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Ratepayers, Large and Small, Oppose Xcel Energy Legislation to Bypass Regulatory Process for New Natural Gas Plant

For Immediate Release:

Cathy Kennedy, Cathryn Kennedy Consulting, 612-309-3951
Pam McCarthy-Kern, Cathryn Kennedy Consulting, 612-360-0647

Ratepayers will be stuck paying for the $1 billion plant, opponents say

Bill before House committee at 3 p.m. today

St. Paul (January 17, 2017) – Advocates for consumers and businesses are speaking up today against legislation that pre-approves what could be a billion-dollar gas plant for Xcel Energy, arguing that it harms ratepayers who will be stuck paying for the plant.

The bills, (HF 113/SF 85), authored by Rep. Jim Newberger (GOP – Becker) and Sen. Andrew Mathews (GOP – Milaca), would effectively allow a bypass of Minnesota Public Utilities Commission, giving Xcel carte blanche authority to determine the size, type, timing, and location of an Xcel-owned natural gas plant in Sherburne County. The bills also mandate that Commission grant approval of Xcel’s plan to recover its costs, regardless of what that would entail. The first bill hearing is scheduled for 3 p.m. today before the House Committee on Job Growth and Energy Affordability Policy and Finance.

Residential Consumers Concern

Annie Levenson-Falk, Executive Director of the Citizens Utilities Board, which advocates for residential consumers, says the bills are unprecedented. “Instead of following a long-standing process to determine the most cost-effective way to provide energy, Xcel’s lobbyists are coming to the Capitol to ensure a profit. The costs, plus the company’s rate of return, will be paid by its captive customers.”

Large Business Opposition

Drew Moratzka, a partner at the law firm of Stoel Rives LLP who represents the Minnesota Large Industrial Group, an ad hoc coalition of large industrial consumers of energy that consumes in excess of 6.5 billion kWh annually and pays in excess of $350 million annually for electric energy, says that the Commission process is what helps keep rates competitive for businesses, large and small, and should be followed.

“When multiple companies compete to build new energy resources, as is contemplated in the Public Utilities Commission’s recent resource plan order, that competition helps drive down costs of the additional resources.  These bills create an end-run around that process for a monopoly and eliminates any incentive to control costs, which would ultimately be passed on to all ratepayers, large and small.  Furthermore, passage of this bill would establish troublesome precedent for other Minnesota utility monopolies who could consider similar legislation to support the transition of their respective generating fleets.

“Bottom line: State government should not be in the business of picking monopolies as winners and the general/ratepayer public as losers.  Unfortunately, that is precisely what these bills do.”


Author: Annie Levenson-Falk

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