Minnesota sets out for zero-carbon electricity by 2040

A newly signed state law sets Minnesota on course to use 100 percent carbon-free electricity by 2040. In this episode, Minnesota House Majority Leader Jamie Long describes the decisive legislating that took an ambitious climate bill from introduction to the governor’s desk in the space of one month.

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David Roberts

Back in 2019, I wrote for Vox that there is one weird trick states can use to ensure good climate and energy policy. That trick is: giving Democrats full control of the government. It has worked in California, Washington, Oregon, Colorado, Illinois, New Mexico, Massachusetts, New York, Hawaii — the list goes on.

As I covered in a pod a few months ago, the 2022 midterm elections brought Democrats full control — with trifectas of both houses of the legislature and the governor's office — in four new M states: Maryland, Massachusetts, Michigan, and Minnesota.

Does the one weird trick still work? Well, you’ll never guess what happened in Minnesota last week.

Gov. Tim Walz signed into law a historic piece of legislation that would set the state on a course to carbon-free electricity: 80 percent by 2030, 90 percent by 2035, and 100 percent by 2040.

My guest today is the bill’s primary author and sponsor, Minnesota House Majority Leader Jamie Long. Long, formerly legislative director for then–U.S. Rep. Keith Ellison (D-Minn.), was elected to the Minnesota legislature in 2018 and became majority leader this year. He worked closely with Senate sponsor Nick Frentz to shepherd the bill quickly through the legislature, with no extended conference committee.

It was an adept and decisive bit of legislating — not necessarily the norm for Democrats. I was excited to talk to Long about some of the ins and outs of the bill, the forces that supported and opposed it, and what's next for Minnesota energy policy.

All right, then. Representative Jamie Long of Minnesota, welcome to Volts. Thanks so much for coming. And I guess the first thing I should say is congratulations.

Jamie Long

Thank you. It's a big month out here in Minnesota.

David Roberts

Yeah, big news. I want to get into the actual bill and the actual targets and everything, but just let's do a brief bit of history to start with. You arrived in the Minnesota legislature in 2018. I'm curious when this bill was born, basically, how long has this been cooking?

Jamie Long

Sure. Well, this was my top-priority bill from my very first day I ran for office wanting to work on climate change and clean energy, and knew that 100% clean energy was the big bill that I wanted to focus my efforts on. So, we introduced this pretty early in my very first year in office. So actually, when we had the bill signing, I was looking back, and it was about four years to the week from when we had a bill signing that I'd introduced it. So, that was the first time we'd had 100% clean energy proposal in Minnesota, but we certainly had a lot of other renewable energy standards that had been tried and had failed over the years. The last time we'd updated our renewable energy standard was 2007 in the state.

David Roberts

2007. And that was, I'm guessing, the last time you had Democratic control over both Houses?

Jamie Long

No, in fact, it was broadly bipartisan. It was signed by Governor Tim Pawlenty, Republican governor, who later it became a political issue when he ran for President because the Republican primary voters were not that happy that he was a clean energy leader who took climate change seriously. But it got such broad bipartisan support, it was almost unanimous in the House and Senate at the time.

David Roberts

Wild.

Jamie Long

And that was 25% renewable energy standard by 2025 was what was passed at that time. That seemed really ambitious, but we actually met that in 2017, so we met it eight years early.

So, at the time it seemed like it was going to be a big deal.

David Roberts

If only we would ever learn from experience.

Jamie Long

I know, right?

David Roberts

That's the same story with every single one of these that's ever passed anywhere.

Jamie Long

That's right. But we do have only the second trifecta in the last 30 years in the state. We did have one in 2013, 2014. We didn't update the renewable energy standard then, but we did do some other good climate policy. But yes, unfortunately, since 2007, climate and clean energy has taken a turn for partisanship in the state. And so it has taken until we got this trifecta, and we have it barely in the Senate. This will sound familiar to the congressional story, but we have a one vote margin in the Senate, and we have a two vote margin in the House.

David Roberts

Crazy. And this was pretty rapid and decisive. Like, you guys have not been in office for that for that long.

Jamie Long

You got it. Signed within a month.

David Roberts

That's unusual to see the Democratic Party acting with such alacrity and clarity of purpose. I don't know what's going on here.

Jamie Long

Well, we felt like we heard loud and clear from Minnesota voters that this is what they wanted. There was a poll in our local paper right before the election asking voters what were their top issues for deciding on the candidates that they wanted to support. And climate was a top five issue.

David Roberts

No kidding.

Jamie Long

Our governor, Tim Walz, has been a strong supporter of 100% clean energy since day one. He was at our very first press conference with us four years ago, and he ran on this this past election cycle for his re-election, it was in his first ad. He was one of those Democrats back in the Waxman-Markey days who voted for Waxman-Markey and thought it might have cost him his seat, and it didn't. But he's always been very proud of his climate leadership and has been a really strong leader in our state.

David Roberts

So, I want to talk about some of the issues of contention, let's say in a minute, but let's just start by talking about what's in the bill. So, there's two targets for the state utilities. There's a renewable energy target and then there's a zero carbon target. So, tell us just briefly, like why are there two and what are they?

Jamie Long

Well, we wanted to have a renewable energy baseline. That was important for a lot of our partners and constituency groups that we were working with. We do have nuclear energy in the state, there are three nuclear plants, all owned by Xcel Energy. So, this wasn't really relevant for most utilities, but we wanted to have a baseline for renewable energy. So, there's a 55% renewable energy standard by 2035. But the big numbers are the clean energy standards or carbon-free energy standards and those are 80% by 2030, 90% by 2035 and 100% by 2040.

