State Should Seize Chance to Exploit an Asset – its Wind
by David Morris
Institute for Local Self-Reliance
January 12, 1999 – published in St. Paul Pioneer Press
Dear Jesse,
In the next few days a decision will be made by the executive branch in your name, or more precisely in the name of the people of Minnesota, that may prove as significant as any decision made by the legislature this year.
The agency is the Public Utilities Commission, a body over which you have significant influence. You appoint its Chair, and by the end of your term you will appoint a majority of its members.
The decision is whether Minnesota will continue to aggressively harness our enormous wind power resource.
Here’s the background. Minnesota is a very windy place, as any Minnesotan knows very well. What they may not know is that Minnesota has sufficient high speed winds that wind turbines installed on only one percent of our land could generate 17 times more electricity than we presently consume. This potential has led some to dub us the Saudi Arabia of wind.
Four years ago the legislature took steps to harness this enormous resource. The context was a vigorous and highly emotional debate about the future role of nuclear power in Minnesota. The result of that debate was a legislative decision to allow the two nuclear reactors at Prairie Island to continue to generate radioactive waste for as much as ten years, even though no long term storage facilities are available for this waste. But in return, Northern States Power would have to aggressively expand Minnesota’s use of renewable electricity. To achieve this goal, the legislature ordered NSP to purchase 425 megawatts of wind electricity, enough to power about 120,000 homes, and an additional 400 megawatts if it were deemed in the public interest to do so.
Since the Prairie Island legislation, the price of wind electricity has steadily declined. The cost to Minnesota households of the initial 425 MW of wind will be about $1 per month.
This week the PUC may decide whether NSP must expand its wind program. The legislative preference is clear. “To the maximum reasonable extent, the commission shall set rates to encourage energy conservation and renewable energy use…”. And even more explicitly, the “commission shall not approve a new or refurbished nonrenewable energy facility…unless the utility has demonstrated that a renewable energy facility is not in the public interest”.
In making its decision, the PUC will have to define what it means by the words “reasonable” and “public interest”. It could conclude that they simply meaning getting the lowest possible short term price. But if that were what the legislature meant one would think it would have used those words. In any case, the price difference to the typical Minnesota household is trivial no matter whose estimates one uses.
Under NSP’s worst case scenario a typical household would have to pay about about two cents a day more if the electricity is generated by wind rather than by fossil fuels. Under equally plausible scenarios offered by the Attorney General’s office and the Izaak Walton League, a household would pay about a penny a day less if wind power were used.
Such modest price impacts should lead the PUC to take into account other aspects of the public interest. For example, it should consider renewable energy’s overwhelmingly popularity. Surveys undertaken by utilities inside and outside of Minnesota find that the majority of their customers are willing to pay more for fuels that do not pollute the air or water.
The PUC should also take into account Minnesotans desire for self-reliance. We prefer to rely on homegrown resources rather than on imported fuels.
The PUC should take into account the economic impact of wind power versus fossil fueled power plants. A decision to expand wind power could channel half a billion dollars of additional investment into Minnesota. Harnessing a homegrown resource means generating homegrown jobs and tax dollars. And wind power brings financial benefits to many hard-pressed farmers in western Minnesota?
The decision should be easy. Wind power is cost-competitive, environmentally benign, popular and a potential economic boon to rural Minnesota. That makes it in the public interest.
Sincerely,
David Morris
