HomeMy WebLinkAbout2014-06-12 PacketDRAFT MINUTES
CITY OF EDINA MINNESOTA
ENERGY & ENVIRONMENT COMMISSION
EDINA CITY HALL COMMUNITY ROOM
Thursday June 12, 2014
7:03 PM
I. CALL TO ORDER 7:03p.m.
11. ROLL CALL Answering Roll Call was Bale, Glahn, Gubrud, Howard, Kostuch, Latham, Sokol, Thompson, and Chair
Heer.
Late Arrival: Rudnicki, Sierks, Waddick, Zarrin
Staff Present: Ross Bintner and Rebecca Foster
III. APPROVAL OF MEETING AGENDA
Motion made by Member Gubrud and seconded by Member Kostuch to approve the Meeting Agenda.
Motion carried unanimously.
Member Zarrin arrived at 7:04p.m.
IV. ADOPTION OF CONSENT AGENDA
A. Minutes
B. Attendance report and roster
C. Workgroup list and minutes
Member Waddick arrived at 7:07p.m.
Motion made by Member Kostuch and "seconded by Member Gubrud to approve the Consent Agenda.
Motion carried unanimously.
V. COMMUNITY COMMENT... No Comment.
VI. REPORTS AND RECOMMENDATIONS
A. Building Energy Efficiency Subcommittee (Bill Sierks / Tim Barnes). Member Sierks gave an update
saying the subcommittee will meet a company that's familiar with architecture and financing to possibly
create a proposal to do deeper energy audits on city facilities.
B. Local Food Working Group. Member Latham recapped what was discussed at the Council Work Session.
The bees will change from a 10' to 20' setback. The appeal period of 30 days will be deleted, but you
have to live within 200' of hive. A registration can be revoked due to means of nuisance or a honey bee
anaphylaxis note from a doctor. A resident can't sell honey from their home. Member Latham will add
the state's pesticide regulations.
Motion made by Member Latham and seconded by Member Gubrud to accept report as amended with
addition of pesticides. Motion carried unanimously.
3
VII. CORRESPONDENCE & PETITIONS
A. Community Solar— Email. Mr. Bintner, Commissioners Thompson, Glahn, and Gubrud will research how
the city will organize a contract around community solar. Commissioners Thompson and Howard will
have conflict of interests due to Cool Planet.
B. Pepin Plastic Bags — Email. Commissioner Gubrud said that there were 15 attendees at the movie "Bag
It". Member Latham said that plastic bags can be recycled, the reusable bags are becoming unsanitary,
and the negativity produced against the people promoting the cause of banning plastic bags. It's also
not apart of the Green Step Program. Member Zarrin suggested education is needed on recycling plastic
bags.
Motion made by Member Latham and seconded by Chair Heer to table banning plastic bags until the EEC does
their 2015 work plan, and then if a commissioner wishes to put this forward as part of the work plan, it would
be voted on and prioritized along with anything else we can possibly do. Motion carried unanimously.
Member Rudnick! arrived at 7:28p.m.
Member Sierks arrived at 7:31p.m.
C. SHERCO — Email. A letter from the Sierra Club said the Xcel:Energy SHERCO coal fire power plant in
Becker needs to be shut down, but Xcel wants to keep running them, and the email is looking for cities
to support it due to the state clean power plant. The EEC will wait to make a consideration.
D. Iyer Solar — Email. Information only.
E. Plunkett Latham Green Step Cities — Email. Member Latham is asking each Commissioner to review
their Green Steps and to look for new ones to add to our work plan. Also, the commission needs to
keep the report updated especially when the city receives awards. May 15Y is the deadline for updates to
be entered. Mr. Bintner will add this to the March agenda for review.
VIII. CHAIR AND COMMISSION MEMBER COMMENTS
A. June 3 CC/EEC Meeting Discussion. Chair Heer said the Bee and Chicken ordinance was a good
discussion. The Chapter 10 Green House Gas discussion didn't send a clear direction of outcome for the
Commissioners. The Business Recycling was a good discussion. The Commissioners discussed the
possibility of meeting twice a year with the Council and give a brief overview and then discuss one
specific topic.
B. Building Energy Efficiency Subcommittee. Discussed earlier.
C. Business Recycling Working Group. No Comment.
D. City Environmental Considerations Subcommittee. Member Kostuch gave an update on the change
request form for the 2015/19 CIP. The form will help when making capital requests for city employees
to think about the environment when they make their purchases. Commissioner Kostuch will follow up
with Mr. Roggeman in the late Fall to see how the new environmental section of the CIP was utilized.