David Roberts

Got it. So, the renewable energy target is just an extension of the previous law? Yes, it's just sort of an updating of the previous renewable energy law or does it change anything substantially from that law?

Jamie Long

Well, it updates the previous law. So as I'd mentioned, our current law has 25% by 2025 and everybody's gotten there, so there's no real story there. So we have 55% now by 2035. We did update it some. The renewable energy definition at that time had a couple of things that we tweaked. One was that it constrained hydro to only small hydro. And the thought had been at that time that there was some concern that if we did large hydro we would basically push out all of the wind and solar. We would just go towards large hydro or we have access to Manitoba Hydro here and some other large hydro projects.

And so the concern was that you wouldn't get the solar and wind development that we would want. That's less of a concern now. We aren't seeing a lot more large hydro projects being built. And particularly on the timeline that we're talking about, between now and 2035, you're not really going to get a new large dam sided and constructed. So, the question was just really, were we going to let that count for utilities that are already purchasing large hydro? And we thought that would be fair. And then the other discussion was around waste energy. And so we have a facility in my city of Minneapolis that is located next to the neighborhood that has the highest black population in the city, and also happens to have the highest asthma rates in the state, there's a lot of cumulative impacts with different industrial uses in that particular neighborhood. And so we excluded that particular facility from the definition of renewable energy.

David Roberts

That's Hennepin?

Jamie Long

Yeah, the Hennepin Energy Recovery Center is what it's known as. So we excluded that as a gesture to the community and to the county that we understand this is a facility that we don't want to see be the long term solution to our waste problems in that particular location.

David Roberts

I'd like to pick up both of those a little bit. On the hydro, my understanding is that this was a subject of some contention, I mean, one is what if we just get more hydro and don't do any wind or solar, as you say, that's probably not as much of a concern. Now, although, I'm curious, you're accessing this Manitoba Hydro, could you theoretically just buy more of existing Manitoba Hydro? I'm curious, have you topped out how much you can get from there?

Jamie Long

Yeah, it's pretty well topped out. It's all spoken for between Manitoba and Minnesota. So last year there were lower water levels in Manitoba and they wound up being able to ship a little less power to Minnesota because they had to use it all from Manitoba. So both with the existing transmission and the existing need, there's no real extra capacity.

David Roberts

Bringing on any substantial new big hydro from Minnesota would mean building new dams.

Jamie Long

Yeah, and it would take longer than the time allotted.

David Roberts

I know there are sort of concerns about the pipeline from those Manitoba, the electricity lines from those Manitoba dams down to Minnesota. How did that play out? Because my understanding is that environmental groups, the reason they didn't want big hydro counted is partially because they don't want more of that. How did that sort of controversy play out?

Jamie Long

Yeah, there were some concerns from some indigenous environmental groups around large hydro. And so that was one of the reasons why we made clear it was only existing hydro. So we didn't allow for new hydro to count towards that renewable energy standard, so that we would foreclose the possibility that new construction would be eligible. So in the law, it says only as of the effective date of the act, those facilities would count.

David Roberts

I see. So even if they did build new dams.

Jamie Long

It doesn't count towards renewable energy standard. It would count towards carbon-free because we don't have technology limitations there. It's anything that's carbon-free. But for the renewable energy standard, it wouldn't count.

David Roberts

Give us a sense of where non hydro renewable energy is in Minnesota. Are the big Minnesota utilities in shouting distance of that 55% target?

Jamie Long

They are. So last year in Minnesota, we were at 52% carbon-free for the entirety of Minnesota's power generation. Now 24% of that was nuclear. So about a quarter of our power in the state's nuclear, but 28% was renewable energy. So that's pretty good. And then if you look at it based on, by utility, there is a bit of a differentiation. Minnesota Power, for example, which is the utility that services the northern part of the state, they're pretty unique because they serve some really large customers. Mines, timber. They were at 90% or so coal in the 1990s, and then as of even 2015, we're at about 75% coal. And now they're over 50% renewable.

David Roberts

Oh, wow. So they've been moving pretty quick already.

Jamie Long

They've been moving very quick already. And so we've had some good leadership from utilities in the state. Xcel Energy, our largest utility, was the first in the nation to say that they wanted to move towards 100% carbon-free electricity. And then both Minnesota Power and Great River Energy, which is our generation and transmission cooperative for most of our rural electric co-ops in the state, have also committed to carbon-free. Now, all three of those had 2050 as their target dates, so we're pushing them considerably faster than they had wanted to go, but they had set the direction that they were going to move towards carbon-free electricity, and all three of them, in the end, were supportive or neutral on the final bill. So I do give them credit for setting a direction and being willing to come along even as they were being pushed.

David Roberts

Just to clarify sort of the goals that they had set for themselves, that was all internally driven, that wasn't in response to any sort of mandates or government product.

Jamie Long

Those were public announcements. And so even before the law had passed, something like 80% of Minnesota customers were already being served by a utility that had themselves, on their own, committed to decarbonizing their electric service.

David Roberts

So this is mostly accelerating what your big state utilities are in the midst of doing already.

