By - Michael Drost

Minnesota OKs industrial customer rate changes, net-metering fees

Energize Weekly, June 24, 2015

Large industrial customers in Minnesota will soon get a rate break while municipal utilities and co-ops can start charging solar customers to use the electricity grid, according to a new comprehensive energy bill signed into law last week.

The legislation would allow large industrial customers, including steel mills, paper mills, and mining companies to apply for a break in their electricity rates, while residential customers will likely have to pay more. Industry representatives say that the change is about fairness.

“For years, our industrial customers have been subsidizing our residential customers,” said Amy Rutledge, manager of corporate communications for Minnesota Power, to Minnesota Public Radio News (MPR). “This new law brings things back into balance.”

Managers of large industrial sites say they experienced sharp increases in electricity rates between 2014 and 2015. Larry Sutherland, general manager of Minnesota ore operations at U.S. Steel, told MPR that mining companies such as his cannot afford the rates with steel prices going down.

“My electrical increase across Minnesota ore went up $13.2 million,” Sutherland said. “That’s approximately 60 cents a produced ton of taconite. That’s a huge increase year on year just on energy.”

It is unclear what the rate decreases for industrial customers will be, as all proposed rate decreases will have to go through a local utility, who will then ask the rate be approved by the Minnesota Public Utilities Commission.

The law will also allow municipal utilities and co-ops starting July 1 to start charging a “reasonable and appropriate” fee to solar customers who are part of their electrical grid system. This is the first time the Minnesota legislature has addressed the concept of “net metering”, where utilities purchase energy from customers who install solar panels or wind turbines on their property.

Opponents of the measure say that the change will discourage investment in clean energy, while supporters say that under the previous rules solar customers were able to reap the benefits of integrating rooftop solar systems without paying to use the grid, resulting in higher rates for non-solar customers.

“Under the current system, people who have distributed generation, solar panels on the roof or their own personal windmills, they’re able to use the grid without charge and this means higher rates for other consumers,” said Minnesota State Representative Pat Garofalo (R-Farmington). “We fixed that so it will no longer be a problem moving forward.”

Current net-metering customers won’t be impacted by the law, nor does the law apply to customers of the state’s largest utility, Xcel Energy.

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