Minnesotans paid $70 million in 2011 for green energy they didn’t need

posted at 11:46 am on April 19, 2012 by Ed Morrissey

In March, we found out that taxpayers in the state of Washington had to pay for wind power that never got produced.  Why should Minnesota be any different?  The industry group for Minnesota power distributors report that taxpayers in my state paid $70 million more than necessary for their electricity, thanks to mandates on distributors to buy from green-energy producers (via Rob Port):

Taxpayers already pay a high price to subsidize wind energy through billions in federal grants, loan guarantees and tax credits that prop up the “windustry”. Now the bill for state renewable energy mandates is coming due with hundreds of thousands of Minnesota electric co-op and utility customers picking up the tab.

Going green cost rural electric ratepayers in Minnesota more than $70 million last year, according to the Minnesota Rural Electric Association (MREA). The MREA represents about fifty mostly small, rural electric co-ops and utilities which serve more than 625,000 Minnesota homes and businesses.

“It’s an enormous subsidy. You have to add wind power, whether you need it or not,” said Mark Glaess, MREA executive director. “Right now we’re paying for wind we don’t need, we can’t use and can’t sell.”

In 2007, the Minnesota state legislature mandated that an ever-increasing percentage of power must come from green-energy sources, topping out at 25% in 2025.  That mandate, unlike in other states, included co-ops — which supply power not just to rural customers but also to suburban customers as well.  (I get my electricity from a co-op, for instance.)  The requirements pushed distributors into signing long-term deals to buy output in order to ensure compliance in outlying years — and those contracts got negotiated before the economic downturn that significantly damaged demand.

The result? Minnesota distributors are now on the hook to buy green power whether they can sell it or not.  Since they can’t sell at the predicted demand levels, they are producing less from traditional and cheaper sources, which means prices have had to go up:

The RES exists in a sort of price vacuum. No matter that coal-generated power costs considerably less than wind. Dozens of Minnesota co-ops are stuck with higher, pre-recession prices for surplus wind power which must be bought and distributed. The difference between what the wind power costs and what it resells for now adds up to tens of millions of dollars a year statewide with rural residents caught in the middle.

“It’s a well-intentioned law that did not contemplate the inexplicable law of unintended consequences because it never considered resource planning to meet energy load and demand. What happens when the load goes down? Our members still have to buy it,” Glaess said. “And we’re going to have to increase rates to pay for our incumbent coal generation, which is getting smacked by the EPA (Environmental Protection Agency).”

The Minnesota Public Utilities Commission (PUC) directed electric coops and utilities to report the cost to ratepayers of complying with the RES. The top three wind loss leaders in 2011 were Great River Energy ($35 million), Minnkota ($27.5 million) and Dairyland Power ($18.1 million in Minnesota and Wisconsin combined). That’s a steep increase from 2010, when Great River Energy (GRE) reported a $22 million loss on wind energy sales, while Minnkota reported a $28.2 million loss the previous year.

Spare us, please, from “well-intentioned” laws.  The legislature attempted to dictate market supply and demand, and it produced the failure that this kind of central planning always produces.  As a result, Minnesotans have to pay energy costs above current market levels at a time when their disposable income has become more and more restricted, thanks to price increases in gasoline and food.  It’s yet another demonstration of the folly of central planning.


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Smart Growth Minnesota, brought to you by liberal freaks of Uptown.

Bishop on April 19, 2012 at 11:49 AM

I hope this Green crap blows over soon…

PatriotRider on April 19, 2012 at 11:50 AM

Ed, is it time to move yet?

upinak on April 19, 2012 at 11:51 AM

“Right now we’re paying for wind we don’t need, we can’t use and can’t sell.”

Thanks to our windy president.