E. Community Solar Subcommittee. Member Thompson said they visited the Public Works roof to possibly
install solar panels of 150 kilowatt to 300 kilowatt. The roof is nice, flat and less than 5yrs old. Member
Sierks said the city could do nothing, make their roof available for residents to purchase panels or
purchase up to 40% for themselves. The next step is to review the legal requirements for the City to
enter a 25-30yr lease, what kind of bid needed and what the City's responsibility will be. The EEC will
write an Advisory Communication and will review it in July.
F. Education Outreach Working Group. Member Gubrud gave an update on the July 4th parade planning.
The Working Group will postpone their summer movie due to low attendance. The Forum topic for next
year could be the Colony Collapse Disorder from U of M.
G. Home Energy Squad Subcommittee. Member Gubrud reported that all of the reduced visits have been
sold.
Members Sierks excused himself from the meeting at 8:57p.m.
H. Recycling and Solid Waste Working Group. No Report.
I. Student Subcommittee. No Report.
J. Water Quality Working Group. Member Waddick said the group is ready to stencil the storm drains and
are doing a test on June 23rd. While the group is stenciling, they are going to educate the residents, if
they are outside. She also suggested showing a Watershed movie.
K. 2014 EEC Summary and Schedule. The Bee & Chicken ordinance and Second Community Garden will be
added to the summary.
IX. STAFF COMMENTS
A. June 3 advisory communications. Mr. Bintner said the Council reviewed them, but didn't take any action.
B. 2014 Great Plains City Energy Competitiveness Group. Mr. Bintner would like to bring in a guest speaker
for the EEC and Planning Commission to educate on more energy efficiency.
C. Sports Dome. Mr. Bintner said they will be buying some energy efficiencies for the Dome.
D. Speak Up Edina. Scott Neal the City Manager decides on the monthly topics.
E. EEC Budget Summary. Mr. Bintner gave an update on the Budget. $10,197 was spent in 2013 over
which included staff personal, commodities (ads, print, food) and Contractual Services (Home Energy
Squad, Regional Indicators). There's $945 left of the 2014 budget.
F. Residential Building Permit Review. Mr. Bintner is fixing the building permit review process and it will
include better water quality standards.
G. Edina To Go. Mr. Bintner announced the new mobile report a problem application.
There being no further business on the Commission Agenda, Chair Heer declared the meeting adjourned at 9:18p.m.
Motion made by Member Glahn and seconded by Member Kostuch to adjourn meeting. Motion carried unanimously.
Respectfully submitted,
Rebecca Foster
GIS Administrator
Liaisons: Report attendance monthly and attach this report to the Commission minutes for the packet.
Do not enter numbers into the last two columns. Meeting numbers & attendance percentages will calculate automatically.
INSTRUCTIONS: Counted as Meetina Held (ON MEETINGS' LINE) Attendance Recorded (ON MEMBER'S LINEI
Regular Meeting w/Quorum Type "1" under the month on the meetings' line. Type "1" under the month for each attending member.
Regular Meeting w/o Quorum Type 1" under the month on the meetings' line. Type "1" under the month for each attending member.
Joint Work Session Type 1" under "Work Session" on the meetings' line. Type 1" under "Work Session" for each attending member.
Rescheduled Meeting' Type "1" under the month on the meetings' line. Type 1" under the month for each attending member.
Cancelled Meeting Type "1" under the month on the meetings' line. Type 1" under the month for ALL members.
Special Meeting There is no number typed on the meetings' line. There is no number typed on the members' lines.
'A rescheduled meeting occurs when members are notified of a new meeting date/time at a prior meeting. If shorter notice is
given, the previously -scheduled meeting is considered to have been cancelled and replaced with a special meeting.
ENERGY
& ENVIRONMENT COMMISSION
NAME
TERM
J F
M
A
M
J d
AlS O N D Work Session Work Session 1#0Wills. 60"
awrtce%
Meetings/Work Sessions
1 1
1
1
1
1 0
0 0 0 0 0 1
7
6/3/2014 (enter date)
Glahn, William
12/1/20171
1
1
1
1
1
Gubrud, Bob
12/1/20161
1 1 1
1 1
1
1 1
1
1 1
6
66%
Heer, John
2/1/2015
1 1 1
1 1
1
1
1
1
7
100%
Howard, John
2/1/2016
1
1
1
1
1
S
71%
Kostuch, Keith
2/1/2016
1 1
1
1
1
1
6
8895
Latham, Dianne Plunkett
2/1/2015
1
1
1
1
1
1
6
88%
Rudnicki, Tim
2/1/2015
1
1
1
1
4
57%
Sierks, Bill
2/1/2016
1 1
1
1
1
1
1
7
100%
Thompson, Paul
2/1/20161
1 1 1
1 1
1
1
1
1
7
100%
Waddick, Louise
2/1/2017
1
1
1
1
4
80%
Zarrin, Sarah
2/1/2015
1
1
Bale, Sarah
student
1
4#1
1
1
6
8895
Sokol, Elana
student
1
1
1
7
100%
Liaisons: Report attendance monthly and attach this report to the Commission minutes for the packet.
