The Minnesota Lawmaker Tackling Energy Problems Head-On — (Bonus) Episode 252 of Local Energy Rules

Patty Acomb:
The intent of that is to have the Public Utility Commission set up a rate structure that will ensure that those data centers will pay for all of those things on their dime.

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John Farrell:
Hey, you’ve stumbled on some bonus content from my two-day nine interview podcast recording marathon at the Gateway to Solar Conference in October, 2025. Please consider donating to ILSR to keep conversations like this flowing. Now, here’s my exchange with Minnesota representative Patty Acomb exploring the pressures of federal policy and affordability, clean heat and community solar, and the importance of strong regulatory oversight. First of all, Patty, welcome and thanks so much for taking the time.

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Patty Acomb:
Well, John, thanks for the invitation. It’s great to be here with you at this wonderful annual event. The Gateway to Solar Conference is always a great event.

John Farrell:
I wanted to dive right into it. Legislators have a huge amount of responsibility over how our energy system works. You essentially are setting the rules for the energy system, the monopoly structure of it in terms of one utility for one service territory. You have climate change to think about. You have affordability to think about. What is top of mind for you right now as you think about the next legislative session or just kind of the responsibilities that you have over that energy system as a legislator?

Patty Acomb:
Well, I think that’s an incredibly important question, especially at this moment in time where Minnesota has focused really hard on clean energy and we have our clean energy goals. And up until this last election, we had been able to look to the federal government as a partner in that work. And that has all changed with the new administration. And so we in Minnesota need to be looking at what we’re doing around affordability, around climate change through a little different lens.

Patty Acomb:
And so I think for me that will be continued focus on clean energy because that is the cheapest form of new energy. And so that will help address the affordability issue as well as climate change. And I think I am saddest about the lack of attention at the federal level to climate change because of quickly we’re seeing impacts all the time. And so because we have done a great job making goals around clean energy, we need to continue in all sectors. And one that I want to look at next is really around clean heat. So buildings provide 40% of greenhouse gas emissions here in Minnesota, so what can we be doing to address those emissions? And so electrification certainly and using clean energy to power that electrification. So that’s going to be where I’m looking.

John Farrell:
One of the things that I found really interesting about growing up professionally in Minnesota is that we have had this long history of encouraging communities to be more self-reliant with their energy. We were one of the first states to adopt net metering to allow people to get credits on their bill for producing energy from rooftop solar. We had this whole history of community-based energy development in the early 2010s. We’ve had community solar, maybe clean heat is the next iteration, but what do you think is the next iteration of that of Minnesota trying to figure out how communities can do more of that sort of self-service?

Patty Acomb:
Well, I think those are all incredibly important programs and programs that are sort of in their infancy. I mean, community solar gardens is a pretty established program doing quite well in our state, but net metering, we have pretty low amounts of rooftop solar. And so I think we need to be working to protect those programs and ensure wider adoption, so removing barriers for people or companies to not be using these things. So I’ll be looking at ways we can do that, protect those and bolster those programs that you mentioned as well as maybe expanding to other forms of clean energy. And one that I think about quite a bit is geothermal. And two years ago we passed planning grants for communities to look at and explore geothermal. I think that that will give them the opportunity to do it in a way to get the information, find the return on investment, how much it’s going to cost and determine for themselves and their community whether it makes sense, but it can kind of take that unknown out of the picture and they can then make the choices with information. I think geothermal and other forms of clean energy should also be looked at when communities are trying to be self resilient and reliant and sustainable.

John Farrell:
One of the things I’m super excited to be doing is I just did a first episode of a podcast series that I’m going to do as sort of a follow along with Cooperative Energy Futures as they’re looking to develop a community geothermal project because I’ve been impressed with the way that the legislature has already been thinking about this. We have the Natural Gas Innovation Act that is requiring the gas utilities to look into this. We have the Eco Act which focuses on other energy efficiency, fuel switching, electrification. You have the planning grants that you mentioned. So I’m hoping to learn something through that process that might help to give some feedback on what’s working. Where are there more things? I guess I’m curious if there are other things you’re already thinking of like, Hey, this is a place where we need more policy action.

