Committee advances Xcel Nuclear Blank Check Bill despite overwhelming public opposition

On March 27th, 2018, the MN State Senate Energy and Utilities Finance and Policy Committee held a hearing on Nuclear Blank check bill SF 3504, and advanced it toward a full Senate vote.  

Due to hearing overwhelming lopsided opposition to the bill, the Senate Committee amended the language both before and during the hearing in order to justify advancing the measure on a 7 to 2 vote.  

See Coverage of hearing in MPR !

UPDATE: The Companion Bill HF 3708 had a House Hearing on April 16th & narrowly passed out of House Committee on April 20th. While SF 3504 passed the full Senate on May 14th, no full house vote took place before the end of session so the the bill did not advance. 

ORIGINAL HEARING POSTPONED TWICE, BILL REVISED TWICE

On both March 27th and five days earlier on March 22nd, 2017 Community Power and Coalition partners provided a small dose of visual theatrics and a mini-rally in the hall of the State Senate building with our giant replica of a blank check prop, our "Xcel red box" prop and a "Mr. Moneybags" outfit. 

On March 22nd, the Committee abruptly and at the last minute cancelled the hearing we were anticipating on SF 3504 (after it had already been postponed once before, originally scheduled for March 20th).

In my phone conversation with the Committee administrator when I was requesting to testify at the public hearing on SF 3504, he told me that a lot of people had signed up to speak at the hearing, and I later learned the vast majority were opposed. So rather than face members of the public expressing fierce opposition on the unpopular bill on March 22nd, they schemed to reintroduce a somewhat different version of the bill for a hearing the following Tuesday, March 27th. Amending the bill gave the committee a way to claim they were taking peoples concerns into account about safeguards for ratepayers and flexibility for the PUC.

However, the organizations who expressed opposition to the very brazen original language of SF 3504 remained opposed to the bill at the March 27th hearing and agreed the revised nuclear blank check bill still had the same “core” problem (pun kind of intended). 

As a result, Chair Osmek had to repeat the same technique of amending the bill to give the appearance of responding to public input. Osmek offered an amendment which passed the Committee unanimously and shortly after the Committee advanced the bill on a 7 to 2 vote. While Senator Goggin recused himself, all other Republicans voted yes, while the Committee’s 4 DFL members were split 2 against (Marty, Dibble) and 2 in favor (Hoffman, Simonson).   

 

21 OPPOSED. JUST 2 IN FAVOR.

 

The Senate Committee provided the roster of names who had requested to speak to about SF 3504 and it showed a total of 21 individuals having requested to testify against the bill and just 2 individuals having signed up the speak in favor.

 

The only non-Xcel speaker in favor was Andy Snope with the IBEW MN State Council. Despite anti-SF 3504 speakers outnumbering pro-SF 3504 speakers by a 10 to 1 ratio, Committee Chair Osmek decided to give the entire slate of opposition and supporters both the same 20 minutes total time slot to speak. As a result, only the top 10 individuals on the whole list got to speak.

 One additional handout at the hearing was also a joint letter penned by 4 different organizations (The Citizens’ Utility Board, AARP, Energy CENTs, and the MN Citizens Federation) opposing this bill.

 

   

 

ONLY 8 SPEAKERS OUT OF 21 GOT TO SPEAK, BUT THEY ECHOED A CONSISTENT MESSAGE

Opposition to SF 3504 presented a rare instance where the MN Chamber of Commerce, large industrial energy users were in a coalition with the full spectrum of environmental groups and the MN Department of Commerce.

The Minnesota Chamber of Commerce remained in opposition to SF 3504 bill despite recognizing “the small improvements” committee members made to the bill before the hearing.

Sarah Johnson Phillips of Xcel Large Industrials (an Ad Hoc consortium of large industrial users of electricity) said that SF 3504 undermines a settlement agreement from the last rate case where parties agreed to a process that Xcel would bear the burden of proof for cost prudency.

Bill Grant with the Department of commerce echoed our framing that the proposed bill “gives Xcel too much of a blank check”.

In addition to hearing our blank check framing catch on, we also heard a common theme of risk-shifting emerge among the 8 people who did speak in opposition.

Johnson Phillips as well as Cam Winton of the MN Chamber of Commerce said the bill shifted an enormous amount of risk from Xcel onto its ratepayers. Matt Privatsky of Fresh Energy stated that “the risk to ratepayers is too much” and Chris Conry of Take Action MN also stated concerns about “the shifting of risk”. Justin Fay of the Sierra Club stated that the bill provides certainty for the Xcel shareholder, but not for anyone else.

A few speakers articulated this concept in more detail.

Tim Schaeffer of the Citizen funded non-profit Environment MN said that good energy policy gets utilities to weigh risks and costs, not offload them onto ratepayers and that they thereby support "real renewables that do not include massive insurance subsidies".

Bill Grant of the Dept of Commerce said they were opposed to the bill because it enables premature decisions and is potentially harmful to consumers and that the most prudent route is to simply use the Integrated Resource Plan (IRP) process already in place to ensure cost-effectiveness. He said this bill “puts cart before the horse” by accepting nuclear project cost-recovery before the rest of the IRP process.

 

 

WHAT DID XCEL HAVE TO SAY?

 Chris Clark, president of Xcel’s subsidiary Northern States Power, was the first speaker at the public hearing and was further questioned for the extensive time period after public commentary was closed.  

At the beginning of the March 27th hearing, Committee Chair Sen. David Osmek instructed commenters to keep their testimony related to the bill at hand and not about getting into the weeds about nuclear power in general.

However, Chris Clark spoke plenty about Nuclear energy in general. He asked the legislature formally recognize the value of nuclear energy a part of “a safe and diverse” mix of energy resources.

(We do not share the view of Nuclear Power being compatible with an energy mix of renewable Wind and Solar because it can’t adjust its output quickly- see short video explaining)

 

In place of our characterization of Xcel seeking a blank check, Chris Clark kept describing his Xcel’s motives in lobbying for this bill as Xcel “seeking to provide a tool for the PUC to use”.  Clark said he thought it was important for the legislature to weigh in by enabling the Commission to have a tool to recognize the value of nuclear energy in MN’s power mix.

 

(Most other energy experts see extending the lifetime of nuclear plants as coming at an opportunity cost for wind power in particular)

 

Clark pointed to how large Xcel customers, particularly municipal governments and corporations such as Target have ambitious clean energy goals. And he used that to justify support for the SF 3504 on the presumption of nuclear power being “clean”. He also argued that part of valuing carbon reduction is the need to ensure Xcel does not transition from nuclear to natural gas.

 

(The latter is rather duplicitous argument given that Xcel pulled off a similar regulatory workaround last year for a billion-dollar new natural gas plant).

Rather than our characterization of SF 3504 usurping the PUC process, Clark said SF 3504 “complements” the PUC process. The obvious motive was for Xcel to have SF 3504 into state law in time to craft their 2019-2034 Integrated Resource Plan due next February.