Do not enter numbers into the last two columns. Meeting numbers & attendance percentages will calculate automatically.
INSTRUCTIONS: Counted as Meetina Held (ON MEETINGS' LINE) Attendance Recorded (ON MEMBER'S LINEI
Regular Meeting w/Quorum Type "1" under the month on the meetings' line. Type "1" under the month for each attending member.
Regular Meeting w/o Quorum Type 1" under the month on the meetings' line. Type "1" under the month for each attending member.
Joint Work Session Type 1" under "Work Session" on the meetings' line. Type 1" under "Work Session" for each attending member.
Rescheduled Meeting' Type "1" under the month on the meetings' line. Type 1" under the month for each attending member.
Cancelled Meeting Type "1" under the month on the meetings' line. Type 1" under the month for ALL members.
Special Meeting There is no number typed on the meetings' line. There is no number typed on the members' lines.
'A rescheduled meeting occurs when members are notified of a new meeting date/time at a prior meeting. If shorter notice is
given, the previously -scheduled meeting is considered to have been cancelled and replaced with a special meeting.
CITY OF EDINA MINNESOTA
ENERGY & ENVIRONMENT COMMISSION
EDINA CITY HALL COMMUNITY ROOM
Thursday July 10, 2014
7:00 PM
I. CALL TO ORDER
II. ROLL CALL
III. APPROVAL OF MEETING AGENDA
IV. ADOPTION OFCONSENTAGENDA
A. Minutes
B. Attendance report and roster
C. Workgroup list and minutes
V. COMMUNITY COMMENT
During "Community Comment," the Energy & Environment Commission will invite residents to share new issues
or concerns that haven't been considered in the past 30 days by the Commission, or which aren't slated for future
consideration. Individuals must limit their testimony to three minutes. The Chair may limit the number of
speakers on the some issue in the interest of time and topic. Generally speaking, items that are elsewhere on
tonight's agenda may not be addressed during Community Comment. Individuals should not expect the Chair or
Commission Members to respond to their comments tonight. Instead the Commission might refer the matter to
staff or to an EEC Working Group for consideration at a future meeting.
VI. REPORTS AND RECOMMENDATIONS
A. Community Solar
B. Workplan
VII. CORRESPONDENCE & PETITIONS
A. Kim Crockett —Letter and publications
VIII.CHAIR AND COMMISSION MEMBER COMMENTS
A.
Building Energy Efficiency Subcommittee
B.
Business Recycling Working Group
C.
City Environmental Considerations Subcommittee
D.
Community Solar Subcommittee
E.
Education Outreach Working Group
F.
Home Energy Squad Subcommittee
G.
Local Food Working Group
H.
Recycling and Solid Waste Working Group
I.
Student Subcommittee
J.
Water Quality Working Group
K.
2014 EEC Summary and Schedule
IX. STAFF COMMENTS
UPCOMING EVENTS AND MEETINGS: httP://www.edinamn.gov/ <click calendar>
The City of Edina wants all residents to be comfortable being part of the public process. If you need assistance in the way
of hearing amplification, an interpreter, large -print documents or something else, please call 952-92 7-886172 hours in
advance of the meeting.
Edina Energy & Environment Commission
Working Groups and Subcommittees
Draft of 5-8-14
Building EneW Efficiency Subcommittee - Chair Sierks, Members: Bill Glahn, Keith Kostuch, Tim Rudnicki
Ohjective: TIZis srncconlmittee ti,ill irork with City sta,f to reconurlend to Council a colnprellensive approach for
achieving deeper energy efficiencj' actions fur the City's bltildings that ma hnize.s greenhouse gas reductions,
maximizes energy saved and dollars saved, and nlaximize.s effective use of city dollars.
City Environmental Considerations Subcommittee — Chair Keith Kostuch, Members: John Heer, Tim Rudnicki
Objeclive: This sub-contnnitte e of the EEC trill i -Mork u4th Cite staff to find a ii'av to embed the 2008
Comprehensive Plan C'hclpter 10 environmental conunitnlents into the City's capital budget process. New
buildings, major building renovations andfleet purchases have large and long-term environmental implications.
