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Municipal utilities are owned by the <br />communities they serve. Helping local <br />business succeed. and supporting the <br />local economy have been municipal <br />utility hallmarks for generations. We <br />have long supported community <br />economic development initiatives, and <br />we will continue to do so. Bringing <br />economic value to our communities is <br />an important part of our mission. <br />Municipal utilities support the <br />Communi -Based Energy <br />Development (C-BED) concept. <br />A number of our municipal power <br />agencies have either participated in <br />or aze considering participation in <br />C-BED qualified projects. But if <br />C-BED is to be successful, it must be <br />implemented in a practical, workable <br />manner, and it must ensure that <br />proposed projects aze viable in the <br />short and long term. <br />The biggest impediments to C-BED <br />development continue to be the <br />lack of transmission, availability of <br />turbines, and the sporadic nature of <br />the Production Tax Credit (PTC) <br />reauthorization. The best incentive <br />that the state could provide to <br />C-BED would be to ensure that <br />proposed transmission line projects <br />are permitted in an expeditious <br />manner. The certificate of need <br />process for transmission must be <br />streamlined and simplified so that <br />needed improvements can move off <br />the drawing boazd and both C-BED <br />and non-C-BED projects can begin <br />carrying energy and help meet our <br />Renewable Energy Standazd (RES) <br />goals. <br />HF 357 and SF 399 were introduced <br />to require electric utilities to purchase <br />renewable energy from certain <br />C-BED projects. Specifically, the bill <br />would: <br />Require that no utility may build <br />other generation unti1800 mega- <br />watts of new C-BED capacity is <br />installed in the state. <br />• Set the price for C-BED projects <br />of 5 MW or less in statute at. a rate <br />higher than the market or the net <br />metering rate. <br />• Authorize MPUC to set <br />standardized contract provisions. <br />We oppose this legislation, which <br />creates serious problems for joint <br />action agencies trying to comply with <br />Minnesota's RES for the following <br />reasons: <br />There is no need to mandate pur- <br />chases from specified renewable <br />projects. Utilities currently have <br />about 420 MW of community <br />wind in the state and 120 MW of <br />C-BED wind, about 259f- of the <br />total installed wind capacity in the <br />state. <br />The 2007 RES was enacted with <br />a directive to utilities to pursue <br />the RES in the most efficient and <br />cost-effective way possible. This <br />legislation would make it harder <br />and more expensive to meet those <br />standazds and could significantly <br />delay better renewable projects by <br />mandating that smaller, less effi- <br />cient projects would be built first. <br />• the proposed legislation doesnt <br />address the real obstacles to C- <br />BED projects: difficulties in ac- <br />cessing the MISO transmission <br />system, turbine shortages, and <br />technical issues related to con- <br />necting to the grid. Instead, the <br />legislation only guarantees an <br />exorbitant profit for a few wind <br />developers. <br />Public power systems are the original <br />community-based energy projects <br />owned by and benefitting the <br />consumers they serve. They aze an <br />ideal vehicle for local participation.. <br />If any change should be made to <br />the C-BED law, municipal electric <br />utilities and municipal power agencies <br />should be allowed to secure a larger <br />percentage participation in C-BED <br />projects than currently allowed under <br />Minnesota Statute section 216B.1612, <br />subdivision 2. <br />Community-Based Energy Development <br />