NoDonkey on April 19, 2012 at 11:52 AM

Ed you need to get your state in order…the prevailing wind carries things to Wisconsin (always bad, never good).

teejk on April 19, 2012 at 11:52 AM

Spare us, please, from “well-intentioned” laws. The legislature attempted to dictate market supply and demand, and it produced the failure that this kind of central planning always produces. As a result, Minnesotans have to pay energy costs above current market levels at a time when their disposable income has become more and more restricted, thanks to price increases in gasoline and food. It’s yet another demonstration of the folly of central planning.

And I’m still mystified why the Pawlenty campaign never took off. It’s a good thing Willard Mittens Romney VII isn’t known for trying to suck up to leftists, with nonsense such as this.

Oh wait…

MNHawk on April 19, 2012 at 11:52 AM

No worries. Al Franken will fix it. I realize it is the state legislature who is the guilty party here, but Minnesota, more than any other state that comes to mind, have elected some pretty nutty characters to represent them. This is but one example of the consequences.

Syd B. on April 19, 2012 at 11:53 AM

Atlas Shrugged is coming more and more alive each day. Where’s John Galt?

search4truth on April 19, 2012 at 11:54 AM

Once again, the voters of Minnesota get what they deserve. As a New Yorker whose governor is a flaming liberal but thankfully not a high-functioning moron, I can safely point and say: Hah hah!

KingGold on April 19, 2012 at 11:54 AM

Has anyone anywhere bother to look at what this “Green Energy” bullcr@p has done to Spain’s economy? Insanity is defined as doing the same thing over and over expecting different results. Spain, go look at what the “Green Energy” did to Spain…

SWalker on April 19, 2012 at 11:54 AM

green= Taking $ from productive members of society and spreading it to those who are less productive.

newportmike on April 19, 2012 at 11:54 AM

No worries. Al Franken will fix it. I realize it is the state legislature who is the guilty party here, but Minnesota, more than any other state that comes to mind, have elected some pretty nutty characters to represent them. This is but one example of the consequences.

Syd B. on April 19, 2012 at 11:53 AM

Seems to me Al Franken stole his Senate seat, you can’t blame that on the voters.

NoDonkey on April 19, 2012 at 11:56 AM

Thanks to our windy president.

NoDonkey on April 19, 2012 at 11:52 AM

Wind blows. obambi knows blow.

VegasRick on April 19, 2012 at 11:57 AM

“It’s a well-intentioned law that did not contemplate the inexplicable law of unintended consequences because it never considered resource planning to meet energy load and demand.

It’s not “well intentioned” when you deliberately ignore the law of supply and demand. If you’re going to enact these laws you have to think them through first.

rbj on April 19, 2012 at 11:57 AM

Wind blows. obambi knows blow.

VegasRick on April 19, 2012 at 11:57 AM

So, you’re saying we could solve all of our energy problems by having Obama give his speeches in front of windmills?

SWalker on April 19, 2012 at 11:59 AM

Investment!

forest on April 19, 2012 at 11:59 AM

Much of this is thanks to Governor (Green) Tim Pawlenty.

It was a DFL majority legislature but Governor Green was all to willing to sign the law requiring Renewables. Now when I drive past the windmill at the local high school and watch it not spinning about 4 days out of 5 I wonder how much that boondoggle is costing us.

jpmn on April 19, 2012 at 12:01 PM

Seems to me Al Franken stole his Senate seat, you can’t blame that on the voters.

NoDonkey on April 19, 2012 at 11:56 AM

Blame it on the Lizard People.

Steve Z on April 19, 2012 at 12:01 PM

Thanks to our windy president.

NoDonkey on April 19, 2012 at 11:52 AM
Wind blows. obambi knows blow.

VegasRick on April 19, 2012 at 11:57 AM

Obama’s able to multi-task, he can both suck and blow.

NoDonkey on April 19, 2012 at 12:02 PM

Ed what is the overall cost per kilowatt after everything is bundled into the overall total on the bill?

karenhasfreedom on April 19, 2012 at 12:02 PM

“Spare us, please, from “well-intentioned” laws.”