Consequently, environmental considerations need to he made more explicil at the inception of cell capital projects
and in the approval process up to City Council final approval.
Time frame: This process will he Collaborative with City staff 'in terms of conceptualization and implementation
so it will take most or all (?1'2014.
Community Solar Subcommittee - Chair Bill Sierks, Members: Paul Thompson, Bob Gubrud
Objective: 117ork with Citi' Staff to evaluate whether the City can host a C'onnnunity Solar site. If so, the group
will assist as appropriate in Completing the steps necessary to apply for, develop, and market this program, and
involve interested members of the public through a working group if the project moves fbi-word to construction
Edina Business Recycling Working Group— 3rd Wednesday - Chair Sarah Zarrin — Members: Lori Syverson (Chamber of
Commerce), Ben Knudson (Hennepin County Environmental Services), Andre Xiong (HCES), Aileen Foley
Education Outreach Working Group (EO WG) —I" Tuesday at 7:00 pm - Co -Chairs Paul Thompson and Bob Gubrud—
Members: John Howard (EEC), Andrew Harmon, Chuck Pretice and Mindy Ahler.
Objective: The mission of the Education and Outreach it'orking Group is to support the Charley of the Ldina
Energy and Environment Colnrnission by creating cnrareness cnul cn�raging residents, schools, churches, husiness'
and colmnllnity ol'ganlzatlons to lake clCtlOn to C017se1'1'e and increase erlel'£'t" effZcicncr' to relisc and rec.Yck' and
to preserve and enhance our environment
Home Enenj Squad Subcommittee (HES) —Meets as needed -Chair Bill Sierks —Commissioners -Paul Thompson, Bob
Gubrud
Ohjective: 717is subconnnittee works ivith City staff, Xce l L'rlc rgt', Centerpohit Energy, and the Canter jor Fnergt,
and the Erlvironrnenl to implement the Home Energy Squad program for Edina's residents. The City's gas crud
electric utilities hcmc hired CFE to implement to implement the Home Fner�y Squad progrum across their serrice
arca. Our subeornnlinc e is helping to promote the program and maximize its impact in Edina
Local Food Working Group — Chair Dianne Plunkett Latham, Arlene Forrest, Louise Segreto, David Chin, Flora Delaney,
Joeffrey Bodeau, Virginia Kearney, and Jamie Bodeau
Objective: Facilitate creation of home/Comnumihvgardens, chicken & bee keeping, and incorporation of food
growing ureas./access in multifamily residential developments
Recyclinz & Solid Waste Working Groin (RSW WG) —I" Thursday at 7:00 pm -Chair DP Latham, Commissioners Sara
Zarrin and Tim Rudnicki - Members Michelle Horan, Melissa Seeley — City Staff Solvei Wilmot
Objeclily: Eti•aluate and nu)liitor the provision of a residential recycling program. Eraluate and inonitor the
provision of it pi'hwielY provided solid wasle program, us tired` as a reduction in nlatnicipal solid a 'we produced
hY citl^ residents and husillesscs. Educate the public about recycling
Student Working Group — EEC Chair, Members: Paul Thompson, Student Members, and open to students attending
secondary schools in Edina.
(�bjectire: Tu facilitate, coordinate and shore informalinn hehveelt the f'1- and the School Ell i ironmentul
groups and to work on common energy and envirolunenlul objectives as appropriate. To assist in de veloping
einlronlnenialleaders of toinorrou.
Water Quality Working Group (WQ WG) — I" Thursday at 6:30pm - Chair Lou Ann Waddick — Members: David B.
VanDongen , Michelle Jordan, Jon Moon, Steve Wielock, Katherine Winston
ONecliye: TO j lcilitale c ollillillnlc'ation belween c'iiizens and cill S,ov( rl7lnCl71 and chanipion C.ff)1'I,S to hnprove
waler yuulily within Edina.
E&OWG 6/3/14 Meeting
Held in Community Room, 7pm
1. Introductions and Check in: In attendance: Bob Gubrud, Heather Meier
(guest- NE Minnesotans for Wilderness), Stephen Snyder (NE
Minnesotans for Wilderness), Elana Sokol, Sarah Bale, Mindy Ahler,
Paul Thompson and John Howard.
