2017 Legislative Session Recap

GOVERNOR DAYTON’S ACTIONS OFFICIALLY CLOSE THE 2017 SESSION AND SPECIAL SESSION
by. Logan O’Grady

The 2017 legislative session began on January 3rd and ended on May 23rd. Governor Mark Dayton called the legislature back to a special session at 12:01 AM on Tuesday May 24th so the House and Senate could complete its work on most of the budget. The 2017 First Special Session officially ended around 3:30 AM on May 26th. Yesterday, Governor Dayton acted on nine budget bills passed during the 2017 regular and special sessions. A full explanation of the Governor’s actions can be found here.

This session marked CEEM’s first full budget session at the Capitol. We were successful in establishing a positive reputation with legislators on both sides of the aisle. Our efforts focused on educating lawmakers on business-friendly policies that support the creation and expansion of jobs and investments needed to strengthen Minnesota’s burgeoning clean energy economy. Our goal was to represent the shared interests of energy efficiency and clean energy businesses and stakeholders statewide. Like many Minnesotans, our clean energy business owners, their employees, and supply chain partners wanted to see realistic, common sense solutions to issues that affect their current operations and plans for future growth.

From the beginning, we knew this was going to be a challenging session to advance energy efficiency and clean energy policies. Not only as an emerging organization working to build a foundation of support in the legislature, but also due to a new legislature with leadership intent on eliminating some of Minnesota’s hard-fought, bipartisan energy policies that have helped build a thriving industry in our state. CEEM educated legislators on four main energy issues: the repeal of the Renewable Development Fund (RDF) and subsequently the Made in Minnesota solar incentive program (MiM); the elimination of Public Utilities Commission (PUC) oversight and review of net-metering fee disputes; the exemption for certain municipal and cooperative electric utility providers from complying with requirements of the Conservation Improvement Program (CIP); and finally, the adjustment to the statewide biomass mandate. In the end, the nature of legislative compromise was evident as every party at the table walked away a little disappointed.

First, the law eliminates the MiM solar incentive program. This program was developed in 2013 and, only three years into its existence, has established a Minnesota-based solar industry that employs over 3,800 hard-working Minnesotans. CEEM worked tirelessly to defend against misconceptions about this program and highlighted the many positive impacts for legislators while also recognizing its shortcomings that even industry leaders acknowledged. Due to our efforts and those of our partner organizations, this fast-tracked bill became stalled in the Senate where we worked with a bipartisan group of legislators to develop a compromise. This compromise maintains the RDF but eliminates the MiM program. Instead, the Solar Rewards program is extended by three years with $35 million in new money.

Second, this law removes the PUC from resolving fee disputes between municipal and cooperative electric utilities and their customers. CEEM and our partners fought this proposal early in session, working with companies and business leaders whose sales and marketing would be made more difficult and customers who have seen unreasonable fees already applied to their monthly utility bills. CEEM defended the PUC’s procedural review of fees in contrast to the municipal and cooperative electric providers who have worked for years to win over Greater Minnesota legislators on this issue. CEEM helped strike a compromise that requires municipal and cooperative electric providers to develop a plan for resolving fee disputes. Any plan must now require a third-party mediator agreed to by both parties with the muni or coop responsible for paying 90 percent of the legal fees. This compromise, while far from ideal, does help to ensure consumer protections and provides a check to an otherwise unchecked monopoly-based sector.

Third, this law exempts certain cooperative and municipal utility providers from participation in CIP. CIP was developed to increase savings for customers by promoting more efficient energy usage. CIP has also established a strong energy efficiency sector in the state’s economy. Energy efficiency businesses are thriving in Minnesota because companies and consumers alike want to save money on their utility costs and implementing more efficient technologies is often the smartest and cheapest way to cut costs. For years, however, this program has been under attack at the Capitol with municipal and cooperative electric providers saying they could not meet the standards due to smaller service populations in rural areas. Governor Dayton expressed his support for this program and his displeasure with this provision being included in the final bill. CEEM worked all session to educate legislators and the Governor’s Office in concert with small, medium, and large businesses that support CIP to share information on the program’s success in making Minnesota a great place to operate and the importance of the program for their future growth. CEEM will continue to educate legislators about this program over the interim by inviting legislators for visits to CIP sites and businesses.

Fourth, the law allows an adjustment to the biomass fuel requirement and uses taxpayer money to prematurely end existing contracts with individuals and private companies that have made significant capital and operating investments to provide renewable feedstocks for biomass energy facilities. CEEM worked with biomass industry during session to highlight the negative implications of this proposal and offered support to industry leaders when engaging lawmakers. CEEM’s goal is to continue our support for the industry by offering legislative tours and setting up meetings between lawmakers and those businesses and individuals impacted by this change in law. This will help educate decision-makers on the full impacts and concerning risks to biomass markets, supply chain jobs and investments, as well as forest health and forest management practices.

Each of these provisions were included in S.F. 1456. Despite signing this bill into law, the Governor outlined his serious concerns about these issues in a letter found here stating that the energy-related policies within the bill were “egregious” and contradictory to the bipartisan intent of the Next Generation Energy Act developed ten years ago during Governor Tim Pawlenty’s administration.

Finally, CEEM assisted on a couple issues in the tax bill that Governor Dayton will not sign but will allow to become law without his signature. His letter explaining this decision can be found here. First, CEEM offered support for increasing the Angel Investor Tax Credit (AITC). This program helps grow high-tech companies throughout the state by offering a tax credit to investors who chose to invest in start-up and early-stage companies here in Minnesota rather than other states. While the bill does not provide an increase in funding for the program as requested, it does extend the program for one more year as it was due to expire at the end of 2017. Second, the tax bill does increase the rates that companies can claim for tax credits related to spending on research and development activities. This tax credit benefits the clean energy industry by incentivizing Minnesota’s energy companies to innovate and develop new technologies for energy use.

Overall, it was a challenging first budget cycle for CEEM. However, we succeeded at our goal of establishing a presence at the Capitol and solidifying important working relationships with legislators laying a solid foundation in which to continue building. We are seen as a reasonable group willing to work to find common ground on behalf of our energy efficiency and clean energy businesses and stakeholders. We will continue our educational efforts over the summer and fall as we work to develop a stronger coalition of bipartisan lawmakers who support a growing and prosperous clean energy economy in Minnesota.