Jamie Long

Accelerating and mandating, which is an important distinction. But they had made these targets on their own and they weren't binding. You know, Xcel Energy at different points in time had described it as an ambition or a goal or, you know, there was a lot of flexibility in terms of how they described it and now there is not.

David Roberts

Now there's locked in. Let's talk a little bit about garbage incineration because this sort of like only comes up in some states and not in others, and I've had questions about it over the years and I've never really bothered to poke around and learn a lot about it. But my understanding is two things: one is that the main reason municipalities are doing this is not for energy. It's that they don't know what else to do with their trash. They don't have anything else to do with their trash. And my understanding is that environmental groups are largely opposed to it and would have preferred to exclude it from the zero carbon energy standard entirely.

So tell us a little bit about, just sort of like, what are the dynamics or how did that play out?

Jamie Long

So it's this interesting interplay between waste policy and energy policy, right?

David Roberts

Right.

Jamie Long

So I think most folks agree that landfilling isn't a good outcome for our waste management system. And there's disagreement though, on how much we can do in recycling and composting, and other forms of waste diversion. Environmentalists like me tend to think that we can do a lot more than we're doing. Pushing hard at the state level to do more in the recycling and organics management side. But a lot of counties in our state have moved forward with waste burning as what they view as better than landfilling. So not the outcome that they want, but better than landfilling.

You still do have to landfill though. You're landfilling all the ash that's coming out, and the ash is toxic, and you're producing localized air pollution when you're burning it. So it's certainly not an environmentally friendly solution, but nor are landfills. And so there aren't easy choices here. But when it comes to the energy space, when we're thinking about moving towards a decarbonized electric sector, when you're burning trash, it produces carbon. So right now the waste energy, at least for our 100% target, doesn't count as a fully decarbonized source. We have a few pathways that counties could pursue which I can get into if you're interested in terms of how they could continue to operate.

But they are, under our bill, either going to have to change or pay a little bit more money in a renewable energy credit to be able to continue to operate. And so it will make waste to energy harder, as a long term solution.

David Roberts

I don't want to get too deep into incineration here, but when you say improvements that they could make, does that mean there are safer and better ways to incinerate trash, or do you mean alternatives?

Jamie Long

Well, so under the bill, if you are not at 100% carbon-free electricity, one option you have is to purchase renewable energy credits.

David Roberts

Right.

Jamie Long

And this is a pretty common way to account for that sort of last couple of percent in different standards, and it was also in our previous renewable energy standards that we've had.

David Roberts

Yeah, I want to get into that later.

Jamie Long

Yeah, so that would be one option that they could pursue. They could shut down the facilities, they could not sell the power to a utility. Because we're regulating the sales to utility customers in the bill. So there are a few options, but I do hope that this will prompt some conversation in our counties about how they want to manage waste 16 years from now. I feel like there's a lot of time to figure out better alternatives than burning.

David Roberts

It's not super clear to me what the ideal state of the art is here. But yeah, like you say, there's time to figure that out. What about within the bill? Is there anything specifically for distributed solar or distributed energy? That's one of the things I heard back from some sort of state advocates is that the big utilities are fine going renewable, but they're more resistant to losing control over assets and having customer owned assets. So I wonder, is there anything, is that mentioned in the bill at all?

Jamie Long

No, we don't have a specific carve out for distributed energy. We wanted to keep our technology neutral approach intact. As you might imagine, there were lots of different requests for specific technologies.

David Roberts

Interesting.

Jamie Long

Most of those didn't go in the direction that I would call climate friendly. So we tried to keep the overall integrity of allowing for utilities to have some flexibility in how they are getting to 100% carbon-free in the bill. Now, that said, I do believe that there's going to be an awful lot more distributed energy built because of this bill. The utilities are going to need to find as much solar and wind as they can, and it's not all going to be able to be utility scale.

So I think a lot of it will be distribution grid, interconnected. But I think that a lot of that conversation is probably going to take place in other contexts later this session. So we are one month in to our legislative session, and we've been talking for a long time about our community solar program. We have the largest, I guess now second largest New York just passed us, but for a long time we have the largest community solar program in the nation. There's a lot of conversation on what to do in the distributed energy space with interconnection. I think that's going to be a hot topic in session and there's going to be a lot of interest on policy fixes in that space.

But for the purposes of the 100% clean energy bill, we felt it was important to keep flexibility for utilities and how to meet their targets.

David Roberts

Interesting. One other question about sources. I know anytime I mention energy policy on the internet, which is frequently, I get the question, well, what about nuclear? Is it nuclear just better? Why don't we just do nuclear, blah, blah, blah. You knew this was coming. So in Minnesota, you've got three nuclear plants, yes? Who are providing 25% of your power and a good chunk of existing low or no carbon, carbon-free energy. And that counts toward the standard, that energy counts toward the, the carbon-free standard for 2040. But there is also alongside that, a prohibition on new nuclear in Minnesota.

And I know there was some argument on some quarters that the prohibition should be lifted, that small modular nukes should be allowed under this technology neutral standard. The bill didn't get into that. What's the status there?

Jamie Long

Yeah, so nuclear politics is obviously complicated, not just in Minnesota. But you're right, we have three nuclear plants in the state and we have a moratorium on new nuclear plant construction.

David Roberts

And that was a bill that was legislative from previous.

