of this gas plant through the state-required certificate-of-need process. What the PUC did in this proceeding is exactly what the law states it must do and what Xcel asked it to do.
Allowing Xcel to opt out of this system of checks and balances because it might not get exact parameters of the plant that it asked for once the right information is in front of the PUC, is sending the wrong message. This bill, unlike the [Metropolitan Emissions Reduction Project] MERP statute, does not create a statutory framework in order to achieve a policy goal. The MERP statute was a framework in order to achieve emission reductions. Those projects had to be vetted and approved by the PUC. That’s not what’s happening here. There is no identified goal here. This is simply a bypass lane around the PUC for a one-time, $1 billion project. It’s nothing more.
The second concern is that the project itself—the $1 billion, one-time investment—prioritizes shareholders over ratepayers. The way this bill is written—even as amended—to approve the billion-dollar project puts shareholder interests ahead of the public. If this bill were actually about jobs or regulatory certainty then you would see language in the bill about jobs. But it’s not about jobs. It’s about a $1 billion, one-time project. There would be no need to bypass the PUC or a certificate of need in order to have a gas plant on site at Becker and have the certainty and the jobs that the community deserves and is looking for.
If this bill does pass, you’ve locked in a $1 billion investment that is not needed for 10 years. In the IRP process it was clear that Xcel’s system is currently over capacity. The first coal unit at Sherco shutting down in 2023 does not trigger the need to build anything. It’s the second unit shutting down in 2026 that triggers a need for something to be built. The reason the bill in front of you doesn’t simply guarantee a gas plant or simply guarantee jobs at the end of a certificate of need, which is legislation that could be in front of you if those were the real concerns, is because the size of the plant is key to Xcel. The reason the size of this plant is so important is because the size of the plant equals the size of the investment and the size of the investment equals the size of the return. And that goes to shareholders at the expense of ratepayers.
As you’ve heard Xcel, and others, agree, this bill (even as amended) gives Xcel the sole discretion to build a 786 MW gas plant that it proposed in the last IRP. Or, in its sole discretion, Xcel could propose a different size in a future IRP. Xcel claims that its ratepayers will be protected because it has to go through a rate case. But the risk seems to be minimal that a plant authorized by the Legislature would be deemed to be unreasonable by the PUC. So I don’t think there’s a balancing of the risk and I think it prioritizes shareholders over the public interest.
So my clients and I are here to ask you today to respect the system that has been built and that we have in place to protect the public against the interests of the shareholders of a monopoly. This bill doesn’t do that. Thank you for your time, and I’m happy to answer any questions."
This blog was written by a visiting student in December 2016, after the announcement of the Army Corps of Engineers’ decision to do an environmental review on the Dakota Access Pipeline. Since then the Corps has opened a public comment period on the environmental review, and President Trump has issued an executive order encouraging agencies to rapidly review High Priority Infrastructure Projects. This executive order seeks to “streamline and expedite, in a manner consistent with law, environmental reviews and approvals for all infrastructure projects”— which is consistent with the law discussed in this blog, NEPA. Recent developments in the Dakota Access case could lead to litigation, but it’s too early to tell whether the government still intends to uphold the law and its commitment to do an environmental review.
WRITTEN BY: Sam Blackburn, Former MCEA Extern
The decision of the Army Corps of Engineers not to approve an easement for the portion of the Dakota Access Pipeline passing through Standing Rock is a great victory for proponents of both native rights and environmental protection. As a result of this decision, pipeline construction will be delayed, potentially for years while the Army Corps conducts further environmental review. Though much of the credit for this achievement belonged to the protesters braving adversity, the opportunity for the Army Corps’ decision comes from the National Environmental Policy Act (NEPA). While NEPA was created to improve government transparency and increase public involvement, its process of environmental review has allowed for some of the most important environmental protection successes in recent memory.
NEPA requires that every federal agency must consider the environmental, social, and economic effects of their proposed actions. This includes impact on cultural heritage protected by the National Historic Preservation Act, particularly relevant at Standing Rock. Through the process of permitting, corporate and industrial actions (such as building an oil pipeline) become subject to environmental review. Initially, during the environmental assessment process, the Army Corps of Engineers deemed DAPL would have no significant environmental impacts. After considering the concerns raised by protesters at Standing Rock, however, the Army Corps decided that further environmental review was required. This typically leads to preparing a full Environmental Impact Statement (EIS), which is a more detailed analysis which could put off construction for years.
