Jon Applebaum i Bate Representative Minnesota District 448, House of Representatives 110 State Olea Bui ® February 10, 2015 Govemnor Mark Dayton 116 Veterans Service Building 20 W 12th Street St. Paul, MN 55155 Re: Consideration of the Establishment of an Energy Department Dear Governor Dayton: Tam iting to ask that you consider the establishment of a cabinet-level position for energy policy and administration. ‘As you know, I was recently elected tothe Minnesota House of Representatives representing District 448 (Minnetonka, Plymouth, Woodland). It is my first elective opportunity to serve the public and I am honored to represent my hometown community at the Capitol. One advantage of being a newly elected official is that one is not tethered 10 historical practices. Perhaps what I lack in experience and tradition can be compensated for by my ability to bring a fiesh perspective, Indeed, 1 hope you will view this letter in that spirit. At the House, I serve on the Commerce and Regulatory Reform Committee. That Committee oversees the Minnesota Department of Commerce, which is where the majority of our state’s energy policy and energy grant activities are currently accommodated. From a brief look at the history of energy governance in the Minnesota, it appeats that in 1974 the state created the Minnesota Energy Agency and its leadership reported directly to the Govemor. See Minn, Stat. 116 H (repealed). It also appears that the status of this “Agency” shified overtime until 2008 when Governor Pavlenty, through Executive Order, placed energy policy and energy grant administration in the Minnesota Department of Commerce, where it resides today as a mere “Division.” See Executive Order 08-03. In 2011, you issued an Executive Order that changed the name to “Division of Energy Resources,” but maintained oversight of the energy area within the Minnesota Department of Commerce. See Executive Order 11-14, Energy poliey has been a significant part of your administration. Under your leadership, the push for alternative energy in the form of solar is growing, the possible imposition of a fuel tax has, beyond funding infrastructure, significant conservation implications and the legal challenge that you have forthrightly taken on involving North Dakota in recent weeks, however, the effectiveness of energy policy and administration has come into question on several front. First, because of the issue with Community Action of Minneapolis, questions have arisen over the management of the Weatherization energy grant program with some legislators now suggesting that responsibility for that program be shifted to the Department of Administration. See Minnesota Public Radio article dated 2/2/2015 entitled “Legislator: Commerce Dept. shouldn't control energy grants.” Such a concept strikes me as a move backward in tems of an efficient, good government. Another recent news article suggests that Minnesota is falling behind in reaching some of its climate change targets set under the Next Generation Energy Act. See Minnesota Public Radio atticle dated 2/6/2015 entitled “Minnesota's efforts to fight climate change lose steam,” which attributes part ofthe failure to meet targets to agricultural practices and inadequate building conservation programs. The fact that the Committee I serve on is now having to wrestle with these issues has caused me to question why the energy function has been relegated to merely a “Division” status within a relatively small Department in our overall state governance structure. Carson Pkwy. Ne. 218, Minnetonka, AN 55905, (12) 770-2016 100 Rev. Dr. Marin Luther King Jr. Blvd. St.Paul, Minnesota 85185-1200 ____ {e511 296-9934 FAX: (651) 296-8608 Email. rep jon applebaum@nouse mnFebruary 10, 2015 Page 2 ‘There are several reasons for considering upgrading the governance status of the energy area, including but not limited to + Bnergy issues are of enormous importance to all Minnesotans: rural and urban, rich and poor, commuters and those who use mass transit, the private and the public sectors, traditional utilities as well as those pushing alternatives; + Bnergy issues do not appear to be a natural fit within the Minnesota Department of Commerce, which primarily engages in regulatory oversight of financial institutions; + Annumber of other states provide the energy area greater visibility and provide direct reporting to the Governot and, as you know, the Federal Government has 2 separate Departmnent of Energy + Minnesota’s approach to energy policy appears diffuse with a number of state government entities directly involved (i, Transportation, Natural Resources, Agriculture, PUC, MPCA, DEED), however, despite efforts at coordination, no single government entity stands fully accountable; + AnEnergy Department could likely continue to be physically housed in its current location and, if duplicative efforts by other state departments are avoided through consolidation, the creation of a separate agency/department may actuslly save taxpayer money; and + Today, the Commissioner of the Department of Commerce juggles many agendes and issues that must ultimately come before the legislature and you: insurance issues, banking issues, telecommunication issues, real estate issues, securities issues, ete. The energy area would be well-served by providing both the legislature and you with a separate voice; one that would not be drowned out by the press of other Deparment issues and ‘one whose message could not be blurred by other agendas and issues, While it is impossible fo say whether or not a propane crisis or a purported misuse of energy grant money would be avoided by having a separate Department with strong leadership singularly focused on the energy area it seems that the probabilities are beter to avoid such issues. Lhope you will agree with me that overseeing insurance, banking, real estate, securities, telecommunications, Petrofund, weights and measures, payday lenders, bullion coin, notaries, and numerous other areas is enough t© put on the plate of any Commissioner of Commerce without the additional responsibility of overseeing the energy area, 1 believe that placing the critical energy area under separate, high-level leadership and providing it greater govemmental status would be a postive step fora better Minnesota and I hope you will give reasonable consideration to this proposal. | have made sure to copy Commissioner Rothman and Assisiant Commissioner Grant on this letter so that they can share their separate perspectives on this issue, Iam certain that they can provide futher rationale about the advantages and disadvantages ofthis proposal ‘Thank you for your consideration of this request, Respectfully ma f\_- Representative Jon Applebaum ce; Commissioner Michael Rothman Assistant Commissioner William Grant Senator John Marty Representative Joe Hoppe Representative Pat Garofalo Representative Joe Atkins