2. Minutes from 5/6/14 meeting approved without comment.
3. The guests from NE MN for Wilderness gave a presentation introducing
their group and explaining their proposal to join the Commission in the
Edina 4th of July Parade. Highlights of their presentation:
a. Group has 34 Edina residents, expect 10-20 July 4th marchers.
b. Protecting wilderness, especially the Boundary Water Canoe Area
(BWCA), is group's goal.
i. Issues to area include: climate change, invasive species, water
quality, wildlife issues, etc.
ii. BWCA is most visited wilderness area in the country, so also
tremendous economic value to state.
c. Propose doing a BWCA themed segment within the Commission's
parade slot:
i. Theme could include a portage on wheels with a canoe
ii. "Edina loves the BWCA" t -shirts with marchers in BWCA
appropriate attire (hiking boots, hiking clothes, etc).
iii. Could do handout of Frisbees or water bottles.
d. Next step is to present this idea to the EEC. Mindy to send parade
rules to Heather and Stephen to check if proposal would fit the
bylaws.
e. Bob expressed concern that the group may not fit criteria of being
local, but there are local members. Bob to check with parade chair
on applicability.
f. Edina High school has a class that goes to the BWCA. Sarah to
approach Edina teacher about involving the class.
4. April 28th Environmental Forum
a. Debrief. Kids seemed to come more than in past years, although
not necessarily their parents. Fresh Energy seemed to get some
attendees. Live polling didn't start early enough, but seemed like a
cool idea. Polling revealed the most common marketing vehicle
was "word of mouth/personal invitation" which attracted 31
attendees and "other" being second at 30 attendees. Overall
attendance was poor, in neighborhood of 100-115, which is
comparable to 2013. Attendance by high schoolers — a main target
audience - possibly was low because of stigma that Middle School
events are lower, less important. Mindy believed date was an
issue, as a lot going on around late April including conflicting
school events. Bob is concerned the poster was not adequately
descriptive. John felt the presentation was somewhat generic,
geared toward people already on board with the issues, which is
not ideal in his opinion. However many of the attendees were
people who are active on environmental and energy issues, so this
worked ok this time. Bob and Paul felt Michael Noble did a good
job. Elana recommends bringing Paul Douglas back for next year.
John concurs with this idea, supports having an annual forum.
5. Community Events
a. April Forum 2015
• Date is under consideration for revision, maybe a fall date
would be better? Change in seasons, time of year could be more
conducive to certain topics.
• Paul enquired about having a musical act or other entertainment
to draw in people?
• Other topics for next forum: Farmed and dangerous (series on
Hulu), Weather (Paul Douglas),
• Mindy asked if students involvement is important? Student
involvement might be difficult if early in the year.
b. Environmental Film Series
1. Publicity- utilized ordinary channels for the latest showing in
May, but did not get results. Only about 15 people attended.
2. Next showing- Discussion over whether to have summer
series. Given the poor attendance of the most recent showing
and general difficulty of getting people interested during the
summer, it was decided to skip the July showing and have the
next one on the third Friday of September. Water will be the
next theme. The working group may try to publicize the Lorax
movie being shown on July 3rd as part of the Centennial Lakes
Film series. This film has a conservation message.
6. 4th of July Parade
a. Recruit marchers- EGG, Edina Bike task force, Cool Planet, Living
Streets folks have been invited. Minnehaha Creek Watershed,
Morningside Neighborhood Association, Morningside Womens
club, Morningside Athletic Club, Park Board are groups Paul is
interested in inviting. Others to invite include 9 -mile creek
watershed, Edina Garden Council, Environmental Science groups,
Project Earth, other Edina School groups.
10
b. Paul has proposed a theme of a "Deeper Shade of Green" for the
Commission's parade marchers. No opposition to this idea. Elana
envisions each group having a banner with a different shade of
green.
7. Enhanced HES
a. Status: Sign-ups & Installs- event did not generate much interest
in the service. Three free visits were given out at the April 28th
event.
b. Publicity Plans;
i. About Town Article — could do an article featuring Elana's
family experience, which has been very positive. The article
would be for the Fall 2014 issue, which has an article deadline
of late July. Paul to call Krystal and/or Ross at the city about
getting in the About Town magazine.
8. Project Earth
a. Solar Panels- media center has installed charging stations, so need
may be decreasing for additional solar kiosk. Window of
opportunity could be closing. One charging station is operated by
running on a treadmill.
i. Solar Panel fund raising- $3,500 still needed.
ii. Admin. Support & Collaboration- administration, district is
not heavily involved. Bob appears to be concerned by this.
b. Elana and Sarah have various ideas to engage more students in
project earth. They had success in increasing the Volunteer club
membership by adding flair and fun to the group activities.
