ERMUSR MISC 12-11-2007 - Laserfiche WebLink

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i" 1 ~ ~ v..'S l ~ a,4t b. t: Climate Change Minnesota's public power systems recognize that the phenomenon of global climate change is the most significant environmental policy issue confronting the nation. There is a growing consensus within the scientific community that the problem is real, that the consequences could be severe, and that release of greenhouse gases from a variety of human activities worldwide is a significant contributor to the problem. We understand the desire of policymakers in Minnesota to take action in an attempt to stem the tide of global warming. Perhaps the most effective action we can take here in Minnesota, the enactment of a renewable energy standard, is already well underway and will establish Minnesota as a national leader in limiting growth of C02 emissions. We do not believe, however, that aMinnesota-specific fossil fuel registration and cap-and-trade program is a workable approach to the climate change problem. Twenty-first century regional wholesale electric markets simply do not lend themselves to a registration and cap-and-trade regime imposed by a single state. In our region of the country wholesale electricity is sold into and bought from a market operated by the Midwest Independent System Operator (MISO), headquartered in Carmel, Indiana. The MISO market covers a region that extends from eastern Montana to western Pennsylvania and from southern Manitoba to the boot heel of Missouri. It is difficult, if not impossible, to determine the precise source of energy that is purchased in the MISO market. All energy is sold at the market clearing price, and for market purposes the exact source of the energy sold to a particular buyer is irrelevant. It would be very difficult for a state like Minnesota to impose a fossil fuel registration and cap-and-trade scheme on atechnology-neutral regional market such as that operated by MISO. Further, the cost and complexity of implementing asingle-state program in a regional market would likely be prohibitive. It would be similarly difficult to impose a fossil fuel registration and cap-and-trade scheme on bilateral contracts. The additional burden of complying with these requirements to sell into Minnesota would likely discourage out- of-state generators from making sales into Minnesota. The result would be a constrained Minnesota wholesale market and higher prices for Minnesota consumers. Further, we are very concerned that-state climate change legislation could be used as a vehicle to stop ongoing projects already in the design and permitting phase. The electric power network has been described as the most complex machine ever devised. Demand and supply must continually be matched on a real time basis every second of every day. It takes years to bring a major new generating facility through the planning, permitting, and construction process. It is unrealistic to assume that emerging technologies will be ready to serve in the near term as acost-effective alternative to projects currently underway. We need to ensure a reliable and cost-effective supply of energy for our families and businesses as we develop our response to climate change. Our policy regarding climate change should be forward-looking. We should focus on shaping the future rather than seeking to rewrite the present. The fact is that it will be very difficult to impose astate-specific solution on a problem that is global in scope. Neither electrons nor emissions are likely to stop at the state line. We believe that Minnesota should concentrate its efforts on pushing for national climate change legislation. Minnesota's public power systems would support and participate actively in these efforts. We believe that effective climate change policy must: • Be national in scope. • Be economy-wide and apply to all industries, including sectors such as transportation and manufacturing as well as electric generation.