Proposal would cut red tape so clean energy projects can be built faster in Minnesota

As the state tries to find ways to meet its pledge of a carbon-free electric grid by 2040, a push to streamline the state's permitting system for renewable energy projects and transmission lines is gaining momentum ahead of the legislative session that begins in mid-February.

While an effort to nix a contentious rule that can limit solar development on what's known as "prime farmland" has already stalled, a new and potentially influential task force report includes dozens of other ideas to speed up the regulatory process that could be in play.

"Everybody knows that if we're going to actually meet the challenge of that law, we're going to have to construct in Minnesota an enormous amount of new renewable generation and transmission infrastructure to connect it all up," said Dan Lipschultz, an energy consultant and former Minnesota Public Utilities Commission (PUC) member who led the task force.

The DFL-controlled Legislature is likely to debate other energy issues, including emerging nuclear technology and how to expand the use of geothermal energy for heating. But permitting will be a focus within a more modest climate agenda for Democrats after lawmakers last year approved the carbon-free standard and voted to spend an unusually large amount of money on energy programs.

"Permitting reform on transmission will certainly be a really important issue for the House this session," said Rep. Patty Acomb, a Minnetonka DFLer who chairs the House's Climate and Energy Finance and Policy Committee.

Easing permit regulations gaining support

Members of the task force, which the PUC set up in August, did not view Minnesota's system as broken, but as one with room for improvement, Lipschultz said.

The task force took input from more than 30 organizations, including state agencies, utilities, energy developers, climate advocacy nonprofits and agricultural trade groups before compiling 35 ideas that either the Legislature or the PUC could act upon.

Christy Brusven, a permitting attorney for Fredrikson & Byron who has long helped steer large energy projects through the PUC, said Minnesota's process is "very robust" — but some steps are administrative, unpredictable "and frankly not adding a lot of value."

Projects in North and South Dakota, for instance, can secure a permit significantly faster and also more quickly progress to hearings and other public engagement, she said.

Alone, each of the proposals raised by the group would shave off only a small amount of time. But Lipschultz's report says 12 key reforms together could chop as much as nine months from a process that often takes five or more years from development to construction of major energy projects.

Brusven said what she's seen of a draft bill would make the regulatory process shorter, more predictable and more uniform, and she said it would keep elements of public engagement and environmental review that people value.

One significant proposal would allow PUC staff members to determine when a permit application is complete rather than needing an order from the commissioners. It could save applicants up to 60 days, enough to potentially help a developer avoid missing a construction season.

Another idea would transfer environmental review for energy projects, as well as staff, from the Department of Commerce — which represents consumers in the process — to the PUC. The report says this would streamline the process and save up to a month in time.

Other proposals in the task force report would limit contested case hearings in certain circumstances and eliminate certificate of need permits for all wind and solar projects and some transmission lines. Some could limit public input, though it's unclear what might be considered by lawmakers.

Aaron Klemz of the Minnesota Center for Environmental Advocacy, a nonprofit that supports rigorous environmental review and public input, said his organization backs nearly all of the 12 task force proposals Lipschultz mentioned. Expediting the process for wind, solar and transmission is generally good as long as changes don't spill over to pipelines and fossil fuel infrastructure, he said.

"I think the fact that everyone is so careful to point out that there's not a reduction in public process or public input is something that we appreciate," Klemz said.

But Klemz, the group's chief strategy officer, said his organization did have some concerns about transferring an environmental review unit from Commerce to the PUC. That's because Commerce's work goes beyond renewable projects and includes analysis of other things like oil and natural gas pipelines.

He worries the move could give "the impression that there's less independence of analysis" on issues that are quite controversial among environmental groups, like Enbridge's Line 3 pipeline.

House Majority Leader Jamie Long, DFL-Minneapolis, plans to sponsor the permitting bill and said the state should still have a "robust process" to protect the public. But he said Minnesota's transmission laws "were not designed for speed" and aims to cut two years off what can be a 10-year road to finish construction for transmission lines needed to support clean power sources.

Acomb also said she's interested in relaxing Minnesota's permit system for transmission lines. But she said she did not want to endorse any draft legislation yet and noted there are environmental justice groups that weren't part of the task force, limiting its perspective. (Lipschultz said he included all who asked to be.)

Republican legislators favor changes to the regulatory process, too, though Sen. Jason Rarick, R-Pine City, said during a recent legislative panel that it should come as part of a larger effort to cut red tape for all kinds of business regulation. Rep. Spencer Igo, R-Wabana Township, said permitting should have simple timelines and respect communities where a project might be built. He said some proposals in northern Minnesota have been stuck in permitting when communities "desperately need them."

Prime farmland rule unlikely to change

One idea that likely won't move forward this year is eliminating or significantly changing what's known as the "prime farmland" rule that can affect solar development but is defended by agricultural groups.

The PUC regulation bans large electric power plants from using more than a half-acre of prime farmland — defined by a federal measure of soil quality — per megawatt of capacity. Producing 1 megawatt of solar can take up roughly 7 to 10 acres of land and roughly 30% of Minnesota's total land mass is made up of prime farmland, according to Clean Grid Alliance (CGA), a trade group representing developers of renewable power and transmission.

The PUC has approved projects on prime farmland, using an exception for when there is no feasible or prudent alternative for a project. Madelyn Smerillo, CGA's regional policy manager, said it could be a bigger impediment to solar if the PUC was less favorable toward renewable power in the future.

Smerillo said the significant opposition from the ag industry led CGA to pause its efforts to change the rule for now.

Sen. Nick Frentz, a North Mankato DFLer who chairs the Energy, Utilities, Environment and Climate Committee, would be a key vote on such a rule change in the narrowly divided Senate. He said there was "no chance" he would support a "radical change" to the prime farmland rule, citing the large ag industry in his district.