The Minnesota Chamber of Commerce has been a longtime supporter of the development of our state’s renewable energy industry. We support it not just as a supply of electricity, but also for the innovation-driven businesses new renewable technologies create.
We agree with much of what Lt. Gov. Tina Smith said in “Tackling climate change will pay off” (Dec. 28). Where we part company is on the policy direction Minnesota has chosen to pursue renewable technologies. Rather than relying on restrictive state mandates, we believe a more productive approach is through advanced research and development and measurable goals. The consequences of our past policy choices are that our electric rates are less competitive than ever.
The lieutenant governor touts our rates for residential customers, but says nothing about rates for the businesses that keep Minnesotans working. Data compiled in April 2015 from the U.S. Energy Information Administration show that Minnesota is losing its competitiveness. In 1990, Minnesota’s electric rates were ninth most competitive among all states; in 2013, they ranked 29th. During the same period, commercial rates slipped from 12th to 24th, and industrial rates dropped from 15th to 32nd. Even residential rates lost ground, dropping from 16th to 30th.
The Minnesota Chamber supports reliable, renewable and affordable energy for all customers, but we are especially concerned about commercial/industrial customers. Energy is a pressure point for many businesses in today’s global economy. Owners pay close attention to energy when contemplating where to locate, expand or continue operating facilities.
Utilities recognize the impact of these higher costs on our state’s economy. Minnesota Power is asking the Public Utilities Commission (PUC) for rate relief for its paper and mining customers, according to news accounts. Otter Tail Power and Xcel Energy also have customers that urgently need more competitive electric rates. Minnesota Power’s proposal, according to its spokesperson, “corrects a long-standing unfairness to large power users whose electric rates exceeded their cost of service, subsidizing residential customers’ rates.” It’s ironic, but the breaks provided for residential ratepayers could cost these same customers their jobs.
Make no mistake, part of the problem is also our state’s renewable energy mandates. Recognizing this, the Legislature exempted paper and mining employers from any rate hikes due to our state’s latest mandate, solar electricity generation.
The deteriorating competitiveness of our electric rates is largely the result of legislative mandates and actions by the PUC. We urge the lieutenant governor and other policymakers to work harder to restore the competitiveness of Minnesota’s commercial/industrial electric rates. Without the good jobs provided by our state’s steel, paper, wood products and other energy-intensive businesses, electricity at any price is too expensive for residential customers.
Bill Blazar is senior vice president of public affairs and business development for the Minnesota Chamber of Commerce.