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Minnesota Taxpayers Stuck Footing The Bill For Wind They Can’t Use or Sell

Minnesota Taxpayers Stuck Footing The Bill For Wind They Can’t Use or Sell

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Published by: tuffstuff49 on Apr 20, 2012
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05/13/2014

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THEBLAZE
BUSINESS
MINNESOTA TAXPAYERS STUCK FOOTING THE BILL FOR WIND THEYCAN’T USE OR SELL
Posted on April 19, 2012 at 4:08pm byBecket Adams
Taxpayers in Minnesota ended up paying
$70million
more than they needed to for electricityin 2011 because of “green” energy mandates,according to theMinnesota Rural ElectricAssociation(MREA).“Taxpayers already pay a high price tosubsidize wind energy through billions in federalgrants, loan guarantees and tax credits thatprop up the ‘windustry,’” Tom Steward writes fortheMinnesota State News.“Now the bill for state renewable energymandates is coming due with hundreds ofthousands of Minnesota electric co-op and utility customers picking up the tab,” he adds.A $70 million dollar tab, that is.Related:Gov’t-Subsidized Wind Farms Told NOT to Produce Energy“It’s an enormous subsidy. You have to add wind power, whether you need it or not,” said Mark Glaess, MREAexecutive director. “Right now we’re paying for wind we don’t need, we can’t use and can’t sell.”So how did this happen?Steward explains:
The 
Renewable Energy Standard (RES)
passed by the 2007 Minnesota State Legislature directs electric utilities to ramp up their percentage of renewable energy sales to 25 percent by 2025. Put another way, one of every four kilowatt hours must come from renewable energy by 2025. Unlike many other states, Minnesota does not exempt co-ops and municipal utilities from complying with renewable energy standards. To meet the state’s escalating demands, rural electric co-ops and utilities locked in long-term “take or pay” contracts to purchase power from wind farms.
However, a drop in demand due to the lagging economy and competition from natural gas pushed the price of energydown significantly.
innesota Taxpayers Stuck Footing The Bill For Wind They Can’t Use or ...http://www.theblaze.com/stories/minnesota-taxpayers-stuck-paying-for-w...1 of 44/20/2012 6:09 AM
 
“The RES exists in a sort of price vacuum. No matter that coal-generated power costs considerably less than wind.Dozens of Minnesota co-ops are stuck with higher, pre-recession prices for surplus wind power which must bebought and distributed,” Steward writes.“The difference between what the wind power costs and what it resells for now adds up to tens of millions of dollarsa year statewide with rural residents caught in the middle,” he adds.Which means Minnesota taxpayers are stuck paying for “green” energy regardless of whether they can sell it.“It’s a well-intentioned law that did not contemplate the inexplicable law of unintended consequences because itnever considered resource planning to meet energy load and demand. What happens when the load goes down?Our members still have to buy it,” Glaess said.“And we’re going to have to increase rates to pay for our incumbent coal generation, which is getting smacked bythe EPA (Environmental Protection Agency),” he adds.Hot Air’sEd Morrissey is not particularly pleased with the situation:
Spare us, please, from “well-intentioned” laws. The legislature attempted to dictate market supply and demand, and it produced the failure that this kind of central planning always produces. As a result, Minnesotans have to pay energy costs above current market levels at a time when their disposable income has become more and more restricted, thanks to price increases in gasoline and food. It’s yet another demonstration of the folly of central planning.
Co-ops and utilities in Greater Minnesota say some customers already have a difficult enough time paying theirutility bills without the mandate. Considering the fact that the MREA is only halfway through implementing the
innesota Taxpayers Stuck Footing The Bill For Wind They Can’t Use or ...http://www.theblaze.com/stories/minnesota-taxpayers-stuck-paying-for-w...2 of 44/20/2012 6:09 AM
 
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mandate, it’s probably going to a lot worse.“What’s awful is the percentage of customers who are late in paying their electric bills,” said Glaess.“The average percentage that poor people are spending on energy has increased by a great deal and then they’rethrowing more of this on us? It’s regressive energy economics,” he adds.
This article has been updated.
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