Jamie Long

The 90s. It dates way back. It's not a recent choice. And the reason is that we have the closest community living near a nuclear plant anywhere in the United States, and that's the Prairie Island Indian Community, which lives like a stone throw from the Prairie Island Nuclear Plant. And so it's in their backyard, right behind their houses. And so the Prairie Indian Community has had long standing concerns about the onsite nuclear waste storage, because we don't have any long term storage solution yet for nuclear waste. And so that waste happens to be stored right on site at the Prairie Island Nuclear Plant.

And so when they were seeking permitting to store that waste on site, the compromise that was passed included a moratorium on new nuclear construction. So that's the history. The tribe remains concerned to this day about living that close to a nuclear energy plant in their community. So removing the nuclear moratorium is fraught. And there's also, I didn't have a single large utility come to me and say, "Hey, I'm ready to build a small nuclear modular reactor and I want this repealed so I can get this going".

David Roberts

Yes, this discussion is extremely theoretical at all levels.

Jamie Long

Yeah, exactly. That may be a topic of conversation that comes to the state in the future, but it didn't need to be solved in this bill because there is no real live proposal before us. All three of the nuclear reactors in the state are going through relicensing applications with the NRC. They're all at the end of their licenses or nearing them. And so that's the kind of active conversation.

David Roberts

Yeah, are you talking about several states have taken action recently to extend the life of existing nuclear plants, is that on the table or in the discussion somewhere?

Jamie Long

No, we don't really need to subsidize our nuclear plants in the state. They've been operating within competitive rates and we're regulated state, we're not deregulated. I think some of the states that have had to support their nuclear plants because they're deregulated.

David Roberts

Right.

Jamie Long

But I think there is broad support for relicensing for those three facilities. The tribe that I mentioned is in active negotiations with the utility about waste storage next to them in a relicensing application. So there may be discussions there, but I think that there is general support for extending the life of those three plants and nothing more. We really need to do with the legislature on that. But in terms of new small modular nuclear reactors, there's no real active proposals or need to solve those problems this month.

David Roberts

Let's talk a little bit about utilities and their sort of disposition towards all this. Let's start a little bit, I think with munis and co-ops, municipal and cooperative utilities. I think, probably, most folks listeners live in cities and are served by big utilities and so might not be familiar with what these things are and why they tend to be resistant to the net zero push. This is not just in your state but in many states. So maybe you could just explain sort of like, what are these little utilities and why across the country do they tend to be centers of resistance to the push to clean power?

Jamie Long

Great question. So municipal utilities are pretty straightforward. It's a utility that's run by municipality or at the municipal level to supply power. And they tend to be more of a distribution utility. They're often purchasing their power from somebody else.

David Roberts

They're just not big enough to own assets on their own.

Jamie Long

Most of them don't. Yeah, there are a couple of municipal utilities in the state that do own some of their own generation, but most of the time they're purchasing the power that they sell. And then cooperative utilities are managed by local boards that are elected and they tend to be in rural communities. That's the history. It was part of the ability to get electrification to rural America, right? And the big utilities serve the cities and there needed to be a model that helped serve rural communities and so cooperatives was a model that took off. But in Minnesota it's 40% of customers or cooperative utilities or municipal utilities.

So it's a big chunk. And if we're only focusing on our three investor owned utilities in the state, we're leaving out a lot of folks who have power delivery. So the cooperative utilities are very diverse in terms of their customer size, their location in the state. So we have some that now, once were rural, but now serve kind of a suburban membership, and then we have some that serve very small rural memberships. A lot of them tend to purchase power from these generation and transmission cooperatives. And so there's a handful of those that make the bulk of the decisions that then trickle down to the co-op.

So I mentioned Great River Energy, in our state is the largest, and so it's complex. And in terms of why they resist, well, there's a couple of reasons. One is that they have tended to not have necessarily the same pressures to move as quickly as some of the investor owned, I think Xcel Energy, Minnesota Power, those are publicly traded companies. They've got a lot of folks who are looking at their future and what might be their risks. And for Xcel, I think part of the reason they went first on saying they wanted to be the first utility to get to 100% was to get noticed, right, to make a mark on the national stage that they were a leading utility.

The boards of a lot of these local co-ops don't tend to be electricity experts. They're community members, right? They're folks who live in their communities and care about.

David Roberts

And we should say, I'll say it if you won't, rural and therefore likely quite conservative.

Jamie Long

Yes, that's right. And so their understanding of the most up to date energy policy is sometimes a little dated. So I've met often with rural cooperative boards in our state and I even have brought graphs of the cost of solar and wind over time and showed them,"Look, it's cheaper! It's cheaper". And the feedback I'll sometimes get is, "Well, it's not reliable", right? There's always kind of something else. So there has been traditionally a lot of resistance at that level. But I'll give credit to some of the large G&Ts that work with the co-ops. They've understood that moving towards renewable energy is going to save their members money.

So Great River Energy had a very large coal plant that it sold, that wasn't located in North Dakota, and it lost $170 million at that coal plant in 2019. They tried to sell that coal plant for a dollar and couldn't find anybody who would take it. So they wound up having to sell it with a very valuable high voltage transmission line, which probably down the road is going to carry mostly wind power from North Dakota to Minnesota. And by selling it, they projected that they would cut rates for their member co-ops by over 10%.

David Roberts

Wow.

Jamie Long

So, the economics are really driving a lot of the transition now for some of these rural co-ops, too. But they tend to be resistant to mandates and requirements.

David Roberts

So, I was going to ask how you brought them around, but it occurs to me that maybe you just didn't and didn't have to. Did they come around?

