Leaked Draft Bill Confirms Xcel Energy’s Priority For Profits Over Community Solar

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Originally published at ilsr.org.

While a bill drafted by Xcel Energy that would give them a blank check for fixing up a nearby nuclear power plant makes its way through the Minnesota Legislature, the monopoly utility is looking at other ways to benefit shareholders.

Lobbyists from Xcel are testing behind-the-scenes strategies that reveal what really drives the utility company’s decision-making, and it’s not benefiting its customers.

Xcel’s top priority — and legal obligation — is maximizing profits for shareholders, even if that comes at the expense of customers and the country’s most successful community solar program, as a new parody video, released today by the Institute for Local Self-Reliance and Community Power, reveals.

Supported by evidence from the text of a draft bill distributed by Xcel that would amend Minnesota’s renewable energy program, this video highlights how the utility is exploring ways to limit competition from small-scale, distributed energy and access to that technology by renters, those with low income, or those with shady rooftops who rely on and may not otherwise have access to owning their own solar panels.

A Closer Look at Xcel’s Proposal to Gut Community Solar

Notably, the draft text proposes to amend a wide range of policies that are currently enabling community solar programs in Minnesota to thrive, from appropriations for solar energy to regulations that oversee the state’s public utilities.

The text brazenly outlines a Renewable Energy Credit give-away to the utility, provides the basis to count, for the first time, a customer’s community solar garden subscription toward the utility’s mandated small-scale solar energy standard, and seeks to establish an arbitrary standard for treating community solar gardens on adjacent land as one regardless of ownership. (See the embedded and annotated draft bill language for more detail).

Cutting Out Low-Income Folks

Xcel would also reduce the ability of Minnesota’s regulatory watchdog agency to provide important assistance to support low-income communities’ access to renewable energy.

For example, it proposes that the Public Utilities Commission “shall not require the utilty [sic] to add any amount, including but not limited to incentives, subsidies, and adders to the alternative tariff.” (The alternative tariff is the fancy name for the compensation paid to community solar subscribers). Basically, this change hamstrings current efforts by the Commission to raise reasonable and necessary funds that level the playing field and allow more low-income participation in community solar.

Freezing the Value of Solar

The draft language cuts out a key phrase the legislature added to give the Commission power to include other factors in the state’s landmark value of solar calculation. Without it, Xcel can whittle down what it pays to non-utility solar owners.

Undercutting the Entire Program

Further, seemingly innocuous changes to language that are proposed for the state’s community solar garden statute in this bill would likely have bigger consequences than first meets the eye.

Xcel would have part of this policy read, “allow for the creation and accessibility of community solar gardens at a reasonable cost to customers of the utility,” instead of, “reasonably allow for the creation, financing, and accessibility of community solar gardens.” By removing the word “financing” and replacing “reasonably” with “at a reasonable cost to customers of the utility,” Xcel creates a loophole that would enable it to continue fighting competition on the basis of short-term cost arguments, instead of supporting the long-term community benefits provided by distributed energy and community solar.

A Habit of Making Its Own Rules

So, how would this bill that guts a hugely popular community solar program have a shot? Xcel Energy’s massive lobbying presence at the Minnesota Legislature. In 2017, Xcel Energy had legislation that similarly sidestepped Minnesota’s consumer watchdog Public Utilities Commission for a new gas power plant, at a cost of $1 billion or more to customers. The company also threatened legal action for a similar parody video.

The lesson is that public oversight of shareholder-controlled utilities is tenuous at best because these massive companies have the power to rewrite the rules. In the Southeast, utility lobbying power led to laws enabling a $40 billion “bonfire of risky spending,” with utility customers left holding the bag.

State lawmakers should shut down Xcel’s attempt to regulate itself by dumping the utility’s bills. If the legislature cares about accountability, it would do better to provide customers choices by strengthening the hand of cities to form their own utilities or providing competition as a powerful tool to let Minnesotans hold their monopolies accountable.

Additional Resources

For more information from our partners at Community Power about how to take action, visit communitypowermn.org.

Follow along and engage in the conversation on social media with the hashtags: #XcelTruth and #XcelMoneyGrab

For timely updates, follow John Farrell or Marie Donahue on Twitter or get the Energy Democracy weekly update.

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John Farrell

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

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