I’m getting real tired of politicians ‘good intentions’

Intrepid767 on April 19, 2012 at 12:03 PM

It’s a well-intentioned law that did not contemplate the inexplicable law of unintended consequences because it never considered ….

That about sums up the entire liberal: track record, mindset, policy outcomes….

What a bunch of dopes. We pay them to destroy us. I guess it’s nice work if you can get it.

johnnybgood on April 19, 2012 at 12:03 PM

Getting a high profit contract to sell something that has little or no value to anyone is a really good gig if you can get it.

Curtiss on April 19, 2012 at 12:06 PM

Minnesotans paid $70 million in 2011 for green energy they didn’t need

Liberalism is Killing the State of Minnesota.

Minnesota is a beautiful state—-a “Land of 10,000 Lakes”— but, unfortunately the fetid stink of rotten liberalism is choking and smothering everything in that state….

BigSven on April 19, 2012 at 12:06 PM

OT: Pilot unresponsive; Plane circling over Gulf of Mexico

This reminds me of the Obama economy

faraway on April 19, 2012 at 12:06 PM

If you’re going to enact these laws you have to think them through first.

rbj on April 19, 2012 at 11:57 AM

This is Minnesota, land of Dayton, Franken and Ellison; thinking things through has nothing to do with it.

Bishop on April 19, 2012 at 12:08 PM

Ed, is it time to move yet?

upinak on April 19, 2012 at 11:51 AM

Beck’s got a big spread in Big D, give him a buzz.

msupertas on April 19, 2012 at 12:09 PM

I’m getting real tired of politicians ‘good intentions’

Intrepid767 on April 19, 2012 at 12:03 PM

Isn’t there a road somewhere paved with this? I want off the bus NOW.

VietVet_Dave on April 19, 2012 at 12:09 PM

That money could have been better applied to the new Vikings stadium.

NoDonkey on April 19, 2012 at 12:10 PM

This article hits on some important topics, but doesn’t really address the greater underlying issue: Wind power is very unpredictable.

Currently, when power companies buy power from a wind farm, they sign up to receive a certain amount of power and have to pay for it whether not they have the ability to utilize it. This is what the article means when it says

To meet the state’s escalating demands, rural electric co-ops and utilities locked in long-term “take or pay” contracts to purchase power from wind farms

However, those aren’t some special contracts, that’s the industry norm.

The issue with wind power is that within a 4 or 5 hour span a 500MW wind farm could go from outputting 10MW to 400MW to 100MW and then back to 300MW. It is very unpredictable in the short term (say 2-4 hours) and thus it is very difficult for electric companies to ramp their nuclear, coal, or natural gas plants quickly enough to accommodate the changes in wind power. Thus they end up generating too much power and the wind power isn’t utilized, but they still have to pay for it.

Until the power output from wind farms can be better predicted (which is something companies are working on, but is proving to be very difficult) the only other solution to this issue is an upgraded national power grid which would resolve the issue entirely. In a logical world, the stimulus would have actually helped to fund that.

strictnein on April 19, 2012 at 12:10 PM

Congratulations! I bet you paid for green energy in Californa too — and it’s a good bet you didn’t need that either.

J.E. Dyer on April 19, 2012 at 12:11 PM

Wind power simply does not work.

It’s a boondoggle, a way to separate ever more money from taxpayers into crony capitalist’s pockets – and the politicians.

Rebar on April 19, 2012 at 12:17 PM

“green= Taking $ from productive members of society and” giving it to big Democrat donors.

RADIOONE on April 19, 2012 at 12:18 PM

“Right now we’re paying for wind we don’t need, we can’t use and can’t sell.”

And I bet that warehousing the surplus is really expensive! ;0

I’ll take it at face value that the law was good-intentioned. However the one theme it seems for and green discussion seems to be that the process/product is more expensive than traditional equivilents. Green advocates then lecture us on “investment.” As if being forced to pay more for stuff is an investment in anything other than the bank accounts of the government selected winners who “coincidentally” all seem to be big contributors to Democrats.