Jamie Long

So, the municipal utilities did not. They were the last holdouts. Every other utility association or utility in the state wound up being neutral or supportive. But the municipal utilities.

Interesting.

Were not, and in part they have local politicians who are involved in those discussions, and those tend to be from rural communities, and so you can connect the dots. For the rural cooperatives, to their credit, they came to the table. They have a very diverse membership, as I said, and there were a lot of pressure on that group. But they had one reasonable ask, which was, a lot of our co-ops are starting behind where these large utilities are. They don't have nuclear power, they don't have access necessarily to the same level of hydro as say, Minnesota Power in the north. So, they're behind. And so they asked for a longer on ramp to get to the same place. And so that seemed reasonable to me. So, we have the same standard for them in 2035 and 2040. They've got to get to 90% 2035 and 100% 2040. But for 2030, which, you know, in utility terms is very fast for planning purposes, we said, "Okay, we're going to give you 60% target for cooperative and municipal utilities in 2030". So that they had a little bit more lead time to do planning and to get on board.

And that got them to neutral. So that was a big deal that they were willing to make that agreement.

David Roberts

A couple of other, you know, sort of what are being framed as concessions to utilities because, you know, utilities, of course, if you mandate something, they immediately come back and say, well, you know, they spin this scenario where 2040 is looming, and we don't have enough, and we're spending kajillions of dollars, and we're having blackouts.

Jamie Long

Right.

David Roberts

So you have to formalize some sort of, well, you have in the bill an "off-ramp", quote unquote "off-ramp", which just amounts to, as I understand it, if the dates are approaching and the utility doesn't think they can meet the target without compromising reliability, it can go to the PUC and say, "Hey, we can't do this without compromising reliability". And the PUC will say, "Okay, here's a little extra time". Is that the long and short of it?

Jamie Long

Pretty much, so a little more to it. But this has been in our renewable energy standard laws since the beginning, because there was always sort of a concern that when you got close you might not be able to get to meet it, and then you don't want the lights to go off. Right, is the argument.

David Roberts

I always just think it's funny, like find me a state, find me a PUC in the country that's going to be like.

Jamie Long

Exactly.

David Roberts

You can't meet the target without compromising utility reliability. Sorry, we're locked in by the law, we're all just going to have to have blackouts.

Jamie Long

Yeah, too bad. the Republicans in the legislature called this the "Blackout Bill". And my last name is Long, so they called it the "Long Blackout Bill", which I thought was good. It was like maybe if my last name had been Short, then it wouldn't have been as scary. We can deal with a "Short Blackout", but that was "Long Blackout". So the 2007 standard, 25% by 2025, no one ever used the "off-ramp", right? No one needed to. They met at eight years.

David Roberts

I don't know of a utility in a state, anywhere in the country that has had to use one of these "off-ramps". Like they always meet the targets. It's always easier than they think. It's like can we learn from but.

Jamie Long

I think it is important to have this in the bill because I don't want to assume that we're going to come back and change this bill a bunch of times between now and 2040. If passed us any lesson, we haven't done this since 2007, it might be another 20 years until we get back to this. Who knows? And so right now I'm pretty confident that we can get to 100% clean energy by 2040. But maybe I'm wrong. Maybe we can only get to 98% and then do we really want to force that last 2%? So it does feel like it is worth having that mechanism in here.

But what we did do is we made sure that there were real factors that the Public Utilities Commission would have to weigh. So yes, they have to relay weigh reliability and affordability, but they also have to weigh impact on environmental justice communities. They also have to weigh the social cost of carbon. And so what is this going to mean for the overall impact on our society? So you're right. At the end of the day, if it's going to affect reliability, and importantly now the utilities will have to establish that on the record in a public hearing through the Public Utilities Commission.

So it's not just the utilities saying, "Hey, sorry, I know I'd said 100% by 2050, but Tesla couldn't do it". No, now they will have to actually put together a record and demonstrate to the Public Utilities Commission, "Hey, here is why I can't do this thing".

David Roberts

We tried.

Jamie Long

Yeah, exactly.

David Roberts

So it's not an easy thing. It's not something they could just screw around for 20 years and then invoke this.

Jamie Long

No, and they have to do it before the public. So does the utility want to go and say, "Hey, I'm going to have to be burning more dirty energy"? I mean, they're not going to want to do that unless they feel like they really have to. So I do think it's important to have that tool in there but, I would not be surprised if it's used very infrequently, if ever.

David Roberts

Yeah. So the "off-ramp" did not bug me at all, but something else that's in there has kind of bugged me, and I read a bunch of articles about this and I just didn't see anybody else pick it out or examine it at all. But it also, in the bill says that utilities can buy RECs for compliance, renewable energy certificates, which basically just means someone else somewhere else generated more renewable energy than they need for their compliance and they're selling the leftovers, and you can buy the leftovers counted towards your total for compliance. To me, that's more of a red flag than the "off-ramp" thing because, as anyone who's been listening to Volts for a long time knows, these RECs are fairly cheap.

Like if you just want to buy bulk solar and wind, like wind power from the Midwest RECs, they're pretty cheap. And in many, many cases they're going to be cheaper than actually reforming your own operations or acquiring new assets of your own. So why shouldn't I be worrying about that more? It seems like if there's something I'm going to worry about utilities doing, it's not just putting things off, it's just buying a bunch of cheap RECs to cover their obligations. So how do you think about that?