Patty Acomb:
Well, since you brought that up, I will say a program that we passed in Minnesota a couple years, several years ago at this point is solar for schools. And so looking at an opportunity for geothermal for schools, maybe especially if there’s a complex of schools that make networking possible and maybe even combining in with some housing nearby. So the whole networked geothermal in school. So I’m interested in looking for ways we can adopt that kind of model for that as well. So lots of ideas.

John Farrell:
I did want to ask you about on Friday last week, the Minnesota Public Utilities Commission made a final decision on the purchase of Minnesota Power’s parent company. I feel like there’s parent company after parent company. I can name like five corporate names here. But anyway, the long and the short of it is this investor owned utility publicly traded company that had been providing electricity service in Northern Minnesota is now going to be owned by a combination of BlackRock private equity firm and a Canadian pension fund. One of the notable things about the decision was that the administrative law judge that was overseeing the decision had recommended against it because of concerns about potential higher cost for consumers. I guess you make the decision as a legislature to delegate responsibility to the commission to make these decisions. They’re a little closer to them. I don’t want to make you try to second guess publicly unless you feel like you want to that decision. But I don’t know if you do have any reflections on how that impacts the broader goals that you’ve worked out on as a legislator around climate, around affordability, around any of these kinds of issues.

Patty Acomb:
Well, I do think this was a pretty important decision and one that a lot of people were looking at. I heard from a lot of different stakeholders about this issue. And I will say I have some concerns about the potential impact for residential rate payers in particular. And we see already in Northern Minnesota that the industrial rate payers have worked out energy rates with a utility. So in essence, residential rate payers are subsidizing these industrial users. And I am concerned about the possibility of data centers entering this area and this whole situation and what that’s going to do because they are industrial users that are kind of amped up even more. And so are they going to be putting pressure on utilities to spread those costs around again, more so to the retail rate payers. So I have some concerns. I’m certainly going to be watching how it goes, but I am hopeful that the public utility commission who will be having oversight over all of the decisions and the rate cases coming out of the utility. So that gives me comfort. But I just want to make sure that when we’re doing this, there’s enough light on it that we can be assured that the public interests are being held up.

John Farrell:
It definitely seems like you have nothing else. The commission has kind of assigned themselves some homework through this because the ultimate accountability in terms of whether or not this ends up being expensive for consumers is going to come down to whether or not the commission will hold the line on potential future rate increased requests from the utility that’s now owned by BlackRock.

Patty Acomb:
Yeah, that’s exactly right. And I just given the uncertainty, we don’t know how data centers are going to play into all of this, but I have concerns when you have some of the largest for-profit companies coming in and the pressure that they will put on the utilities and on rate cases. And so I will be watching for sure, and it causes some concern, but I’m certainly glad there’s oversight by the public utility commission. So we’ll see how it all plays out. But we’re watching,

John Farrell:
You mentioned data centers. I’d love to ask you more about that. I know the legislature took some action last year to try to put at least some guardrails or boundaries up around data center development in Minnesota. There’s a multiplicity of issues here. Of course you have. One is just a small city’s worth of demand that can be added in one particular place, but you have the fact that they’re being developed by in general, these very large corporations that are used to cutting deals. You’re sort of suggested too, Minnesota Power, for example, has a lot of big industrial customers. They tend to negotiate these bilateral deals for what their rates are. Data centers are looking for that as well. Could you just summarize a little bit about what you already with the legislature did last year and then where you’re thinking there are still maybe holes in our policy solutions in terms of making sure that consumers are held harmless?