9. Community Shared Solar
a. Site selection — work is underway in evaluating the Edina Public
works building.
10. New member recruiting — Kristopher Wilson has expressed interest.
11. Next meeting: July 1, 2014
Meeting adjourned 9:15pm.
Minutes prepared by John Howard.
is
„:41b!�w�-AMERICAN
EXPERIMENT
Building a Culture of Prosperity for Minnesota and the Nation
June 16, 2014
Mayor Jim Hovland
City of Edina
4801 W. 50th St.
Edina, MN 55424
Dear Mayor Hoveland,
Bill Glahn, who is a senior fellow at the Center, and I conducted a survey of three "GreenStep”
cities (Kasson, Royalton and Edina) that installed solar projects encouraged by Minnesota's
GreenStep program and funded by government grants. We wanted to explore how each city
evaluated these solar projects.
I have enclosed a copy of our report, A Tale of Three Cities: Solar Power and the Irresistible
Lure of "'Free Money", for your review. Bill and I visited during the winter of 2013 and had
hoped to get back to you sooner, but more urgent projects pushed this to the back burner.
We were graciously welcomed by each city and came away impressed with the professionalism
and good intentions of the city councils and staff. We warned our hosts that we have a strong
point of view on how to analyze these project opportunities and the use of federal and state
funding, particularly in light of our massive and growing federal deficit.
As we noted in our paper, tax dollars are never "free." They can only come from two sources:
current taxpayers who contribute to the national treasury and future taxpayers who will have to
pay back the borrowing used to fund current spending.
We are also concerned about the impact of Minnesota's mandated energy subsidies on the price
of energy prices. This may not be noticed by affluent Minnesotans but these higher energy prices
that show up in our monthly bills hurt job creation, especially in energy intensive industries. This
means that all Minnesotans are paying higher energy prices but also might be missing out on
good job opportunities that will not be offset by job gains in the "green" sector. This is especially
hard on low income Minnesotans who may be choosing between groceries and paying their
electric bill.
I have enclosed a study by my colleague, Peter J. Nelson, Energy Mandates Will Eliminate
Minnesota Jobs, on the expansion of energy mandates in 2013.
Our opponents counter that these costs are well worth the gains we will see in a cleaner
environment or the reduction of greenhouse gases, etc. We take the position that Minnesota's
energy policy is not producing the environmental gains promised by renewable energy standards-
-- and in fact lead to greater carbon emissions and other negative consequences for our natural
8441 Wayzata Boulevard * Suites 350 * Golden Valley, MN .55426
612-338-3605 * Fax 763-710-7429 * AmericanExperiment.org
environment. Moreover, higher energy costs place Minnesota in a less competitive position as
we compete for talent and capital in a tough global market. (You can find various reports on our
website, or contact us for further information. For example, see The High Cost of Minnesota's
Renewable Energy Standard.)
We do not want our report to be taken as a personal criticism of the people or cities we
interviewed. After all, the conventional wisdom is that federal grants are "free" money and if you
do not take the grant, someone else will. I used to struggle with that issue when I served as a city
councilwoman in Deephaven.
Instead, we encourage our local elected officials to approach these opportunities with a sharper
pencil and a less parochial view of the true costs and benefits. We offered the approach taken by
the Mayor of Crystal as a good example. Too much is at stake in terms of addressing our national
debt, encouraging job creation and protecting our precious natural environment.
Again we thank you for your hospitality. We were charmed by your lovely, well managed towns
and hope this report does not mean we cannot come back to visit someday!
Sincerely yours,
Kim Crockett, Esq.
Chief Operating Officer I Executive Vice President I General Counsel
cc Joni Bennett
Mary Brindle
Josh Sprague
Ann Swenson
Scott Neal
Diane Plunkett Latham
-12-
Energy Mandates
Will Eliminate
Minnesota Jobs
By Peter J. Nelson
Director of Public Policy
Key Points
• Proposals to expand Minnesota's renewable energy mandates will raise electricity
prices on Minnesota families and businesses.
• Electricity prices could increase by up to two cents per kilowatt hour if the
combination of renewable mandate expansions in the House and Senate omnibus
energy bills becomes law. Two cents represents a 30 percent increase for industrial
customers.
• If electricity prices increase by a half cent to two cents per kilowatt hour, the loss
of Minnesota jobs in just the manufacturing, retail and hospitality sectors will likely
amount to 12,000 to 49,000 jobs.
