Presenting HF234 to the Minnesota House Ways and Means Committee, bill author Dave Baker, R-Willmar, called his legislation a "local democracy bill."
While many Minnesotans think of cooperatives as warm fuzzy places like their local co-op grocery store, the reality of electric co-ops is often far from democratic, as Just How Democratic are Rural Electric Cooperatives? a recent report from the Institute for Local Self Reliance explores.
But there's more: a dispute by a rural utility member is under consideration by the PUC
Via the Voice of Alexandria, a Session Daily article noted:
Solar industry advocates said the change would remove a venue for hearing complaints by co-op members, particularly those disputing the fairness of so-called net metering fees on individuals generating power with solar panels on their homes or businesses.
This isn't an abstraction at a time when a dispute by a rural utility member is under consideration by the PUC. In two earlier instances the PUC commissioners found that the customers were justified in bringing their dispute and required the utility to cease its illegal conduct.
In the other instance ( PUC Docket number 16-240 Download PDF EDocketResults16-240), the customer’s case is still pending--along with a review of rural utilities' practices toward member-generated power.
Midwest Energy Frank Jossi reported last year in Minnesota regulators halt rural co-ops’ fixed charges for solar:
Minnesota’s rural distributed generation customers won a major victory this week when state regulators halted the practice by cooperatives of applying fixed charges for solar installations.
Regulators ruled June 9 that cooperatives must file requests for small power production tariffs with the Minnesota Public Utilities Commission, which makes the final determination on those fees. The commission ruled those fees must now be suspended until an investigation is completed.
Rural cooperatives lost their argument that the PUC had no jurisdiction in the matter of fixed charges for solar customers. Co-ops believed their boards would be the final arbiters of those charges.
“It’s a victory for good government and for good process,” said Brad Klein, an attorney for the Environmental Policy & Law Center. “This is an unusually strong statement from commissioners who saw that distributed generation customers don’t have a strong voice on the boards of directors of these co-ops.”
Attorney and Minnesota Solar Energy Industries Association development director David Shaffer represented two individuals who had brought complaints against their rural co-ops over the fees. “It was a near perfect decision for us,” he said. “We pretty much got everything we wanted.”
Jim Horan, legal counsel of the Minnesota Rural Electric Association, said the decision “was not unexpected.” MREA had believed ratemaking was more the purview of their boards and not the PUC, but the investigation the commission has ordered will seek to clarity those roles, he said.
The issue of extra fees being added to solar customers’ bills has become common throughout the country and in the Midwest. The rationale has been the fees cover the fixed cost of serving solar customers, but others argue they fail to account for benefits that distributed solar provides for the grid.
“We believe these types of proposals are motivated by a desire to chill and block distributed generation,” Shaffer said.
Last year the Minnesota legislature passed a law allowing co-ops to charge fees for distributed generation customers as long as they were “reasonable” and based on a cost-of-service study.
Since then 14 co-ops have added monthly fees ranging from $13 to $83. “That has chilled the market in coop territories,” he said. . . .
One part of the case remains unclear. Meeker Cooperative argued that the complaint brought by Keith Weber over fixed charges was in “bad faith” and “frivolous.” Had the commission ruled against him, he would have had to pay the utility’s attorney fees.
“We were concerned more broadly that if this was how co-ops would respond to customer complaints they would be afraid to come forward and contest these fees,” Klein said.
The commission did not vote on Weber’s case but indicated that he had not violated state statute involving briging cases against rural coops.
While Shaffer is pleased by the outcome the case is far from settled. The PUC “investigation is ongoing,” he said. “The fight is not over. The docket remains open. We won a big battle but the war is not over.”
If passed before the PUC meeting during which the PUC investigation will be heard (we're told it's in February though agendas aren't available online), Weber's case will be moot.
Given that there's a dispute resolution proceeding at the Commission, maybe legislative fiat isn't the way to go. Already, Erin Murphy, DFL-St. Paul, has pulled her name from the bill. Good for her.
We hope that checks and balances remain intact for cooperative utilities’ membership, as we have been contacted about this bill by individual rural utility members as well pro-clean energy organizers. Without due process and a place to appeal, there is little to stand in the way of a rural utility--frozen in long-term contracts with coal-fired generation providers, from banning qualifying solar facilities in their service territory and sticking consumers with the consequences of their decisions, even as the cost of renewable energy plummets.
It's the foxes guarding the co-ops, while plucking the chickens. We'll have more on problems in the bill on Monday. HF234 is likely to come to a vote on Tuesday this week in the Minnesota House.
Image: Cartoon by Ken Avidor for Bluestem Prairie.
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