CUB recommends that the PUC and utilities combat inequities in “Economic Recovery” docket

Published October 28, 2020

In May of this year, the Minnesota Public Utilities Commission (“PUC”) opened a new docket (the “Economic Recovery” docket) with the goal of better understanding how regulated utilities can “assist in Minnesota’s economic recovery from the COVID-19 pandemic.” To that end, the PUC required all of Minnesota’s regulated gas and electric utilities to report existing or proposed initiatives that create jobs; utilize businesses owned by women, members of minority racial groups, or veterans; and meet certain other conditions established by the PUC. The PUC also opened a comment period allowing stakeholders to comment upon utilities’ reports, and to make recommendations as to how the PUC should address them. Such reports and comments are intended to help the PUC establish a process for accelerating regulatory review of utility initiatives likely to help spur economic recovery.

Utilities’ reports, which were filed over the summer, describe a variety of existing and ongoing projects occurring throughout the state, as well as several new investments and initiatives. Of note, Xcel filed comments proposing $3 billion in various investments – by far the largest proposed investments of any utility – ranging from funding additional energy conservation opportunities for low-income households to large investments in wind and solar projects. Minnesota Power also proposed significant new initiatives, including a $40 million investment to increase its solar capacity. Minnesota Power also proposed various activities that it says are intended to help maintain affordable energy rates in the wake of the pandemic and related recession.

CUB filed comments in the docket commending utilities for initiatives designed to reduce financial burdens on ratepayers while also highlighting the need to more proactively consider how the proposed investments help those most in need. It is clear that the pandemic has disproportionately impacted low-income Minnesotans and Minnesotans who are Black, Indigenous, and People of Color (“BIPOC”). This disparate impact widens deeply rooted inequities that existed long before the onset of COVID-19. In order for utilities’ economic recovery proposals to be most impactful on addressing current and historical economic challenges, our comments recommend that the PUC prioritize approval and/or acceleration of initiatives that have a clear, measurable, and positive impact on BIPOC and low-income Minnesotans. Likewise, we recommend that the PUC not approve or accelerate projects that are likely to reinforce or contribute to existing inequities.

Xcel, in particular – as the utility that has proposed the most significant investments – has an opportunity to lead by example in proactively ensuring that its proposals account for and directly address racial and economic disparities made worse by the pandemic. Doing so would be consistent with commitments Xcel CEO, Ben Fowke, has made in statements to industry leaders, Xcel investors, and Minnesota residents. For example, we believe it is important to hold Xcel accountable for following through on comments Mr. Fowke made in a recent shareholder presentation while discussing his goals as the newly elected Board Chairman of the influential Edison Electric Institute (“EEI”):

I've asked EEI to focus on what our industry can do to promote racial justice and increasing our commitment to advance diversity and inclusion. Like our country, our entire industry has been shaken by the death of George Floyd. Mr. Floyd died only a few miles from our corporate headquarters, and Minneapolis was the first city to experience widespread protest and rioting. I think, as a society, we have a lot of work to do. We need to look hard at ourselves, our unconscious biases and our business practices. I asked some hard questions about how we can improve our diversity. I'm confident that Xcel Energy can play a leadership role in driving positive change for our country and our communities.

We are encouraged to see that several others filing comments in this docket share similar concerns. In particular, a group of more than 20 groups that advocate for environmental justice and clean energy filed a letter stressing the importance of addressing historical and present inequities through economic recovery investments. We look forward to contributing further to this important discussion, where we will continue to advocate on behalf of all Minnesotans to help ensure equal access to clean, reliable, and affordable energy.