We all share the common goal of creating a healthy economy that will raise standards of living for future generations of Minnesotans. We all know the impact of regulatory and tax policies on our economy. But energy policy is often neglected when we talk about moving our economy forward.
Nearly everything we do is impacted by energy costs. We commute to work, heat and cool our homes, buy food and clothing that have to be shipped by air, water, rail and/or roads. Your computer, iPad and smart phone don’t function without a supply of electricity at your fingertips. Suffice it to say that keeping energy costs down will save consumers and businesses significant money, thereby improving standards of living and quality of life. That is why we need a governor who understands the issues, and is prepared to implement policies that make low cost energy available to all Minnesotans.
What should policymakers consider when writing energy policy? To me the answer is quite simple. We should create an environment in which competition in the private sector will flourish. Competition and innovation will result in a dependable, low cost energy supply that facilitates economic growth. Policymakers should not favor one kind of power generation over another. Rather, market forces should dictate how we generate sufficient energy to meet an ever-growing demand.
Unfortunately, over the last several years our energy policy has been set by people from both political parties that have favored politically correct sources of energy that require subsidies because they are not economically viable. Hardworking taxpayers have been forced to support companies and technology that waste our money, instead of competing in the market. This has harmed taxpayers and driven up the cost of energy for homes, hospitals, schools and businesses.
Each year Minnesotans consume approximately 67 million megawatt hours of electricity at an annual cost in excess of $6 billion. Public utilities are heavily regulated and enjoy a monopoly. You cannot purchase power from a competitor. Rates are set by the government (public utilities) or the members (cooperatives).
Minnesota electricity rates (11.29 cents/kilowatt-hour) are below the national average (11.61), but higher than the regional average (10.04). Our region includes Iowa, Kansas, Missouri, Nebraska, North Dakota and South Dakota. And unfortunately we are becoming less competitive, rather than more. Between 2006 and 2013, electric rates in Minnesota increased by 32.3%. This compares to an increase of 27.4% in the region and only 9.8% across the nation. If this trend continues, energy costs will slow growth and diminish our competitiveness.
In 2007, Minnesota passed into law renewable energy standards that are among the strictest in the nation. Only California, New York and Connecticut have more stringent standards. Unfortunately, Governor Dayton and the Democrats in the legislature added to this burden during the 2013 legislative session.
There are two principles that should guide policymakers when setting energy policy.
-First, markets should determine generation sources, not politicians and bureaucrats.
-Second, public utilities should not be given a monopoly. Consumers should have choices.
Have you ever asked yourself why some sources of generation such as solar and wind are not used for base-load energy unless they are subsidized with taxpayer dollars? It is because they are not reliable, cost effective methods of generation. Taxpayers and energy consumers should not be forced to spend their hard earned dollars supporting crony capitalism. For too long, Minnesota energy policy has focused on special interests, not the interests of Minnesotans.
Oil, clean coal and natural gas are plentiful, and are still the most efficient sources of energy available to us at this time. New technologies provide greater access to these resources. Natural gas in particular is clean, efficient, and readily available. Oil also continues to be the best source of low cost efficient energy. North Dakota is now the number two oil producing state in the nation, second only to Texas. We have oil and gas in this country, and Minnesota should take advantage of its availability.
There is one drawback to ending our subsidy programs. Many well-intentioned farmers in our state now rely on income from corn production, in part because of our ethanol program. We must be cognizant of this situation, and make sure we back away from current energy policy with a minimum of dislocation to farmers and agricultural related businesses that are dependent or partially dependent upon the ethanol program.
Minnesota should join the 17 states and the District of Columbia that allow private retailers to sell electricity. This competition among utilities drives down prices, and creates market efficiencies. States that are as politically diverse as Connecticut, Illinois and Texas are among those allowing competition. This is not a partisan issue, and I would welcome support from lawmakers throughout the political spectrum. Lower cost energy will help all Minnesotans, but will provide a the most benefit to middle and lower income households.
Minnesota currently houses nuclear waste that should have been removed by the federal government. As governor, I would pressure Washington, D.C. politicians to keep their promise. I believe nuclear energy may well be the long-term future of energy. But we must first know that we have the ability to dispose of the waste in a way that does not put our population at risk.
The Federal government is standing in the way of the Keystone XL pipeline. As Governor, I would work with representatives in Washington, D.C. to move the project forward providing jobs, and lowering the cost of energy for families across the country and here at home in Minnesota.
Canada is an important trading partner for Minnesota. The province of Manitoba has abundant hydro-electricity that is clean, renewable, and affordable. As governor, I would develop energy policies that would strengthen our trading relationships with our friends to the north while meeting our energy needs for Minnesota.