Minnesota’s renewable energy initiatives have not been primarily funded by taxpayer dollars. Since 1994, a separate fund, the Renewable Development Account, has supported most of these programs, including subsidies, rebates, and incentives.
The Renewable Development Account was established as part of an agreement allowing Xcel Energy to build a nuclear waste storage facility near its Prairie Island nuclear plant. As part of the agreement, Xcel Energy is required by law to contribute annually to the fund for each cask of nuclear waste stored at both the Prairie Island and Monticello nuclear plants. Currently, Xcel’s annual contribution is about $30 million.
However, this funding could soon be eliminated.
Rep. Chris Swedzinski (R-Ghent) is sponsoring HF1738, a bill that would dissolve the Renewable Development Account and eliminate funding for several programs, including Xcel’s Solar Rewards program, community energy transition grants, and solar grants for public buildings. The bill passed the House Energy Finance and Policy Committee with an 8-7 party-line vote and is now under review by the House Ways and Means Committee.
Swedzinski explained that HF1738 aims to reduce electricity costs. “We don’t need to interfere with the market to decide which projects should be funded. Minnesotans should have control over how their money is spent, and it’s time for the Legislature to step back,” he said.
Originally, the account was used to fund renewable energy research and development, but since 2017, it has been a state fund for various renewable energy projects. These include the Prairie Island net-zero project, Granite Falls hydropower, community energy transition grants, solar programs for schools, and clean energy career training, among others. The account also supports initiatives like electric vehicle rebates, energy storage incentives, and a carbon pipeline study.
Rep. Katie Jones (DFL-Mpls) pointed out that the circumstances leading to the creation of the Renewable Development Account are still relevant. Nuclear waste continues to be stored at Prairie Island and Monticello, and there is still no federal plan for nuclear waste storage.
“I spoke with a senator who was involved in the 1994 agreement,” Jones said. “This was a compromise among many competing interests. If we remove one part of the deal, it could unravel the entire agreement.”
Rep. Paul Anderson (R-Starbuck) expressed support for the bill, acknowledging the program’s success but suggesting that all programs should eventually come to an end. “This has been a good program, but it’s time to move on,” he said.
Rep. Patty Acomb (DFL-Minnetonka), however, argued that the Renewable Development Account is more important than ever, particularly given the current uncertainties. “We can no longer rely on federal partnerships as we have in the past,” Acomb said. “Additionally, many of the grants that were expected from the Inflation Reduction Act are now being withheld.”
Acomb also noted that tariffs imposed by Canada in response to U.S. tariffs could increase energy costs in Minnesota. She stressed that many programs funded by the Renewable Development Account help to make electricity more affordable for Minnesotans.
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