What is ECE’s response regarding the recent benchmark requiring utilities to offer 100% carbon-free electricity by 2040? President/CEO Justin Jahnz shares his thoughts.
Carbon-free by 2040 requires a balanced approach
East Central Energy members have been reaching out to their local cooperative, asking about our stance on the decarbonization legislation that the governor recently signed into law, requiring 100% carbon-free electricity generation by 2040. Though ECE did not publicly support the bill, we didn’t stand in opposition either. Confused? Let me explain.
When I had the opportunity to testify at the Senate’s Energy, Utilities, Environment, and Climate Committee hearing, I used my time to share concerns and encourage a thoughtful dialogue.
We need a reasonable approach to decarbonizing the grid. Reliability during extreme weather conditions—which we experience regularly in our region—is critical. In addition, many forces like inflation, fossil-fuel costs, and supply chain issues are already impacting the cost of delivering electricity; can you imagine how artificially increasing costs to encourage carbon reduction would impact our members? This legislation creates an artificial demand for carbon-free resources that could elevate prices and, if poorly implemented, threaten reliability.
While ECE (and other Minnesota electric cooperatives) had significant reservations with the original language of the bill, we achieved some common-sense compromises to the final version thanks to grassroots efforts, the hard work of our statewide organization, and legislative representatives in our area.
First, we obtained the flexibility to continue using required fossil-fuel assets like the peaking plants we depend upon in extreme situations. Second, renewable energy certificates, which are created and registered as renewable energy is generated, can be retired to offset the use of fossil fuel resources. Third, cooperatives received a reduction in the near-term milestones of the requirements.
The mandate creates a requirement for 60% of electricity to come from carbon-free sources by 2030, then 90% by 2035, and 100% by 2040. It is likely that our power supplier, Great River Energy, will achieve the 2030 milestone, but the cost of the 2035 and 2040 requirements could be much higher.
As we move forward together, we must consider the financial, reliability, and environmental impact of the decisions we make. At some point, there is a diminishing return on investment for intermittent resources and the required transmission lines. Yes, we should continue on the energy transition path, and technology will aid in that cause, but we also need to remain aware of the cost to those who may struggle today.
Regardless of the party in power, your cooperative will continue to work to achieve the best results for our 66,000 members. We are proud to represent you. Balancing battery technology, renewable energy, and existing resources will be vital when reducing our carbon footprint. We are working to responsibly implement those options…when they make sense.
If you’ve noticed energy issues have become politically divisive, you’re not wrong. Whether the topic is solar, wind, electric vehicles, or the reliability of the grid, there seems to be an ideological divide. The way forward is to work together and engage in robust, open-minded conversations with each other and those in St. Paul and Washington, D.C.
Do you have questions or opinions about ECE’s stance on this important legislation? President/CEO Justin Jahnz can be reached at 1-800-254-7944 or [email protected].