Letter: State legislation may increase your electric ratesElectric cooperatives support renewable energy, but pending state solar legislation goes too far and will increase electric rates for all Minnesotans.
By: Richard G. Burud, Federated General Manager and Dave A. Hansen, Federated Board President, Worthington Daily Globe
Electric cooperatives support renewable energy, but pending state solar legislation goes too far and will increase electric rates for all Minnesotans.
The House Energy Policy Committee recently introduced an Omnibus Energy Bill. It excludes cooperatives from the Renewable Energy Standard change (40 percent by 2030), but burdens them with other proposals that will significantly raise costs to all customers. These include a four percent Solar Energy Standard by 2025, a 1.33 percent sales tax on electricity sales for solar subsidies, net metering expanding to 1,000 kW, third-party ownership and a Value of Solar system that takes final say away from cooperatives.
Stranded costs are co-op expenses left behind when renewable projects make their own electricity. Yet, renewable customers still need backup utility electricity that requires power plants, transmission/power lines, meters and other utility operating costs. Basically, solar customers want to use our infrastructure to sell their power while the remaining customers pay for that infrastructure. That’s not fair.
Federated conducted a stranded costs’ study for renewable projects that come on our system. Our stranded cost is $586; our wholesale power suppliers’ stranded cost is $566. That’s $1,152 annually per renewable project! If five percent of our members have renewables, each member’s rate goes up $172 a year. The Solar Mandate alone would cost Minnesota more than $10 billion.
While we support renewable energy, we do not need more generation. Cooperatives estimate an annual $70 million increase in expenses because of the renewable mandate. Our members and all Minnesotans cannot afford more unneeded expenses.
Federated encourages you to ask your legislators to oppose the solar bill (DE HF 956). These bills should provide language that is fair to everyone.