Transmission, reliability, and federal funding shape CEEM’s 2026 Legislative Preview

CEEM hosted our annual Legislative Preview event on Thursday, Dec. 4. The conversation spotlighted how shifting dynamics at the Minnesota State Capitol and evolving federal initiatives are influencing priorities around transmission, grid reliability, clean energy incentives, and workforce development. Attendees heard directly from legislators about how these issues, alongside debates over permitting reform and the role of emerging technologies, could shape Minnesota’s energy landscape in the coming session.

The lively Q&A session, moderated by Blois Olson, featured Senator Nick Frentz (DFL, Senate Energy Chair), Senator Andrew Mathews (GOP, Senate Energy Ranking Minority Member), Representative Patty Acomb (DFL, House Energy Co-Chair), Representative Tom Murphy (GOP, House Energy Co-Vice Chair), and Dr. Pete Wyckoff (Deputy Commissioner of Energy Resources, MN Department of Commerce). Their discussion offered valuable insights into bipartisan approaches, points of contention, and the broader vision for Minnesota’s energy future. The full video and transcript from the panel can be found below.

Nuclear Energy Strategy

[Olson] Energy and the cost of energy nationally is a top five issue for the first time in about 20 years. Minnesota is obviously doing well in affordability. When you look at the dynamics of the legislature, it’s been a while since there’s been kind of a moonshot or a big idea. Nuclear and transmission for economic development are going to be required debates and consideration. Starting with you, Senator Frentz, how do you frame up and get a divided legislature to address demand and how we create more power here, including nuclear, in a legislature that hasn’t been that open to really big ideas and you’re going to need bipartisan support?

[Sen. Nick Frentz] Thanks. That’s a great place to start. First of all, very proud of the work in the Senate that we’ve done on the advanced nuclear study. I think it’s fair to say that twice we’ve passed the bipartisan study. We should look at that. The tension with nuclear goes something like this: we have to have it to meet our 100% clean energy by 2040 goal. We cannot get there without it. We also want to make sure that we’re making winning decisions for all Minnesotans on cost and reliability. It is perfectly reliable, and what’s changed in the public’s conscience over the last 20 years—and therefore what’s changed somewhat amongst legislators—is that it’s carbon-free. So regardless of exactly where you peg the costs in terms of money and lives of climate change, nuclear is a more acceptable form.

Setting aside for a moment the issue of cost, Minnesota has a peculiar situation because in my view we broke a promise to Prairie Island in the 1970s and in the 1990s in particular. On the DFL side, I think it will be necessary for us to come up with a solution that incorporates nuclear that is still acceptable to the two principal players that come before our committee, which are the Prairie Island Indian Community and XL Energy. Currently, XL is not pressuring us to develop new nuclear. It’s affordable in parts. The cost of legacy construction has still not made it competitive enough that we’ll hear more about it. On the affordability scale, we would like to take a closer look at advanced nuclear, though I’m not sure that some of the old technology will be cost competitive in the near future.

Carbon-Free Goal

[Olson] Representative Murphy, the goal is 2040. It’s going to be 2026 in a few weeks. Is it possible? How do you bring people together for a big push to get to carbon-free and have the transmission to support economic development like data centers?

[Rep. Tom Murphy] I think what’s happened in the House, and I think that’s been beneficial, is with a 67-67 tie we are a lot more in tune with each other in terms of what we need to be talking about and how we need to address those things. We’ve toured the data centers. We’ve looked at how their impact has been. We definitely need to keep looking at those needs.

With data centers, it’s a real national security issue as well. Not only for having a base of an economy that’s important for us, but it’s important from a national security level that we participate in this. We want to be players, but how do we do it? I’m 100% with a nuclear moratorium lift—we need to work all those details out, but certainly that will be a great way for us to move forward.

