November, 8 2020
Mike Hughlett
Minnesota utility regulators made an unusual call this spring.
They asked the state’s electric and gas utilities to pitch investments that could help jump-start the state’s economy, which has been hit hard by the coronavirus pandemic. Xcel Energy responded with a multibillion-dollar plan that it said could create 3,000 jobs.
Now, there’s debate over how much of Xcel’s proposal is needed — at least in the short term — and whether it could overwhelm ratepayers.
Plus, the state Attorney General’s Office and Department of Commerce, while generally supporting the initiative, have raised questions about utility regulators’ ability to effectively measure economic-stimulus plans.
The desire to bolster Minnesota’s economy is “commendable,” Minnesota Attorney General Keith Ellison’s office said in a regulatory filing. But the Public Utilities Commission (PUC) “now finds itself in uncharted waters.”
Ellison’s office noted the “tension” between the PUC’s call for an economic catalyst and its duties in approving utility rates.
“The commission is expert at regulating utility service, but it lacks similar experience with the macroeconomic questions that a statewide economic-recovery effort would entail,” the Attorney General’s Office said in a filing.
It also said the state’s residential ratepayers are already “struggling both with the recession and rising utility rates.”
The Commerce Department similarly said the PUC’s expertise is not in “the ability of a project to stimulate economic development.”
The PUC’s main role is to ensure reliable service and protect Minnesota ratepayers — who ultimately fund most utility investments.
“Impacts on rates will be very carefully scrutinized,” said Katie Sieben, chairwoman of the PUC. “It is important to keep in mind that right now these are proposals and they will be scrutinized by the commission to see if they are in ratepayers’ best interests.”
Most Minnesota electric and gas utilities submitted rather modest plans to the PUC, but Xcel proposed $3 billion for a cornucopia of accelerated investments, a number that has since been whittled to about $2.5 billion.
How exactly all that would be paid for isn’t clear.
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