Jamie Long

Yeah, well so this has been the framework that we've had in state law since the beginning of our renewable energy standard. So it's a tool that's been around and widely accepted. The renewable energy credits vary in cost and it's, you know, hard to know exactly what a 2039 renewable energy credit will cost. But they are real. So, you know, there's sometimes there is a concern around offsets in general, and I think a lot of that is valid, but renewable energy credits are a wind or solar or other renewable energy system where there's retiring their credit for a specific use.

So it is additional renewable capacity that is being built on the grid and, at least for Minnesota, for the RECs that have been used to meet some of the earlier renewable energy standards, 60% of those are in Minnesota, and all of them are in the Midwest.

David Roberts

Is that by requirement or is that.

Jamie Long

No, that's not by requirement but that's been the way, the way it's happened and I think the Public Utilities Commission has worked with trying to make the RECs as local as possible. So they so far have been all in the Midwest, and 60% have been in Minnesota. So that is additional renewable energy that's getting built in the state, and those credits can't be retired for anybody else. So if the utilities building their own renewable energy they're going to retire the RECs for themselves. So it is real. In some ways it acts as a carbon tax on the margins.

When you're getting towards that last little bit of power that you need to meet your targets, then you're going to have to pay a fee. But we know that renewable energy is cheaper right now than fossil fuels and this is only going to put even more of a finger on the scale towards renewable energy. And if you're an investor owned utility you're going to have to go in front of the Public Utilities Commission and demonstrate why it is cheaper for your ratepayers to have a fossil fuel plant where you're paying RECs on it than wind and solar. And I just don't think that is likely to happen.

David Roberts

So you are not worried about RECs forming any substantial chunk of compliance?

Jamie Long

No, I'm not. I think that the most likely use for that will be when you have a last one or 2% and you have some sort of, I don't know, hydrogen peaker that uses some hydrogen that made from fossil fuels or something like that, that it'll take over that last couple of percent. Or something like waste energy, that I was describing before, where there's some other public policy good that you're dealing with. We have a big emerald ash borer problem in the state right now, and are cutting down a bunch of our ash trees, and we have a couple of facilities that are burning that and making energy out of it so. That produces carbon and there might be a need to have a REC for something like that.

David Roberts

And I also just sort of idly wonder when we're getting up to 2030, 2035 if compliance won't be, if more and more utilities are under compliance standards whether there are still going to be so many.

Jamie Long

Well that's right.

David Roberts

Excess RECs to sell, right? I wonder if that market is going to tighten up.

Jamie Long

Market is going to tighten up. I mean these are going to be needed for a lot of different reasons. Corporate purchasers want RECs, utilities want RECs. We're seeing these standards become more common. So, I don't know that we can count on cheap RECs forever. And there does need to be I think some mechanism to account for these hard to deal with marginal sources. And we could say that you can't burn trash and you can't burn wood, but I probably couldn't have passed that bill.

David Roberts

Right. A couple of things about the bill itself. I'm sure you're aware one of the bigs from ongoing conversations in the clean energy world these days is about permitting and sighting and the difficulty thereof, that being kind of a bottleneck. Sort of like, even if you have willing capital and willing utilities and willing everything else, you have this process of permitting and sighting that is sclerotic and slowing things down. Did you take that on at all in the bill?

Jamie Long

We did, yeah. We know that transmission is going to be a big challenge. It's a big challenge right now. We have a very constrained grid in Minnesota and a lot of renewable energy projects aren't getting built that otherwise could because the transmission costs are too high. And our regional ISO, the Midcontinent ISO in Minnesota, has announced recently a $10 billion new transmission investment in Minnesota and the region, that's the largest in US History.

David Roberts

Oh yes, we did a pod on that last year.

Jamie Long

Yeah, I listened to it. It was great. So frankly, myself and the former Republican Energy Committee chair and the Senate pushed really hard on MISO to move as quickly as they could on this because there were so many constraints. So we've been working at that level, but we also are trying to help at the state level. And we have several provisions in the bill that are designed to help with siting. One would remove a specific certificate that independent power purchasers are currently required to do, that was designed for utilities with ratepayer customers, and so it wasn't really the right fit.

Another would, for very short tie lines for solar projects, that right now have to get county approval, would move that to the Public Utilities Commission. A lot of the counties don't want to deal with that anyway. So we were trying to do some of these easy streamlining things and they all wound up being really non controversial. But to help just make it a little easier to get some of this renewable energy deployed.

David Roberts

And do you feel like there's more to do there? Like, is that something that's going to come up again in the legislative session, do you think?

Jamie Long

Well, there may be. We had four specific fixes in the bill, and these had been around for a few years, we've been working on them for a while. There may be other changes that are needed to help out. The big thing we need to do is just figure out how we can get some of these projects built in our state that MISO has approved and we need to keep those on track. Minnesota Power has proposed a really innovative transmission line in northern Minnesota that's going to connect to some new wind power in North Dakota. And so that will be an important project too.

I think they're getting some federal support for that transmission line, it was recently announced. So we have to build some of these projects out and I think there's going to be some state support to do that. For example, we're going to try to pass a pretty hefty package of state matching dollars to help out with the Federal Inflation Reduction Act, available money for transmission, and we're hoping that that will help deploy some of these projects.

David Roberts

I'm curious both about the prevailing wage provisions, and sort of beyond that, the general disposition of labor toward all this, like the role they played in all this.