There is a lot of conversation happening that’s good in energy. When we get together and talk, there are a lot of things we can agree on, and I think that’s the starting point we need. I do have a little bit of a concern that we need to fully vet everything as we go through. Sometimes we run and then forget to walk a little bit. When we run, we miss things. We need to be really fine-tuned to make sure we’re doing the right thing and not missing anything crucial.

I appreciate Commissioner Sullivan’s words on how well we’re doing today, and I hope we can continue that. But we need to focus on affordability, especially with ratepayers moving forward. I have real hope. I think our energy committee in the House has been excellent at fully vetting these issues, and I look forward to continuing to do that.

State Energy Vision

[Olson] Deputy Commissioner Wyckoff, as you think about what we’ve set as goals as a state and maybe some curveballs that have been thrown your way by the legislature or the legislative process in meeting those goals, does the state have the vision and the pathway to get there, depending on the administration, because sometimes it’s the administration that has changed their mind mid-session on how we do things like data centers?

[Dr. Pete Wyckoff] I would say that the curveballs are being thrown by the federal government, not by the folks on this panel. I want to differentiate those things. The biggest curveball we have is that the wind and solar tax credits are going away. That’s going to make those technologies more expensive. Here’s the thing: they’re still going to be the cheapest way to add new electricity to the grid. So we will still use them. They will just cost more. And those costs will be passed on to ratepayers because of federal government action, not because of anything that folks are doing on the stage here. That’s a curveball.

I think we at the state level are doing what we should be doing. We are struggling, just like every state is, to figure out what is the best way to manage the promise of large loads, which can be a benefit. The systems tend to be overbuilt. We don’t use most of our electric generation most of the time because we have the generation we need just for peak. If we can use more of that generation most of the time but not drive up peak, then increased loads actually drive down the cost of electricity by spreading the fixed cost out farther. But if we can’t figure out a way to bring on large loads like data centers without driving peak way up, then we’re looking at a reverse situation where this could be really bad for rates.

We have to look very carefully. We passed some data center legislation. They passed some data center legislation that I think is a great first step in the last session. We’re talking to every state. Everyone’s wrestling with how to manage this on a regulatory side, on an incentive side, on an environmental side beyond electricity. We’re getting a lot of inquiries from other states about, “Hey, it looks like you’re doing some good stuff in Minnesota.” And we’re saying, “Yes, this is what we’re doing. What are you doing?” So it’s a feeling-our-way-forward situation.

2026 Legislative Agenda

[Olson] Representative Acomb, as you look at the next session, what are the priorities to move forward with or set a path forward for the future on affordability and reliability?

[Rep. Patty Acomb] Very important issues for sure. In terms of what we are looking for this next session, it’s going to be trying to continue a little bit of the really important work that we started last session on data centers. I think we’re seeing where projects are happening around the state and a lack of transparency. One of the things we tried to get included last year was restrictions on non-disclosure agreements. I think it’s concerning when we have locally elected officials signing non-disclosure agreements with data centers, and we’re seeing a lot of pushback by one particular at this time. I think there’s bipartisan support to put some guardrails on that to ensure local communities have a fair understanding about what’s coming up.

Another piece we weren’t able to get included in last year’s data center bill, even though we passed some really great protections that will help protect Minnesota and Minnesota ratepayers, was environmental review. Several of the projects proposed in Minnesota are going through lawsuits because of inappropriate or lack of environmental review. I’m not saying this needs to be arduous or years long, but I think we can come together and put some appropriate environmental review in place to ensure our state and resources are protected from some of the largest and wealthiest corporations in the world. Those are some of the things I’m working on to build on the work we did last year.

[Olson] Senator Mathews, as you think about next session, where are the priorities? What needs to get done? What needs to be framed up for the future?

[Sen. Andrew Mathews] Thank you. I think we are going to have a lot of discussion on nuclear and data centers again next year. We actually did get a curveball in this last session, and it impacted my district because there was a data center proposal with a lot of community support. Early on, there was indication of positive support from the administration. We needed just some basic regulatory reform for what needed to go before the PUC, and things were moving along until the administration switched and that part got cut out of the final bill.

