ERMUSR Misc Issues 05-16-2006 - Laserfiche WebLink

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OPINIONS Reliable, affordable elech icity at risk ectnetty costs are at a critt- cal point in .Minnesota without government policies on renew able technology,. reliance on th goyertunent issuing. more man- wholesale electric market t dates. Gturent proposals in the meet daily electricity need Legislature, if left unchecked, rather than will make it tougher for our building their company and hundreds others own genera- to compete in the national and tion, and international marketplace. The . higher costs result will be fewer jobs and a for the fuel dramatic impact on the state's that powers ' A~rel able and affordable supply of electricity is among the Minnesota Chamber o Commerce's priorities and irate- gral to a competitive economy. Both are at risk. State policy-makurs continue to promote renewable energy mandates with little discussion - or even knowledge - of their potential effect on elechic- y costs orreliability. The latest example is Gov Tim Pawlenty's directive in his State of the State speech that Minnesota seta "strategic goal" to produce 25 percent of its energy from renewable sources by 2025. No specifics. were offered, but advocates of man- dates take this as a "green light" for requiring utilities to add renewable generation regardless of its consequences for business and residential cus- tomers alike. Businesses already are see- ing substantial increases in electricity bills compared with a year ago. Utilities are impos- ing and/or seeking higher rates, in part due to compliance with .their genera- tors. .For example, on f any given day, Xcel 'Jay ' Energy' is Johnson buyinga sig- nificantportion of its electricity on the wholesale market. Most of this. electricity is produced with natural gas which makes it very expensive due to signifi- cant increases. in gas costs dur- ing the past year. Manufacturers now are com- peting with utilities for gas. "They need it to meet strict em~i- ronmental requirements. We, on the other hand, need it to make our produck Risuig costs hurt us all. Double-digit increases in energy cost. per kilowatt hour are fast becoming the. norm across the state. For example, a downtown St. Paul office build- ing saw its January cost increase by 25 percent over last year. The cost at a St. Cloud manufacturer rose 16 percent, and the cost at our facility in Owatonna also is 25 percent higher than. a year ago. - Several utilities -including Xcel Energy Southern ones leads the nation in almost , Minnesota. Municipal Power every category. Hardly a week passes without a report on an Agency, Daityland Power and alternative energy initiative Alliant .Energy - have . Witness the fact that Xcel increased base rates. Other util- Energy has overtaken Southern hies seem likely to follow in the California Edison as the corning months, nation's largest purchaser of Two legislative proposals wind energy, according to the would worsen ,the situation. One bill would require that util- American Wind Energy Association. Minnesota also hies generate 20 percent of 'their electricity from renewable ranks first in customer partici- pation among leading utility sources by 2020. The Minnesota Chamber supports green~ower programs, accord- ing to the U S. Department of development of renewable Energy. Our state's commit- technologies but opposes addi- tional mandates. Renewable inert to community-based wind energy, a law passed in technologies remain expensive because to maintain reliability 2005, gives Minnesota farmers and small wind entrepreneurs a standards,. they frequently- leg up on big producers like GE requue backup generation from Wind and Florida Power & a "dispatchable" power source Light -ensuring that the wind - typically, natural gas, Another bill would mandate generation stays in Minnesota. A mandate would threaten dramatic reductions in mercury these homegrown energy envssions from power plants on sources. a far more aggressive timetable Renewable technology ini- than exists in current federal law The Minnesota Chambe tiatives are good -but there is r continues to work with all a cost, especially when legisla- tors insist on expensive man- stakeholders to reduce pollution dates rather than incentives to through voluntary efforts, but grow the industry. Vue all must opposes legislative manda*.es to be keenly aware that every achieve reductions that may not decision made by policy-mak- even bepossible with existing ers or utilities may come with technology. additional expense to cus- This nation is moving toward a cleaner energy future, tourers. .lay Johnson is president of and Minnesota is leading the Bushel Boy .Farms in way. Our state's commitment to O-a~atonna and a member of the current renewable technologies Minnesota Claanaber of as well as financing research Commerce's Energy Policy and development to create new e o s Committee. Lam! ~ - , _~ ~ /~~ a / i ,/ '~ (= Wit-"' ~~.e. tat .........y~~i~. ~:~f ' ~ .