Patty Acomb:
Yeah, John, this has been a big issue in Minnesota and all around the country. And so what we attempted to do in 2025 in Minnesota was to say that if our state is going to be giving some tax breaks to these data centers, that we want to make sure there are some protections in place. And the protections we address in the legislation that we passed are protecting the hundred percent clean energy goals. And so the data centers, when they’re bringing new generation, they’re going to have to be complying with a hundred percent clean energy goals that we wanted to protect rate payers. So we want to, as I was saying earlier, it’s not fair for residential rate payers to be paying or footing the bill for these large corporations that need new generation and new transmission. And so the intent of that is to have the public utility commission set up a rate structure that will ensure that those data centers will pay for all of those things on their dime and it will not be relied on the residential or other commercial rate payers to pay those bills. So that was an important piece of it.

Patty Acomb:
And then also it’s important that because data centers need so much water and have an impact on our environment, that we had some environmental protections. So while we didn’t get as far in 2025 as I would’ve liked to go around environmental protections, we did put some restrictions or regulations in place to ensure that data centers are working with the Department of Natural Resources and not just with local cities trying to get water permits. And so we want the Department of Natural Resources involved to ensure wherever these data centers are being placed or cited, that there is an adequate water supply for the existing situation as well as into the future. And so having that relationship with the department to have conversations about how and where water is going to be utilized is an important piece that I feel good about getting.

Patty Acomb:
There are some other environmental pieces that I think we weren’t able to secure, and I will be continuing to focus on. I think environmental review for data centers is incredibly important because not only do they impact water, but it’s also air and noise. And so I think that the totality of environmental review will be important and the existing condition for environmental review for data centers is not adequate. Currently, they’re using oftentimes the AUAR. So the current condition is not being adequate. And in fact, we are seeing some of those data centers that had used this type of environmental review being challenged in court. And so I think just for the good of data centers and having the expectations that they need to do business in a state that if they know coming in here’s what they need, that’s going to be a whole lot easier for them. And we as a state deserve to be protecting our resources for now and into the future. I think some reasonable environmental review is something I will be continuing to work for.

John Farrell:
I’m curious if you saw, just last question, if you saw the Rewiring America report that was released in the last couple of weeks, it was really intriguing because what they suggested was, Hey, we have the loss of federal incentives for things like onsite solar for clean heat, air source heat pumps, geothermal and whatnot. And what they were arguing was data centers are coming in and they’re bringing lots of additional energy demand, and we could meet that demand with demand response like smart thermostats with solar and with battery storage and other electrification on consumer property. So they were saying essentially, we should tell data centers, you can buy your increased energy demand by helping households reduce their energy demand by essentially providing rebates or incentives. I thought that was really intriguing way of looking at how do you come into the system. I mean, I think obviously setting up the guardrails around you are only going to use clean power if you’re going to add more to the system, but I thought it was really intriguing the way they set up this opportunity of, oh, maybe data centers could actually help us reduce energy use in exchange for the energy they want to use.

Patty Acomb:
Well, I love that, and I haven’t heard that podcast, so you just gave me some homework to go and take a listen. So I will go and do that. But I think all of what you’re saying and describing makes great sense. And so I’m excited to go listen to that. Thanks for giving me the heads up.

John Farrell:
Absolutely. I don’t have any other questions for you, Patty. Was there anything else that you were hoping to come chat about?

Patty Acomb:
No, I’m just really excited to be here. I am grateful to you and the expertise that you bring towards the whole issue of renewable energy. So I appreciate you for having me, and thanks for all the good work you do.

John Farrell:
Thanks so much, Patty. Appreciate it.

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John Farrell:
Thanks for listening to one of my nine mini podcasts from the 2025 Gateway to Solar Conference with Minnesota Representative Patty Acomb. We’ll have links on the show page to my prior conversations with Annie Levenson-Falk and Brian Edstrom about the Minnesota Power takeover, as well as ILSR’s resources on community solar. Even these mini versions of Local Energy Rules are produced by myself and Ingrid Behrsin with editing provided by audio engineer Drew Birschbach. And as always, we’re talking about taking on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.