So I went from being the author of one of the first data center bills of the year to voting against the final proposal. While there were a couple of things in there I supported, there were a lot of things I felt were unnecessary, including extra fees. Many legislators didn’t want to support it until we were taking a lot of money out of these places for state coffers, and the result was killing the project in my local community. Over the last 10 years, Sherco has wound down. It was going to be replaced by a gas plant, then that rug got pulled out. Now this is the second data center pulled out in the last three or four years from my community.

They’re facing significant community budget shortfalls. Sherco has provided over 60% of the tax base that supports schools, the city, and emergency infrastructure, and that’s going away. Many of the projects they’ve tried to replace it with keep getting knocked down at the state level. We’ll be back at that. I think the data center deal can definitely be improved because it is driving impacts on Minnesotans either way. They’ll just be served from data centers outside our borders in neighboring states, taking jobs, economic development, and tax benefits with them. We’ve got to get it right.

On nuclear, I thought we were super close this last year, but some political decisions got made and it didn’t get done. We’re going to keep at it. I talk extensively with partners. There’s an ever-growing nuclear alliance forming around Minnesota. My county, Sherburn County, just joined the alliance and is urging other counties to jump on board because they want to have that door open. There are areas that may be prime sites close to interconnects or existing grid infrastructure. Right now, with the moratorium, they can’t even have the conversation about whether a proposal would make sense or be cost-effective.

When we say “have the conversation,” that’s more than just a panel discussion or debate. It’s the real work: proposals, planning, IRPs, the things our energy providers have to do moving forward. That door is closed. There’s a lot more to do, and I’ll keep pushing on it. We’ll see what comes about next session.

Permitting Reform

[Olson] One of the topics we’ve hit on now I know is one of your favorites: regulatory reform, permitting. What can be done to make us competitive with other states in the time it takes to get a permit? Like Representative Acomb said, she doesn’t want to delay things, but we do have a strong reputation for being slower than our neighbors.

[Sen. Nick Frentz] I think if I were one of you sitting in this room, that might be my first question. The State of Minnesota is too slow. It does not prevent us from asking questions we want to ask. It does not prevent us from protecting our ratepayers or the environment, but we’re too slow.

What we could do, if it was a priority, is expedite processes, change timelines. We could hire more staff and make their job to speed it up. I represent a largely rural district, and the permitting discussion is going very badly for Minnesota. Things we can permit in South Dakota in 90 days take 18 months here. These are real Minnesotans trying to make a living, put a roof over their heads, food on the table, clothes on their backs. I don’t have a good answer why we’re so slow.

We want to be careful. We are known for protecting the environment, and those are good things. My father was a Sierra Club member his whole life. But we could say we’re committed to it. We made progress in clean energy permitting. I want to thank the PUC for that. I thought that was good input and we got something passed. But my friends across the aisle make a good point: we’re going to make clean energy permitting better, but the rest has to wait.

One of the questions here is about bipartisanship. I’ll just say I think permitting reform, like energy itself, can be bipartisan. That’s a good thing. Bipartisan solutions are durable. The public has more confidence in them, and they last longer. Count me in for work on permitting reform, and that includes not just in the energy sector but across the board.

[Olson] Deputy Commissioner Wyckoff, what can be done? Is there a view? Is there work being done within the department that says we could go faster? Here’s what we need.

[Dr. Pete Wyckoff] I think we need to differentiate between environmental permitting and the energy permitting that happens at the PUC. The PUC processes are being sped up by legislation passed two years ago that went into effect this July, and I am optimistic that will help with energy project permitting. I think it was a good bill, and it’s just getting implemented now. What folks are talking about are processes more in the EQB, DNR, MPCA area.