• To gain more perspective on the jobs at risk, this report estimates the equivalent
number of jobs an electricity price increase could otherwise fund in various sectors
of the economy. An increase in the price between a half cent and two cents on
Minnesota's K-12 public schools, for one example, represents the equivalent of 121 to
484 teaching jobs. For another example, a similar range of price increases on grain
and oilseed milling represents the equivalent of 112 to 447 production worker jobs.
• Given the jobs at stake, a much better energy policy for Minnesota would be to scale
back—not increase—the renewable mandates now in law.
14
Introduction
Proponents of renewable energy mandates often
claim these mandates will not only promote a
cleaner environment but also create green jobs. It's
a win-win, they claim. A bill proposed in the 2013
legislative session (HF 880/SF 763) was actually
dubbed the Minnesota Clean Energy and Jobs
Act. Many of the provisions of this bill—including
provisions to increase Minnesota's renewable
energy mandate to 40 percent renewable generation
by 2030 along with a new solar mandate—are now
included in HF 956, the House omnibus energy bill.
Contrary to proponents' j obs claims, these and other
efforts to mandate renewable energy will eliminate
jobs in Minnesota. The collection of renewable
mandates in the House and Senate omnibus energy
bills could easily raise electricity prices by up to
two cents per kilowatt hour. Considering just the
manufacturing, retail and hospitality sectors of
Minnesota's economy, this report estimates that a
two cent increase would result in a loss of nearly
50,000 jobs in these sectors. A more scaled down
bill, causing just a half cent increase, would still
result in 12,000 jobs lost.
Renewable mandates will raise
electricity prices
The idea that lawmakers can on net create jobs
by mandating the purchase of any product defies
common sense. Lawmakers are just not equipped
to allocate the state's resources to more productive
uses that create more jobs. But that's exactly what
renewable mandates try to do. A mandate moves
resources to renewable industries, which necessarily
leaves fewer resources for other industries. No
doubt mandating more wind and solar will create
new jobs serving those sectors, but they will come
at the expense of jobs in every other part of the
economy paying higher energy prices. This is the
high price paid when the government picks winners
and losers rather than letting the private market
function efficiently.
2 1 ENERGY MANDATES WILL ELIMINATE MINNESOTA JOBS 15
There is no question renewable mandates will
raise electricity costs on Minnesota families and
businesses. The only reason a mandate is necessary
is because, at this time, adding renewables costs
more than our current generation mix. Indeed,
if renewables were more affordable or even
competitively priced, then utilities would already
be using them to generate electricity without
mandates.
The most important question: How much will
renewable mandates raise electricity costs? That's
hard to answer because the proposals to mandate
renewables are a moving target. Proposals to
mandate solar have ranged from 1 to 10 percent of
total electricity sales. Whether or not mandates
apply to specific utilities and industries is also in
flux. Furthermore, even if an exact proposal were
known, projecting the actual increase in the price
would still be difficult under the time constraints
of a legislative session. Consequently, the best way
to consider the impact of renewable mandates on
electricity prices and jobs is to consider a full range
of possibilities.
The range of electricity price increases
The range of possibilities starts with a 1.33 percent
increase. That's the new tax on utility revenues to
subsidize solar included in the bill that just passed
the House. At the top end, a representative of Great
River Energy testified in March that a 10 percent
solar mandate would increase prices by 40 percent
for their customers and that is just because of the
solar mandate alone.' A 10 percent solar mandate is
no longer on the table, but a 4 percent solar mandate
passed the House in combination with an increase
of the renewable mandate to 40 percent by 2030,
as well as a number of other renewable mandates.
Combined, the renewable mandates in the House
bill could easily raise prices by 40 percent.
1 John Brekke,Testimony, Minnesota House Energy Policy
Committee, March 8, 2013.
Table 1: Job losses due to increasing electricity prices
*Methodology: This table estimates the job losses in the manufacturing, retail and hospitality sectors for different rate
increases based on a recent study by the Kentucky Energy and Environment Cabinet Department for Energy Development
and Independence. The study developed elasticities for five economic sectors "to calculate changes in employment given
a specific change in electricity prices." Estimating the job losses simply requires multiplying the total employment by the
elasticity coeffecient by the percent change in electricity price. A half, one, and two cent increase will be different between
the commercial and manufacturing sector because they are added to a different price. For the commercial sector, these
represent a 5.8 percent, 11.6 percent and 23.2 percent increase, respectively. For the industrial sector, these represent
a 7.7 percent, 15.5 percent, and 30.9 percent increase, respectively.
Sources: U.S. Bureau of Economic Analysis, Regional Economic Accounts, State Annual Personal Income & Employment,
available at http://www.bea.gov/regional/index.htm; and Aron Patrick, The Vulnerability of Kentucky's Manufacturing
Economy to Increasing Electricity Prices.