Jamie Long

I think that was one of the best parts of the coalition work we did was having the broad support of our building trades and labor partners. It's not always been an easy conversation with building trades and clean energy transition, but I think seeing where the economics have pushed some of the coal plants in our state, and also recognizing that we have really good opportunities to build clean energy. A lot of the building trades in Minnesota have been really good partners in trying to help make sure that we are moving towards clean energy and that we are doing so with good union jobs. So because Minnesota was kind of an early mover in clean energy, even though we haven't been that active in recent years, we did get an early mover advantage in our, kind of the 90s into the 2000's, and we have two of the largest wind and solar installers in the country, based in Minnesota. And combined, they tell me that they've installed over 50% of all wind turbines in the US In the last decade. So we have a lot of opportunity that Minnesota workers have seen over the years to build renewable energy projects.

David Roberts

And an existing workforce that's presumably helping you, lobbying with you for all this.

Jamie Long

That's right, that knows that these are good jobs. So we put a prevailing wage requirement for all new large energy projects in the bill, which is a big deal. And then we also included local worker considerations for the Public Utilities Commission, so that they could weigh when they were approving projects if they were in fact helping employ local workers. We also put in there preference for projects that are going to be in energy transition communities where coal plants, for example, will be retiring. So that we're trying to help backfill some of the tax base in those particular communities.

So we worked hard with our labor partners and I don't know if there have been other states where the entire building trades, the statewide coalition supported 100% clean energy standard, but in Minnesota they did. And we had the bill signing at the Labor Center in St. Paul to mark what a strong partnership this was.

David Roberts

Well, it seems to me like nothing but a good thing that this element of the legislation, the sort of prevailing wages, local workers, all this kind of stuff seems to be a standard part of these state bills now. Washington, my home state of Washington, did some great stuff on this, but it seems like now it's just sort of like a standard piece of the puzzle, which strikes me as all to the good.

Jamie Long

I think that's right. And I think President Biden deserves a lot of credit on that too, to having made this labor climate partnership a real cornerstone of his clean energy agenda.

David Roberts

So, before we wrap up with just a couple of political questions. You've said a couple of times that Minnesota is the purplest, let's say, state to pass one of these things.

Jamie Long

Yes.

David Roberts

Which is true, but, you squint close up, and it's party line vote in both chambers. So, I mean, this almost feels silly to ask, but was there anything helpful or supportive from anyone on the Republican side throughout this process or did you just come into this thinking, "We're Democrats, we got to figure it out among ourselves, there's no hope"? Was that as predictable as I would have expected?

Jamie Long

Well, unfortunately it was. It was fully party line in both the House and Senate. We have had some bipartisan clean energy wins in recent years. We were one of the only split legislators in the country in the last four years, and when I chaired the Energy Committee, we had some good wins on energy efficiency and solar deployment. But for the big changes that we really need, we really weren't able to find the partnership that we wanted across the aisle. I don't think that that's true with Minnesota public, though. When you look at the public polling, and we have some public polling on our bill, it's broadly supported by the Minnesota public.

There are partisan differences, though, even in the polling. So it does show that unfortunately, we are at a place where climate clean energy policy is more polarized than I think is healthy. But I think that the good news is, we have broad buy-in now from our utilities, from our labor partners. And I think if we look back on this in ten years, you'll find that the public is going to be very supportive and the politics on this will change. I think that when the public sees the benefits that this will have for job creation, for overall cost of utility bills, and of course, for climate public health, I think that support will grow.

But I don't want to undersell what we accomplished either, which is that with a one vote margin in the Senate.

David Roberts

Yeah, I mean, let me just ask about that directly, because the Inflation Reduction Act was a friggin miracle.

Jamie Long

Right.

David Roberts

Because it all came down to the whims of one vain, relatively illinformed person and just sort of woke up on the right side of the bed. We sort of touched on some of the elements of this story, like, you brought the utilities around, at least to be neutral, not against it. Labor was for it. I mean, there weren't a lot of big organized commercial interests, seems like, against it. It's just Republicans against it. So how did you manage to keep every single senator on line?

Is there some magic dust?

Jamie Long

So Senator Frentz, who was a lead author in the Senate, and I worked really closely together throughout the entire process. And he's a rural moderate Democrat, I'm an urban progressive Democrat. So we were a good partnership. But when the Senate flipped to Democratic control, I was taking a look at some of the new members and hoping that we would be able to pass a bill as strong as the one we passed. And there was a member who won, who was the majority maker, who won in the Trump district, bright red district in the far northwest part of the state, around Morehead.

And then I started reading up on his background and turns out he's a meteorologist who has been talking about climate change on the air for 20 years in his community, and the impact that this has on agriculture. He spoke on the floor on the Senate talking about how if we don't act now, the agricultural impact in our state is going to be enormous.

David Roberts

It's kind of a lucky stroke.

Jamie Long

That was a pretty good draw. We had a member who was in a challenging part of the state in the Iron Range, as we call it, in northeastern Minnesota, but we had all of his utilities that were neutral or supportive and we had the strong support of labor. And so for him, I think it was a vote that he could take and take with confidence. So, you know, the coalition that we built really helped. But we, we didn't we didn't take this to conference committee. We, Senator Frentz and I negotiated together and got to a place where we had a bill that could pass and get the support of folks in Trump districts in greater Minnesota and Minneapolis, districts in the Metro, with one bill with no amendments through the House and Senate into the governor's desk.