The outcome at Standing Rock shows just how powerful environmental review can be. NEPA mandates environmental review for any project with significant impact, and the public has the ability to bring claims of impact to be considered. To facilitate this, there are several periods of required public commentary once environmental review has started. Even after an EIS has been completed, the public can still bring a case to court arguing that certain environmental impacts haven’t been considered or are more significant than the EIS admits.
In northern Minnesota, Enbridge was concerned enough about undergoing the public scrutiny of environmental review that when it was ordered to do an EIS, it pulled the plug on the entire project. Enbridge Energy sought a first-stage permit for its pipeline without undergoing environmental review. MCEA challenged the state agency's decision that an EIS wasn't necessary in court, arguing that the law required a review before any approval, and won the case. Rather than engage in the resulting environmental review, construction of Sandpiper was abandoned.
Though the process of environmental review has enabled the recent successes by the public against the Sandpiper and Dakota Access pipelines, the fight is far from over. Enbridge has an additional project in the works for Minnesota, a replacement and extension of the Line 3 pipeline. While the initial public commentary period has concluded, and an Environmental Impact Statement is being prepared for the pipeline, there will be another opportunity for the public to get involved and speak up against Line 3 during the public comment period for the draft EIS, which will take place in 2017. Environmental review is only powerful if the public takes the opportunity to make their voice heard and so we must speak up and ensure that the harmful environmental impacts of these pipelines are not ignored.
WRITTEN BY: Hudson Kingston, MCEA Staff Attorney
I might be the only one who will miss 2016. Not that I’ll miss the endless politicking, or the unbelievable run of bad news, no, but because 2016 was the official UN International Year of the Pulses. For one shining year, lentils had their own twitter feed. Not since 2008’s Year of the Potato has the UN been so compelling (by contrast, let’s just forget about 2014). In this respect 2016 is a tough act to follow. So I was pleasantly surprised when I read that UN had decided to unveil 2017 as the “International Year of Sustainable Tourism for Development.”
Sustainable tourism for development is an important concept, and one that is especially important for Minnesota right now. In December, in keeping with the idea of promoting sustainable development, the Departments of the Interior and Agriculture agreed (press release) to “pause” mining exploration and leasing near the Boundary Waters Wilderness and Voyageurs National Park. This pause will give the agencies time to study whether the dangers of sulfide mining are too high to permit it on the doorstep to these amazing wild recreation areas. (For more explanation of the government’s action, please see my colleague’s blog here.)
What’s important to understand is that the agencies aren’t saying that nature trumps the economy, just the opposite. They are interested in how the sustainable economy that exists around and because of these areas is likely threatened by unsustainable industries that produce short-term jobs and long-term pollution (likely for hundreds, if not thousands, of years in the case of water pollution). As Bill Forsberg Sr. wrote in 2013: “Outdoor recreation in Minnesota generates $11.6 billion in consumer spending, 118,000 direct jobs paying $3.4 billion in wages, and $646 million in state and local taxes.”
The growing sustainable tourism industry in Minnesota depends on pristine wilderness worth visiting.
Perplexingly, a month after the above announcement, one of the same federal agencies (the U.S. Forest Service, part of the Department of Agriculture) failed to acknowledge the danger that pollution poses to Minnesota’s sustainable economies. In approving the Environmental Impact Statement for PolyMet’s proposed NorthMet project, the USFS failed to consider the important economies that are tied to clean water in Lake Superior (i.e. winter skiing, summer paddling, and beer, to name a few). Such approval belies Minnesotan’s love for, and reliance upon, the world’s greatest Great Lake. The threat of long-term water pollution from the St. Louis River puts all Duluth industries and people in danger of economic and health harms.
In keeping with the International Year of Sustainable Tourism for Development and the promise of durable development in Northern Minnesota, mining projects that risk destroying the resources of the area should be looked at with extreme skepticism by government decisionmakers. Sustainable development is not just a buzzword for UN dignitaries—as Aaron Brown wrote in a recent piece on PolyMet:
"This is why I argue that we need to think differently about the economic future of Northern Minnesota. If you like mining, that’s great. We need minerals. The jobs are great. But as a region, we have to plan for a much broader future — one stunted whenever the word “jobs” is tied solely to a shaky commodities business that cares not a lick whether Iron Range towns live or die."
Creating a broader economy through sustainable industries, such as outdoor recreation, also protects against a boom-bust economy based on producing commodities. Sustainable tourism is one area where Northern Minnesota has outsized potential and a unique replenishable resource, its breathtaking natural places. Sustainable economic development can keep our state both prosperous and habitable for centuries to come.