Happy Nomad on April 19, 2012 at 12:18 PM

Green (as in profits) is one thing that “green” energy will never produce. I prefer to call it GREED ENERGY. In this time of near economic collapse with our government having unfunded liabilities well past the point of the money EVEN EXISTING to ever pay for only greedy greens insist on wasting our money on this dead end luddite crap.

wildcat72 on April 19, 2012 at 12:19 PM

I’m getting real tired of politicians ‘good intentions’

‘Good intentions’ is gub-speak for didn’t/doesn’t work.

LetsBfrank on April 19, 2012 at 12:19 PM

“Blowin’ in the wind.” More like ” Twisting in the wind.”

Bmore on April 19, 2012 at 12:23 PM

OT: Pilot unresponsive; Plane circling over Gulf of Mexico

This reminds me of the Obama economy

faraway on April 19, 2012 at 12:06 PM

Yeah, but at least that plane is still up.

Bmore on April 19, 2012 at 12:24 PM

Has anyone anywhere bother to look at what this “Green Energy” bullcr@p has done to Spain’s economy?
SWalker on April 19, 2012 at 11:54 AM

We are all Spaniards now.

petefrt on April 19, 2012 at 12:29 PM

OT: Pilot unresponsive; Plane circling over Gulf of Mexico

This reminds me of the Obama economy

faraway on April 19, 2012 at 12:06 PM

Update: Plane has gone down approx 170 miles off coast of Florida.

Syd B. on April 19, 2012 at 12:31 PM

Minnesota wind power?? Where have I heard that phrase before??

TugboatPhil on April 19, 2012 at 12:33 PM

‘Good intentions’ is gub-speak for didn’t/doesn’t work.

LetsBfrank on April 19, 2012 at 12:19 PM

Depends on which intention you are talking about the real one or the public one.

From the way it was structured to protect the owners, I have no doubt that Obama’s intent with Solyndra was to reward poltical cronies, knowing full well that the company would ultimately fail. Same holds true with the auto bailout. The intent was never to help govt. motors. The intent was to find a way to reward the UAW for their support.

Happy Nomad on April 19, 2012 at 12:37 PM

Long, but excellent, article describing the fallacy of storage for renewables.

http://physics.ucsd.edu/do-the-math/2011/11/pump-up-the-storage/

For when the greenies push it.

WryTrvllr on April 19, 2012 at 12:43 PM

…the only other solution to this issue is an upgraded national power grid which would resolve the issue entirely. In a logical world, the stimulus would have actually helped to fund that.

strictnein on April 19, 2012 at 12:10 PM

The “upgraded national power grid” is pure fantasy. There is NO successful implementations of such a thing…even on a small scale. It won’t work, because the very idea behind it…that you can always find a place to economically ship unused power to someone who needs it…is flawed.

And the main problem with both wind and solar is that line losses will eat up much of any power they generate, because (unlike other power plants) they are almost NEVER located near the power users: this is a matter of the physics of power transmission, and a “grid” won’t fix it!!!

“Green Energy” producers always try to pawn off the power reliability and power transmission problems THEY CREATE on someone else. The fact is that windmills are a 100+ year old technology which were long ago abandoned for good reasons. And the most efficient, cost-effective way to use SOLAR is to burn coal!!!

Left-wing eco-fascist wishes cannot change reality.

landlines on April 19, 2012 at 12:48 PM

So, who got paid on this one?

KOOLAID2 on April 19, 2012 at 12:58 PM

Unfortunately the wind power mandate came under the governorship of Tim Pawlenty as well as a an ethanol mandate for 20% ethanol blend of gasoline. [Pending approval of the EPA].

Dasher on April 19, 2012 at 1:01 PM

Minnesota you voted for em, now you get to pay for their liberal policies:

Al Franken
Jesse Ventura
Paul Wellstone
Walter Mondale

socialism is for the people, not the socialists!

burserker on April 19, 2012 at 1:17 PM

Good intentions – bet you the developers were libs.

