Gov. Mark Dayton vetoed a bill Monday that would remove state regulators' authority to settle certain electric utility disputes.

In February, Dayton indicated he could veto bills perceived as weakening the authority of the state Public Utilities Commission — a group appointed by the governor that regulates the state's electricity, gas and telephone companies.

"Eliminating the PUC's role would remove critical consumer protection for customers," Dayton said in a letter Monday to House Speaker Kurt Daudt, R-Crown.

The Senate passed the bill 39-26 on Thursday after an 89-37 House vote in February.

Rep. Dave Baker, R-Willmar, the bill's chief author, did not have a comment.

Rep. Pat Garofalo, R-Farmington, a co-author of the bill, was "disappointed."

"The rural communities had done everything right to achieve a bipartisan consensus on the issue," Garofalo said Monday night.

In a Twitter post, Garofalo said, "We will keep trying."

The next step, Garofalo said in a phone interview, is to "include this in our appropriations bills."

A common complaint handled by the PUC concerns additional fees some co-op customers are charged after installing solar panels or wind generators.

These customers say the grid connection fees — ranging from $7 to $83 — were a disincentive to install sources of renewable energy. The co-ops say the fees are needed to cover their fixed costs.

The legislation would have sent these disputes to a third-party mediator, not the PUC. But "it does not provide any guidance on how this mediation would work," Dayton said in his letter.

Customers elect their electric co-ops' boards of directors. Since co-ops are accountable directly to customers, they don't need to be "second-guessed" by the PUC, Jim Horan, an attorney for the Minnesota Rural Electric Association, told the Senate energy committee.

Republicans want the PUC to be restored to "its original roots," where "co-ops make their own decisions," Garofalo said Monday.

However, opponents of the bill have argued that co-op customers have nowhere to go if they're at odds with their local utility.

In his letter to Daudt, Dayton gave an anecdote about a farmer having an independent review completed by the PUC when an informal process with his co-op did not resolve a dispute over a fee charged on his farm's wind turbine. The fee was later removed from the farmer's bill because of the independent review, Dayton said.

"All Minnesota customers — from family farmers to large businesses — should be able to invest in technology to produce clean and efficient energy with the assurance that the PUC is available to provide consumer protection," the governor said.

Staff writer Mike Hughlett contributed to this report.

Karen Zamora • 612-673-4647

Twitter: @KarenAnelZamora