Keeping Our Energy Options Open
Last Friday, the Council approved (on a 10-3 vote) my motion to bring forward 3 actions related to putting the question of becoming a municipal utility on the ballot in November. These actions set a public hearing date within the timeframe required by state law to get the matter of authorizing the City to become a municipal utility on the ballot in November. The specific actions are below the fold.
I have pushed this forward because I believe that now is the most appropriate time for the City of Minneapolis to consider forming a municipal energy utility.
Human beings are changing our climate. We are already seeing the impacts, including larger and more powerful storms. This morning, the Council unanimously passed a Climate Action Plan that commits us to work towards a 30% reduction in carbon emissions by 2030 - and I do not think even that aggressive goal is enough. I believe that future generations will judge those of us alive - and especially those of us in any position of political authority - chiefly on our response to this human-created crisis.
Our electrical grid is more fragile than it should be, and takes days to repair after the major storms that climate change is making more common. According to an Electric Power Research Institute report most electrical outages are due to problems with the local distribution system. Minneapolis may to have some of the oldest and most worn distribution infrastructure in the region. A modern, state-or-the-art distribution system is critical to the success of our businsesses and essential to their ability to keep and create good jobs in our city.
Each year the residents and businesses of Minneapolis pay $450 million for electricity and most of those dollars are leaving our community. Electricity rates continue to rise. We use more energy than we need to to get the services we want, like lights, heat and cooling, and too little of the energy we use is generated renewably. Most of our energy comes from coal, natural gas and nuclear, each with its own set of negative environmental impacts. Our energy providers only make as much progress on energy efficiency and renewable energy as the state legislature requires them to - and sometimes not even that much. If Minneapolis residents, businesses and elected officials disagree with their actions - like the decision to keep the Sherco coal plant on line, or to reduce the effectiveness of our building energy disclosure policy - our only recourse is to the Public Utilities Commission or legislature.
The status quo is not working.
Next year, the City's franchise agreements with Xcel and Centerpoint expire. For years, I have believed that we must take this opportunity to make real, tangible progress on the environmental, reliability, and affordability issues above. The franchise agreements have not helped us with these issues in the past. It is entirely possible that they will not be able to help us, until and unless the legislature changes state law to make them more flexible.
I believe that we will be in the best possible negotiating position next year if the voters of Minneapolis have given us another option, a possible exit from our current relationship with our monopoly energy providers.
And a decision by the Council to put this question on the ballot, and by the voters to approve it, will also give us the option to actually form a municipal utility.
Maybe, as some of my colleagues are already convinced (before any study has been completed), forming a municipal utility will not be possible or preferable. This is why I support being very clear with our goals and our commitments as we vote on whether to put this on the ballot. The City should only and will only create a municipal utility if we find, after an in-depth study, that we can:
- Provide energy services as or more affordably than the existing utilities. This means that we will not raise rates faster than the existing utilities have been.
- Provide energy services as or more reliably than the existing utilities. This means that we will have to be able to get the lights back on as or more quickly after a storm or other disruption - or, better yet, take steps to reduce the impact of storms on our electricity grid in the first place.
- Provide cleaner energy than the existing utilities. This means more efficiency and more renewable energy.
- Provide more local energy than the existing utilities. This means more solar right here in Minneapolis, and more wind close by. It also means more good jobs for Minneapolis residents.
I believe that this is possible. Other municipal utilities have cleared these hurdles. Municipal utilities have been shown, on average, to raise rates less quickly and get the lights back on more quickly after an outage. The municipal utility for Sacramento, California has an emission reduction target of ninety percent, more than three times what Minneapolis has committed to, and is on track to meeting that goal. They have installed more than ten times as much solar as our community has, enriching their local economy. The people of Boulder, Colorado, have authorized their city to look into creating a municipal utility. And the first reports are that it may be possible. The city of Winter Park, Florida has already gone through this process, and their energy affordability and reliability is improving markedly. It is possible.
The Energy Pathways study that the Council also voted to fund this morning will provide us some crucial, if not conclusive information on our two paths forward: improving our franchise agreements or moving forward with municipalization. Some of my colleagues are concerned that the timing is wrong, and believe that we should wait for this study to be finished before asking the voters for authorization to create a municipal utility. I disagree. I think the timing is just right. We will receive the preliminary results of the study before the election this fall, and the final results in January, just in time for the study and the ballot measure results to inform our franchise negotiations next year.
This is the time to be having this conversation, and I look forward to a very informative public hearing on August 1.
Here are the specific actions:
A. Set August 1, 2013 at 10:00AM as the date for a public hearing to consider authorizing the establishment of a municipal electrical utility and authorizing the City to own, operate, construct, and extend electric facilities and to purchase and acquire the property of any existing electrical public utility operating within the City of Minneapolis for the purpose of providing electrical and related services.
B. Set August 1, 2013 at 10:30 A.M. as the date for a public hearing to consider authorizing the establishment of a municipal gas utility and authorizing the City to own, operate, construct, and extend gas and similar facilities and to purchase and acquire the property of any existing gas public utility operating within the City of Minneapolis for the purpose of providing natural gas and similar services.
C. Direct the City Clerk's office to publish notice of each of these hearings.
Looking ahead, here are the major next steps in this process:August 1, 2013 - Starting at 10:00 the Committee of Whole/ Intergovernmental Relations Subcommittee holds a public hearing in authorization and potential acquisition of the electric and natural gas public utilities.
August 15, 2013 -Last regularly scheduled meeting of the Committee of the Whole/ Intergovernmental Relations Subcommittee to review and finalize a resolution/ballot question on potential acquisition of a utility. In addition to setting the ballot language, the City Council would need to direct the City Clerk to schedule and give notice of a special election for the purpose of submitting the question to the electorate. (The special election would be held in conjunction with the 2013 General Election on Nov. 5.). This would be referred for immediate consideration and action by the City Council at its next regular meeting (see below).
August 16, 2013 - Last regularly scheduled meeting of the City Council for action on a proposed resolution/ballot question prior to the statutory deadline for ballot questions. The City Council must approve ballot language for each question, in final form, prior to August 23rd. NOTE: Minn. Stat. § 216B.46 requires that the special election be held not less than 60 and not more than 120 days after the resolution adopted by the governing body.
November 5, 2013 - 2013 Municipal General Election and Special Election where the question becomes effective after being ratified by a majority of voters voting on the question.
If this ballot initiative passes, the City will be empowered to