Final resuls – in addition to all above, rotting rusting hulks defacing the landscape, as the windmills have expensive mechanical issues that often aren’t repaired. Here in Kern County, CA, they are ubiquitous.

The green is $, for political clout.

jodetoad on April 19, 2012 at 1:29 PM

Smart Growth Minnesota, brought to you by liberal freaks of Uptown.

Bishop on April 19, 2012 at 11:49 AM

And Kenwood…and greater Minneapolis…and Hennepin County…and St. Paul…and Ramsey County…and the Iron Range….
Wait…that only leaves Ed, Marcia, Mitch, my brother and me.

Amendment X on April 19, 2012 at 1:30 PM

“The wind blows free. What do you charge?”-60′s Jr. High chop

mrt721 on April 19, 2012 at 1:32 PM

Thanks for the info, Ed. I get my electricity from a co-op that is supplied by Great River Energy. Every month in my bill the CEO is always talking thru his a$$ trying to explain away rising costs.

I hate co-ops. They claim to be saving you money and then after you are with them for so many years, you are supposed to receive some of those savings back in a check. OK, where is it?

I’ve said this before and I’m saying it again, I can’t wait until I can get out of here. I can’t sell my house, that’s why I haven’t left yet.

Mirimichi on April 19, 2012 at 1:38 PM

Minnesota is a beautiful state—-a “Land of 10,000 Lakes”— but, unfortunately the fetid stink of rotten liberalism is choking and smothering everything in that state….
BigSven on April 19, 2012 at 12:06 PM

In addition to my above excellent point…..wanted to add that the accompanying Hotair photo of that huge panoramic of windmills, is an absolutely horrid, beyond belief, abomination of the visual pollution in the extreme, that lefties are foisting upon America.

These windmill panoramas will destroy the beauty of Minnesota and America..FOR WHAT and WHY??? IT’s Gawd Fk’n Awful!!

BigSven on April 19, 2012 at 1:56 PM

No wonder they can’t afford a new football stadium…

cartooner on April 19, 2012 at 2:20 PM

Flip side

won’t have to set out the decoys anymore!!!!!

WryTrvllr on April 19, 2012 at 2:27 PM

Top electric rate in Northern MN (Minnkota) was $0.065/KWH in December 2006. In December 2011 it was $0.113/KWH. That’s 74% in 5 years. I’m afraid that it’s going to be worse by the time the EPA gets done with the coal generation that supplies our needs very nicely.

mikewor on April 19, 2012 at 2:28 PM

Ed,
I left Minnesota right after Quie beat Perpich.
The budget deficits then were at least as bad then as now, except that the health care cost to Mn taxpayers have gotten steadily worse.
What is that impact?

OkieDoc on April 19, 2012 at 2:29 PM

Top electric rate in Northern MN (Minnkota) was $0.065/KWH in December 2006. In December 2011 it was $0.113/KWH.

Good think you have mild weather up there.

NoDonkey on April 19, 2012 at 2:48 PM

WHAT and WHY??? IT’s Gawd Fk’n Awful!!

BigSven on April 19, 2012 at 1:56 PM

They’re doing it all for the birds./

Bmore on April 19, 2012 at 2:50 PM

Unfortunately we’re heading down the same path in Colorado. A few years ago the libs from Boulder and Denver got a ballot issue passed to force the use of green energy – very similar to Minnesota. We’re also paying the price for that useless boondoggle.

dentarthurdent on April 19, 2012 at 2:51 PM

In addition to my above excellent point…..wanted to add that the accompanying Hotair photo of that huge panoramic of windmills, is an absolutely horrid, beyond belief, abomination of the visual pollution in the extreme, that lefties are foisting upon America.

These windmill panoramas will destroy the beauty of Minnesota and America..FOR WHAT and WHY??? IT’s Gawd Fk’n Awful!!