WRITTEN BY: Jim Erkel, MCEA Land Use & Transportation Director
The legislature is back in session, and it will revisit funding for transportation following its chaotic fail at the end of last session. The means by which we fund transportation are complicated, and sometimes difficult to understand. In fact, it is complicated enough that legislators on the transportation committees are starting the session with tutorials on funding mechanisms from the staff at MNDOT and the Metropolitan Council.
The black-box character of how transportation is funded lends itself to a number of talking points that push the discussion, but some of them are either not true, stretch the truth, or need a substantial amount of context to be properly understood.
This is the first post in my blog series called "Dollars & Nonsense." Each post will take a transportation funding issue, or talking point, and I will walk through the policies behind it, look at the numbers, and provide background to better grasp the complexities of transportation policy in Minnesota.
We will start small with a look at how Minnesota's main user fees -- the state's gas tax and Metro Transit's fares -- have kept up with the cost of maintaining and operating roads and transit systems. We will work our way up to big ones, like 'roads pay for themselves; transit is heavily subsidized' and 'the road needs of Greater Minnesota has been neglected.'
Transit critics point out that farebox recovery only covers between 25%-30% of the cost of Metro Transit's operations (note that Metro Transit has not increased fares since 2008) and argue that fares should be raised to reflect the increased costs of operation. As a rule, it is reasonable to expect that user fees will be periodically adjusted to reflect changes in the costs of operation. However, what is good for the goose is also good for the gander. The state's gas tax was last increased in 2008.
In the graphic below, we compare how the user fees have changed since 1988, the last time the state's gas tax was raised before 2008. You will see that the gas tax has been raised only once, while transit fares have been adjusted 10 times. Compared to several measures, transit fares have more than kept up with inflation, and it is the state's gas tax that has failed to keep up with increased costs of operation.
If the gas tax had increased at the same rate as Metro Transit's base fare, we would be paying 40.1 cents per gallon, not 28.5 cents per gallon. Using the rule of thumb that one cent of Minnesota's gas tax raises $30 million per year, the difference of 11.6 cents translates into roughly $348 million per year. That's more than the statutory dedication of sales tax on auto parts and repair to roads proposed by House Republicans last session.
Rather than raiding the general fund and re-directing monies that support issues such as health care and education, road interests should commit to the principle articulated by transit critics, and raise their user fee to reflect the higher costs of operations. Transit already has.
WRITTEN BY: Jenna Greene, student at Carleton College, former MCEA Extern
In 1991, the First National People of Color Environmental Leadership Summit gathered in Washington D.C. and adopted 17 principles of Environmental Justice. These principles affirm the need to protect the earth and frame environmentalism as a social justice issue, emphasizing that many environmental harms disproportionately and adversely affect poor people and people of color.
Since this pivotal summit, all 50 states and the District of Columbia have enacted an environmental justice law, executive order, or policy to ensure that environmental justice concerns continue to be addressed. Environmental justice advocates, policymakers, and community members from around the country have exposed and remediated environmental justice concerns ranging from landfill siting, pollution levels, and access to environmental benefits, but the fight for justice is just beginning.
The Minnesota Pollution Control Agency (MPCA) recently announced the formation of the MPCA Environmental Justice Advisory Group consisting of 16 members from throughout Minnesota. The purpose of this group is to provide recommendations and advise the MPCA on topics related to environmental justice principles. The advisory group members come from a wide range of backgrounds and focus areas. Make sure to check out the many different projects these group members have been involved with that work toward a more equitable Minnesota.
This monitoring yielded violations of daily and annual TSP standards, exceedances of PM10 daily standards, elevated lead concentrations, and elevated heavy metal concentrations.
This legal battle between MPCA and Northern Metals has not yet been resolved, but the environmental injustices faced by the North Minneapolis community has captured the attention of government officials such as the mayor of Minneapolis, Betsy Hodges, who called this pollution an environmental justice issue affecting “one of the most overburdened neighborhoods in our community.”
North Minneapolis residents have been organizing against the metal shredder facility, including the local rock band Poliça performance to raise awareness of the environmental injustices taking place in the neighborhood. Community activists have been working hard for almost five years to make these issues known to the community and the public. Roxxanne O’Brien, a community activist and North Minneapolis resident, says the community is “literally fighting for our lives.” To read more about the work that North Minneapolis community activists, including O’Brien, have been doing for many years and a more in-depth account of the community movement surrounding the Northern Metals case, check out this Twin Cities Daily Planet article.
Although the legal action against Northern Metals is a step toward eliminating environmental injustices in North Minneapolis, the community has been concerned about environmental and human health for decades, and Northern Metals is not the only polluter in the area. As organizations such as MCEA continue to fight for the health of the environment, it is critical that we consider how environmental harms disproportionately affect certain communities across Minnesota.