In 2014, Minnesota became the first state to approve a “value-of-solar” tariff, but utilities have chosen to continue with net metering as the preferred compensation method for distributed generation. While regulators and other stakeholders continued to work together to figure out how to get utilities to use the tool, the largest utility in the state, Xcel Energy, attempted to increase fixed charges for residential customers. Fortunately, the state Public Utility Commissioners denied Xcel’s request, and in doing so remarked that Xcel has increased customer charges four times in the past five years. But this was not the only attack on distributed generation.
In May 2015, legislators in the state house passed an energy bill, HF 1437, in order to make net metering customers of municipal utilities and electric cooperatives pay higher fees. But HF 1437 was introduced less than an hour before the close of the state legislative session, and passed with two minutes to spare with only 84 of the 134 members voting on the 93-page bill.
Representative Rick Hansen said, “What a joke – it comes over with a couple minutes to spare.”
Governor Mark Dayton vetoed the bill and in his veto letter, specifically mentioned changes to the net metering law as reasons for doing so. Unfortunately, several weeks later, the bill was signed into law during the state’s special session. It is not clear how much co-ops and municipalities will charge new net metering customers. The only guidance in the new law is that a charge must be “reasonable and appropriate.”
The Minnesota Municipal Utilities Association and the Minnesota Rural Electric Association backed the law. In fact, an East River Electric Cooperative December 2014 newsletter highlighted a board hearing where the Minnesota Rural Electric Association laid out their legislative initiatives. The newsletter featured net metering reform as the “top legislative priority.”