The omnibus jobs and energy legislation signed by Gov. Mark Dayton will remove utility regulators' authority to settle customer disputes with electric co-ops — a measure the governor earlier vetoed as a single-issue bill.
State further restricts PUC oversight of electric co-ops
The legislation signed by Gov. Dayton was tucked into omnibus jobs and energy bill.
The new law will diminish the Minnesota Public Utility Commission's oversight of the state's 45 electric co-ops, which are mostly in rural areas. But it does allow the PUC to finish an inquiry into fees that the co-ops have been charging to customers with solar-panel arrays. The PUC is looking at whether the methodology behind the fees complies with state law.
With the legislation signed Tuesday, "basically the co-ops will be able to do whatever they want to," said David Shaffer, an attorney for the Minnesota Solar Energy Industry Association, a trade group. "I don't feel the consumer protections that have been put into place will be effective."
The co-ops argued that they are owned by their customer-members, who elect directors, so stricter PUC oversight would take away power from the consumer. The PUC "can't second-guess what a co-op has already decided," said Jim Horan, a lawyer for the co-op trade group Minnesota Rural Electric Association.
The PUC has long had minimal oversight of co-ops, focusing on investor-owned utilities.
Last summer, though, the PUC opened a review of monthly grid connection fees — which ranged from $7 to $83 — after fielding complaints from co-op customers who wanted to install their own solar-panel arrays.
The co-ops say the solar fees are needed to cover their fixed costs. Renewable energy advocates say the fees can make rural, residential solar economically untenable.
Under the new law, co-op members can't take complaints about their co-ops to the PUC. Instead, the co-op member and co-op must mutually agree on a mediator to help solve the issue. The co-op must pay 90 percent of the mediation cost; the member, 10 percent.
But a "mediator has no real authority, and there is no enforcement mechanism to mediation," said Allen Gleckner, director of energy markets at Fresh Energy, a renewable energy research and advocacy group based in St. Paul.
Horan said mediation is more efficient than going through an administrative process with the PUC.
Dayton had vetoed a similar measure in March after indicating he would quash bills that he perceived as weakening the PUC's authority. The earlier stand-alone legislation had passed by large measures in both the House and Senate.
Mike Hughlett • 612-673-7003
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