North Dakota To Minnesota: Pay For Your Own Green Energy Mandate

Skirmeshes over energy policy between North Dakota and Minnesota are nothing new. North Dakota, in fact, has sued Minnesota over green energy policy that precludes importing coal-fired power from North Dakota, something the western state feels violates the interstate commerce clause.

Now the North Dakota Public Service Commission has entered the fray, refusing to allow Xcel Energy to hit North Dakota energy customers with a rate increase justified by Minnesota’s green energy mandate.

North Dakota is pretty much telling Minnesota to pay for their own green energy:

A revolutionary settlement between the state of North Dakota and Xcel Energy’s Northern States Power unit will save North Dakota ratepayers nearly $6 million a year by exempting charges for higher-priced renewable energy from Minnesota.

“It is no secret that Minnesota rules, laws and policies are highly influenced by various environmental groups and ideas,” Mike Diller, director of economic regulation for the N.D. Public Service Commission said during a hearing in January. “… The environmental concerns of North Dakota are different than those of Minnesota, and the cost of compliance with the environmental and energy policies in Minnesota is becoming a burden to North Dakota ratepayers.”

North Dakota sets a voluntary goal of generating 10 percent of its power from renewable sources, ranking third on the American Wind Energy Association list of states in percentage of wind power. Across the border, Minnesota requires 31.5 percent of Xcel Energy’s power be generated by wind and other subsidized — often less competitive — renewable energy sources by 2020.

“This has not been the approach in North Dakota,” said Julie Fedorchak, a PSC commissioner. “Policy makers in our state believe it should be driven not by state mandates and government mandates, but more by the private sector and technological growth.”

In the past the PSC has allowed Xcel Energy to increase North Dakota utility costs because of expensive green energy investments mandated by Minnesota’s laws. For Xcel’s roughly 80,000 North Dakota customers that has meant an extra $5.7 million per year. Which means, in turn, that Minnesota power customers haven’t been paying full freight for their state’s green energy policies.

The PSC is now requiring Xcel to “re-stack” the energy they’re selling to North Dakotans, focusing on lower-cost power as opposed to higher-cost power of the sort that comes from sources like wind turbines. They have until July of 2015 to get approval for a new mix from the PSC. If they don’t, and if Minnesota regulators don’t agree to price hikes to pay for the green energy projects, Xcel could be stuck between a rock and a hard place.

Oh, and North Dakota regulators would like Minnesota to know that we don’t want any of their solar power, either:

What about North Dakotans paying for their neighbor’s latest renewable energy mandate — solar?

“Solar’s coming in and I can tell you right now that our position in North Dakota will be we’re not interested in that 150 megawatts of solar power they’re building over there,” said Diller.

Indeed.

The PSC hasn’t always been quite so vigilant on this front, however. Back in 2011 the PSC voted 2-1 (Commissioners Brian Kalk and Tony Clark voted yes, Commissioner and now Congressman Kevin Cramer was the lone no vote) to allow Montana-Dakota Utilities to hit North Dakota power customers with a rate increase to pay for Montana’s green energy policies.

“I suspect the inclusion of the Montana wind farm in this rate case is simply a symptom of the regulatory rut that tradition sometimes creates,” said Cramer at the time in a statement explaining his dissenting vote. “The political climate today with so many parochial laws and trends threatens the very point of integrated resource planning and low cost energy development. If companies are required to meet such specific demands imposed by certain jurisdictions, then it should be the constituents of those jurisdictions that bear the cost.”

The PSC’s approval allowed MDU’s roughly 75,000 electricity customers in North Dakota pay $7.6 million in new fees.