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The CURA publications library is currently being digitized by the University of Minnesota Digital Conservancy. When the project is complete, the entire CURA publications library will be online and fully searchable. Unfortunately, during this process we are not able to honor individual requests for publications . Additionally, we no longer have physical copies of publications to send out.

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Renewable Electricity Policy in Minnesota: Can We Change the Subject?

Kildegaard, Arne.

With its substantial wind and agricultural resources, Minnesota is well-positioned to develop renewable sources of energy. However, the transition to a renewable energy economy ultimately depends on well-designed competitive and regulatory structures that allow renewable and nonrenewable energy sources to compete on a level playing field. The 1978 Public Utility Regulatory Policy Act (PURPA) provided an important step in this direction. The act requires utilities to buy back electric power from certain qualifying utilities (primarily nonutility energy generators using renewable energy technologies), providing direct access to the electric grid. It also requires utilities to pay these facilities for 'avoided costs'ラthat is, all costs that the qualifying facilities' electricity production enabled the utility to avoid. Unfortunately, avoided costs are easy to obfuscate, and a clear inventive exists for utilities to underreport these costs. To the extent that utilities' offer-rates to buy back electricity are based on calculations that understate the true avoided costs, the renewable energy industry is placed at a decided disadvantage. This article outlines the major contours of Minnesota's state policy with respect to renewable electricity and argues for a subtle but fundamental change in emphasis - away from quantitative mandates and toward a European model of feed-in tariffs, which obligate grid operators to pay a posted minimum price for all energy purchased from renewable sources. It also presents a case study of the recent distributed generation tariff proceeding before the Minnesota Public Utilities Commission, illustrating some of the vexing access problems that independent renewable energy generators face under the current regulatory framework.

CURA Reporter
Publication date: 
Minneapolis: Center for Urban and Regional Affairs, University of Minnesota.
Supported by a grant from the Faculty Interactive Research Program (FIRP) at the Center for Urban and Regional Affairs (CURA), University of Minnesota.
36 (4): 3-8
Online availability
Download from CURA: 
CURA call number: 
Reporter 36 (4)

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