[Olson] Let’s bring it up because those departments have to work together. That is one of the biggest frustrations with permitting. As departments that have to talk to each other, how do you talk to each other better? How do you streamline it? This has been a question on every panel for 10 years. People have been asking for departments to work together. As a deputy commissioner, how are you working together? Is it improving?

[Dr. Pete Wyckoff] I will say yes. In the Department of Commerce, we only have permitting activity in the energy space, so I can’t promise beyond that. I came from a federal background. I worked in the Senate as a staffer before, and we were looking at national permitting reform proposals. They do the same things we are doing in energy here: processes happen simultaneously, the length of each step is reduced, and things that are relatively simple but were in a more complex permitting track are put back into a simpler track. I think the model we used in energy permitting reform is good for all kinds of permitting.

Clean Fuels

[Olson] Representative Murphy, I want to shift here to clean fuels, clean energy. What more can Minnesota do to be a clean fuel leader?

[Rep. Tom Murphy] My background is agriculture, so anything we can do for agriculture is important. That’s a very good step. It’s the base of our economy, so it’s really important. Some of the things I see happening concern me. Sequestration can add cost, and I want to make sure we know the answers to sequestration.

I had a chance to visit with the owner of a coal mine in Center, North Dakota. He had just spent $1.4 billion on his coal mine, and then another $1.4 billion to bury his CO2 6,000 feet in the ground. In North Dakota, there’s a benefit for burying CO2 because it can push out more oil. But that is a huge cost—$1.4 billion. I asked, “Why did you do it?” He said, “If we don’t do this, you’ll shut us down.” That is how the affordability picture changes.

We want agriculture to do well with options like ethanol and sustainable aviation fuel. We want those things for our producers, but we have to watch out that we’re not making it so difficult for them to survive by adding costs, especially if we’re not competitive with our neighbors or on a world stage. We need to be careful of that and fully understand what it means.

I ask all the time in committee, “What does it look like when we get there? Where is the CO2 going to be when we get there?” People want to know. These costs will have an impact on what they’re doing. Agriculture is the base of our economy, but we need to fully vet all of these options.

Project Affordability

[Olson] Representative Acomb, are there things that could be done to make it more affordable for these big projects to be developed in Minnesota?

[Rep. Patty Acomb] Can we make big projects more affordable? It depends on what these big projects are. What I will say is that there’s a lot of innovation in the room. As we’ve looked at new types of energy generation, I’ll use geothermal as an example. We’ve had a lot of great new companies and ideas that will help us in our decarbonization goals and in looking to the future.

It depends on what those projects are and whether we have partners with the federal government. As was alluded to earlier by Commissioner Pete, in Minnesota we pay a lot of federal taxes but don’t get as much back. Having that rug pulled out from under us has been challenging as we look to make long-term goals.

Geothermal is one of those areas where we can continue to do work. I’m hopeful that as a state we can do better to look at network geothermal, ways of heating and cooling that are not dependent on fossil fuels.

Clean Steel Initiatives

[Olson] Senator Mathews, picking up there, we in Minnesota do have the opportunity on clean steel and sustainable aviation fuel. What can be done in this next session that maybe has bipartisan support to accelerate some of these projects that are just waiting for the legislature to give them a nudge?

[Sen. Andrew Mathews] It’s a great question. I admittedly don’t know the steel industry as well as some of the others more pertinent in my district, but I’ve heard it’s been talked about quite a bit. I think the biggest thing legislators should do is let the innovators innovate.

We don’t need to jump in and figure out how we regulate, tax, or set up a fund asking for payments for the privilege of doing business in our state, as we’ve seen in other industries. I think we should let innovators work on and prove they can deliver a good product. That was done long before any 100% mandates or other requirements came down the pike—something that grows, gets adopted, and becomes widespread and mainstream.

The legislature can nudge innovation, but it has the power to hamper it much more quickly if we go that route. My encouragement to the legislature is not to jump in and think we have all the answers from our offices in St. Paul. Let the innovators innovate. Let them work on their products. Let them get tested in the market. We’ve seen a lot of successes before, and we can definitely see it again moving forward in these new areas.