So that took some work, but I'm really proud that we were able to get it done.

David Roberts

The ability to hash this out such that it didn't need to go through a long dragged out conference committee process is really a notable level of party discipline and purpose, which we don't always associate with the Democratic Party. So it's really great to see when it comes up, like, you guys did not faff about you just went straight at this thing and passed it.

Jamie Long

That's right. We knew what we wanted to do and, yeah, we got it done in a month. So it was an intense month, but I think we knew our purpose and we were aligned in our goals. And I wasn't two months ago sure that we would be able to get a bill as strong as the one we got through done. But I think Senator Frentz deserves a lot of credit for the work he did with the senators. And frankly, our partners, the utilities, deserve credit for being willing to come along, right? They understood that this is the direction we're headed.

They knew this bill was going to pass. And so the asks that they made were pretty reasonable on the scale of things. And now I think we have one of the five strongest clean energy standards in the country.

David Roberts

Two very brief questions to wrap up. One is North Dakota says they're going to sue Minnesota over the idea being that, you not buying their dirty power is a matter of interstate commerce. And thus your bill, something, something, dormant commerce clause. The illegal analysis I've read indicates that this suit has no merit. There was a suit back in 2007 that the Republicans won, but apparently it was on different grounds, the law was very different, it's a whole different thing now. I don't know if there's anything to say about this other than, it's likely to fail, but do you have any additional thoughts on it?

Jamie Long

Well, it says a lot about energy politics in the state of North Dakota. I think it says more about that than our legal chances. But we're North Dakota's biggest customer for their biggest industry. So energy is a lot of what North Dakota does and, to date, they have tended to focus on fossil fuels. Now they are moving, there is a lot of wind energy development happening in the state and to Governor Burgum's credit, he has said that he wants to move to a carbon neutral economy by 2030, or carbon neutral energy system.

David Roberts

Yeah, they got a bunch of CCS and hydrogen fantasies to work out.

Jamie Long

That's right. Yeah. So that's where most of his hopes are pinned on. But in terms of the legal challenge, no, there's nothing really there. I mean, the overall framework which is that we are regulating what Minnesota utilities sell to Minnesota customers, has been in law for all of our renewable energy standards since the inception, and North Dakota has never challenged those. So they did win a lawsuit against us after the 2007 energy bill and that was around a restriction that we had on imports of out of state coal. So that is a harder one to hold up in court and it was struck down.

But in terms of this particular provision, it's not the same. And, as I mentioned, it was in law then and they didn't sue it against it because they knew that they weren't going to be able to win. So it is unfortunate. We'll probably have to go to court with our neighbors, and that's not never fun, but we're going to win this one and the law will go into effect, and hopefully North Dakota can sell us a lot of wind power.

David Roberts

I really wonder what North Dakota thinks it is communicating to the rest of the nation with this behavior. Like, how do they think this looks? I know they're all conservative and so they're all in the bubble, they're all watching Fox, so maybe they don't know how this looks to the rest of the country, but like good grief, suing to stop the future. Anyway, so final question this is electricity. Done and done. Check, check. What about transportation? And what about heat? What about natural gas heat? Those are the two big prizes after electricity. Are you cooking up plans to go after one or both of those?

Jamie Long

Yes, we are. So on transportation, Governor Walz has been a real leader on vehicle electrification. He was the first state in the Midwest to sign on to the clean car standards out of California that are permitted for other states to sign on under The Clean Air Act and took a lot of flak for that, but stood up to the naysayers. And that's been a good commitment from him. But now we have the opportunity to do good work at the legislature, too, on electric vehicles. So I suspect there's going to be a really big package there and a very big package on transit, which I know has been something that we have wanted to fund at a substantial level for many years and haven't had the political support to do that.

David Roberts

Yeah, you have some really, sort of, in those terms, kind of progressive cities in Minnesota that could use some help, I think, becoming more walkable and transit oriented.

Jamie Long

We sure do. And they very much want it, and haven't had the support to get there. So we got another light rail line we're building out right now, we want to build a fourth. We have a lot of bus rapid transit that's being built in the region that we want to help support, as well as new bike-ped infrastructure. My city of Minneapolis tends to rank in the top five cities in the country for bike infrastructure, but that doesn't come for free, and they want more. So we need more. So that's going to be a big area.

And then in terms of buildings, absolutely. The governor has a proposal to move our new commercial construction to net zero by 2036, for our codes, which I think would be exciting. And so that would be updating our codes every three years to get to that point. So I'm hoping that we can pass that this year. And certainly that's just the first step, we do need to make sure we're looking at existing buildings, I had a building benchmark bill last year that we are hoping can move this year, too. So there's more to be done. And luckily we have a lot of session left since we were able to get this done in month one.

David Roberts

Right. How novel, just to get something done quickly, and then I imagine even elements of the public who are against it, just like, everyone prefers for this just to be done, right? Nobody enjoys these full year long dragged out, miserable. No one wants that again.

Jamie Long

No, yeah, we avoided the Manchin "Will he? Won't he?" for a year.

David Roberts

Oh, thank God.

Jamie Long

And just got her done, so that was, I think, exciting.

David Roberts

Awesome. Well, congratulations again.

Jamie Long

Thank you.

David Roberts

Representative Jamie Long. Thank you so much for coming, and thanks for all your great work in Minnesota.

Jamie Long

Thanks, David. Appreciate It.

David Roberts

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