BigSven on April 19, 2012 at 1:56 PM

Drive through west central IA on I-80 and observe the miles long pollution of beautiful IA landscape. South side of the interstate around the Adair exit. It is sickening.

a capella on April 19, 2012 at 2:51 PM

I wish someone would produce a map of the US showing just how many windmills and solar farms it would take to produce the energy we need at current levels. Sometimes a picture is worth a buck fifty given today’s economy.

Kissmygrits on April 19, 2012 at 3:11 PM

Another example of Cap and Trade implemented poorly.

Mitt supports Cap and Trade
Obama supports Cap and Trade

Steveangell on April 19, 2012 at 3:11 PM

In March, we found out that taxpayers in the state of Washington had to pay for wind power that never got produced. Why should Minnesota be any different?…

Welcome to my world, Ed.

My collie says:

We know people here in Washington state whose job is to plan for and maintain the power grid. People who are forced to deal with the likes of Senators Cantwell and Murray on these types of issues. Believe me, the frustration level with liberal policies/thinking has long since surpassed the boiling point. The projected end result for businesses and the consumer in this state will be catastrophic.

As they say in my business (aerospace),
“Ladies and gentlemen, please brace for impact.”

CyberCipher on April 19, 2012 at 3:13 PM

I’ll chime in…My Coop newsletter had a good article on it several months ago…wind makes some sense in places where it blows all the time (can’t imagine Minnesota is in that group).

It made sense a few miles off the east shore of Lake Michigan and similar venues like Cape Cod but on the latter one of the Kennedy boys fought it for 10 years (NIMBY). Initial cost is high as is maintenance (it’s a GE thing).

And I had to laugh at 12c/kwh…I “escaped NY” last year and I think the going rate for ConEd in Westchester County was 24c/kwh.

teejk on April 19, 2012 at 3:37 PM

This is so ironic. Almost the exact opposite occured during the depression. Many, probably most farms at the time were not on the electric grid. They usually had one or more small wind mills to pump water and provide a limited amount of electricity for other purposes. One of the signature policies of the New Deal was rural electrification. In order to get on the grid, it was required that all of these personal wind mills be destroyed, not just disconected. In a few years they were all junked.

burt on April 19, 2012 at 3:51 PM

teejk on April 19, 2012 at 3:37 PM

I guess we’ve still got it pretty good in Colorado Springs – base electricity access charge plus electric supply per kWh is $.0918.

dentarthurdent on April 19, 2012 at 3:53 PM

burt on April 19, 2012 at 3:51 PM

Good ole gubmint – watch out when they show up to help.

dentarthurdent on April 19, 2012 at 3:54 PM

So, we here in CA are told to breath out towards the east at least twice a day. Always wondered why.

sdbatboy on April 19, 2012 at 3:58 PM

So, we here in CA are told to breath out towards the east at least twice a day. Always wondered why.

sdbatboy on April 19, 2012 at 3:58 PM

I’m surprised you’re still allowed to exhale – all that CO2 and such….

dentarthurdent on April 19, 2012 at 4:23 PM

dentarthurdent on April 19, 2012 at 3:53 PM

both coasts use a lot of energy but don’t want to generate it (no matter how you do it, it’s never pretty)…

guess that only shows what the “elite” thinks of the rest of the country. I pray every night for the “big shake” that sends them to south america.

teejk on April 19, 2012 at 4:51 PM

Mirimichi on April 19, 2012 at 1:38 PM

do some math Mir…

around here, my Coop still provides the cheapest electricity in the state by far. fortunately they are too small to be bought out by the big utilities.

teejk on April 19, 2012 at 4:58 PM

Say “Thank You” Minnesota. You get what you deserve. After all, you elected Al Frankin and that other JOKE of a governor!?!

Colatteral Damage on April 20, 2012 at 5:59 PM

Kinda tells you ALL you need to know about Minnesota.

Colatteral Damage on April 20, 2012 at 6:00 PM