Minnesota Energy Grade

[Olson] We’ve covered a lot of ground in a short period of time, and thank God the audience is smart because that helps with complex topics. As we wrap up here, start with Senator Frentz. Give Minnesota a grade as we enter an election year where energy is going to be a top five topic and maybe even come up when you door knock. Give us a grade on how well prepared we are on affordability and competitiveness of economic development. And is there anything you can do to improve your grade in this next session?

[Sen. Nick Frentz] That’s a great question and thanks. Thanks everybody. Thanks fellow panelists. This is exactly the kind of conversation we should have on affordability. I give us a B. Competing with 50 states, I think that’s a good grade. What we can do is continue to support the PUC and continue to support open public conversations with folks like you in committee. The difference between the regulators and the legislators is that we are hired by the voters and we’re fired by the voters. You mentioned election year—if you’re not listening to your constituents, you’re going to be the ex-senator pretty soon.

So B on affordability. Economic development, C. There are a couple things we need to understand here, and I’ll use my colleague Senator Mathews’ district. A lot of the data center discussions—these are some of the most valuable buildings in the world—come down to mistaken presumptions that they will be built in exactly the same places and timeframes. That’s not true. We lost this project in Becker. We had the school superintendent in Becker testify in our committee. That’s 40% of the school budget. You’re talking about Minnesota school kids and an impact on their budget. Jobs to build those things.

Now, I’m not suggesting that we drop all our regulatory environment, but for example, we have a certificate of need requirement on backup generation. Backup generation is used 100–200 hours a year. And we already have a data center that has to be permitted through the PUC process for the utility and through the DNR with water protections, which Minnesota is well known for being a stickler for, which I like. So the answer is C on encouraging economic development.

We have a certain revenue, and we’re going to talk about the budget tomorrow. We often argue about the slices of the pie: health and human services, education. I love it. It’s such a cool job to work in St. Paul. I feel privileged. But you don’t hear us talking enough about how to grow that pie. A lot of your businesses and the work you’re doing are helping us expand it. Look at the number one story out of this event: 64,000 jobs. Those are men and women going home, taking care of their families, providing us a service. We can do a lot more of it. There’s a lot more I could say, but we want to stay on schedule.

[Olson] Thanks, Senator. Senator Mathews, grades on affordability and being prepared for economic development in the future.

[Sen. Andrew Mathews] I probably won’t grade it quite as high as Senator Frentz would. We can compare where we rank among the 50 states, but I don’t think that’s the correct first comparison. We need to look at how it’s impacting families on the ground. It’s not about how it compares against other states. Families don’t care about that. It’s how much is it taking out of the family budget, and is that getting too high?

I’ve looked at my own monthly statements and compared the same month from the year prior to the current year and thought, “Yikes, that’s a sharp increase.” Wages are not going up as fast as many people’s bills and utilities. That’s the standard of comparison. I’ve asked multiple times in committee, some of the people at that table have probably gotten the question when I’ve looked at them after a presentation and said, “Give me your definition of affordable. What’s the dollar number? What’s the range? What’s the ballpark?” We need a solid answer on that.

We like to throw out terms: affordable, reliable, clean. Affordable by whose definition? I take it from how it impacts families and communities as the most important thing. Grading how we compare to others and neighbors is good, but we definitely have a lot more work to do to make it better. We can sit up here and say we’re the seventh best in the country, but in my community I still hear bills are going up and it’s a tighter squeeze on the family budget than it used to be. That’s the course correction I’m hoping we keep making in the next few sessions.

[Olson] Representative Acomb, grade?

[Rep. Patty Acomb] Overall, I think Minnesota is doing pretty well. We’re above average. I think we saw some of the lists today with Commissioner Sullivan. As far as affordability, they talk about things like energy burden, a ratio or percentage of costs that your income goes toward paying energy bills. I forget the exact number, maybe 7%. But we do have a growing number of energy-burdened households within our state.

We just saw an impact again from the federal government with the delay of low-income heating assistance coming to our state and the impact that’s having on families across Minnesota. We need to do a better job to help those who need help with affordability.

As far as reliability, we had a presentation from MISO in our committee last year that said Minnesota is the most reliable state within the MISO territory. That’s great, and it comes from the dedicated commissioners at the Public Utility Commission.

We also need to recognize, as was said earlier by our moderator, that energy costs are becoming an important issue to voters. In the last election in New Jersey, Virginia, and Georgia, people recognized the impact of their energy costs, and it’s becoming an issue important to them when they vote. We need to recognize that and address it in the policies we’re making and the places where we’re choosing to invest. So overall, we’re doing well, but there’s still a lot more we can do.

[Olson] Representative Murphy?

[Rep. Tom Murphy] Thank you. I would say we need a little improvement. We have to spend a little more time, maybe after hours, working on things. I have real concerns in agriculture with property values. Commissioners in Douglas County told me, “We have to do something about property taxes.”

Where property taxes are changing is that an average grower can rent his ground out for $200 to $300 an acre, but the same grower can turn around and get around a $1,500 to $2,000 credit per acre for putting in solar farms. The result is that 83% of our solar installs in Minnesota are on ag land, and 50% of those are on prime ag land. We can’t do that. We are in one of the most prominent ag-producing areas in the world. We can’t take 100,000 acres and put our ag land into solar. It looks nice by the interstate, but we can’t do it.

When you look at cost, look at California and what their electricity costs producers. I appreciate what we’re doing now, but if we lose our base load, eventually the cost of power will rise. In agriculture—I come from dairy farming—you look at dairy farmers spending large amounts on electricity. Take $1,000 a month and multiply it by five. That doesn’t work. And it’s not just agriculture, it’s all businesses. That will drive up costs for you that don’t come directly from your electric bill but from everything else you use.

From an affordability standpoint, we need to do a lot more work on what this looks like because we are definitely facing an increase in electricity overall. Thank goodness for our neighbors with hydro and coal that can supply us for now, but if we reach the point where we’re not taking their power, we will pay more for electricity, and it will show up in many forms. We need to continue to work on this and really vet it. I don’t think we’re done yet.

Just one quick example: there hasn’t been many real pilots on climate, but there is one in the Canary Islands. It’s an island of 11,000 people, part of Spain. They decided to go completely renewable. They have two reservoirs 2,000 feet apart. They move the water and produce their own hydro. It’s unique, and it works well for them. They put up wind and have batteries, but right now, after 10 years, they’re only producing 10% of their electricity from renewables, even though that was their goal.

Do we know what that outlook looks like down the road? Because if we get rid of our base load power and don’t have nuclear on its way, Minnesota will be on an island by itself. We need to look at all of this with a fine-tooth comb. We encourage discussions like this. It’s important to bring people forward with both sides of the story. A lot of our research has been done through agencies and universities, but there’s more data out there.

I’ll give you a lead: there’s a documentary called Climate: The Movie you should all watch. They interview people from the Department of Energy, Nobel Prize winners, and others who give a different impression. We need to be right on this. This will be a huge expense for Minnesota. Sometimes we run when we should walk, and we need to be right on this one. It’s really important to the state of Minnesota.

Legislative Recommendations

[Olson] Deputy Commissioner Wyckoff, I’m going to switch it up for you. You have these four here. What’s one or two things you’d like them to do this session? And in some ways, I’ll say let the things they’ve passed in the last two sessions start to play out. I don’t have a huge agenda.

[Dr. Pete Wyckoff] Got it. On that, I will note one of my favorite quotes from Lieutenant Governor Flanagan. When I interviewed her about what she’s learned from going from the legislature to the administration, she said sometimes the legislature passes things they don’t understand how tough they are to implement in the administration.