The rest of this report investigates how a range of
increases in electricity prices would impact various
sectors of the economy. This investigation begins
by estimating the job losses in three sectors of the
economy: Manufacturing, retail and hospitality.
Next, to help bring more perspective to the number
and types of jobs at risk, the report estimates the
range of price increases on various sectors of the
economy and then estimates the equivalent number
of jobs these price increases could otherwise fund.
Four different price increases are considered in the
range—a 1.33 percent increase, a half cent increase,
a one cent increase, and a two cent increase. On a
percentage basis, a two cent increase limits the top
of the range to about a 30 percent price increase
on industrials. Considering the possibility of 40
percent increases, this represents a conservative
range.
Job losses
Table 1 provides estimates for job losses in
Minnesota's manufacturing, retail and hospitality
sectors for the range of price increases. The estimates
draw on a recent national study released by the
Kentucky Energy and Environment Cabinet.' The
study modeled the responsiveness of employment
to changes in the price of electricity between 1990
and 2010. It developed elasticities for five economic
sectors "to calculate changes in employment given
a specific change in electricity prices." Because the
elasticities were developed from national historical
data, the results "may be generally applied to any
state."
2 Aron Patrick, "The Vulnerability of Kentucky's Manufac-
turing Economy to Increasing Electricity Prices," Kentucky
Energy and Environment Cabinet, Department for Energy
Development and Independence (Oct. 2012), available at
http://energy.ky.gov/Programs/Documents/Vulnerability%20
of%20Kentucky's%2OManufacturing%2OEconomy.pdf.
16 of CENTER OF THE AMERICAN EXPERIMENT
3
The study found that an "increase of 10 percent
in real electricity prices was associated with a
reduction of 3.37 percent in absolute manufacturing
employment," a 1.57 percent reduction in retail
trade employment, and a 1.42 percent reduction in
hospitality employment. The health care sector
showed a smaller (and less statistically significant)
0.43 percent reduction, and no relationship was
found in the government sector.3
The loss of Minnesota jobs due to electricity price
increases shown in Table 1 is substantial. A two
cent increase in electricity prices results in nearly
50,000 jobs eliminated or never created across
all three sectors. Manufacturing job losses range
from 1,351 jobs in response to a 1.33 percent price
increase and grow to 31,401 in response to a two
cent (30.1 percent) increase.
The job equivalent of electricity
price increases
To help bring more perspective to this issue, it's
helpful to take a closer look at what the range
of electricity price increases would mean for
more specific types of commercial and industrial
customers. Though there won't be a one-to-one
relationship between job losses and electricity price
increases, a look at the equivalent number of jobs a
price increase could otherwise fund offers a valuable
perspective on the jobs at risk.
Tables 2 to 4 estimate the cost of the four price
increases to a selection of different sectors of
Minnesota's economy and several specific customers.
The sectors of the economy were chosen primarily
3 These numbers represent the most likely impact on jobs,
but there is of course room for error. Here are the 95 percent
confidence intervals for each sector: Manufacturing is
between -2.77 percent and -3.97 percent; retail is between
-1.30 percent and -1.84 percent; and hospitality is between
-1.12 percent and -1.71 percent. The study also reports
something called robust standard errors that show a wider
confidence interval. Importantly, all the findings are
statistical significant and negative on employment impacts.
4 1 ENERGY MANDATES WILL ELIMINATE MINNESOTA JOBS 17
by the availability of data to estimate energy usage.
Tables 5 and 6 provide the underlying data and
methodology used to estimate energy usage and
price increases for these sectors. In addition, they
include data on more customers than those reported
in Tables 3 and 4.
Here are some examples of the equivalent number
of jobs an electricity price increase could fund.
The range of price increases on Minnesota's K-12
public schools represents the equivalent of 28 to
484 teaching jobs. Price increases on Minnesota
department stores represents the equivalent of 19
to 326 retail sales people. Price increases on grain
and oilseed milling manufactures represents the
equivalent 19 to 447 production workers. And price
increases on dairy product manufactures represents
the equivalent of 10 to 239 production workers.
As passed, the House omnibus energy bill exempts
Minnesota's iron mining and paper mill industries
from the solar mandate. But Table 4 reveals that
these industries are not the only heavy users of
electricity in the state. Grain and oilseed milling,
basic chemical manufacturing, animal slaughtering
and processing, plastics manufacturing, printing,
and dairy product manufacturing all purchase
substantial amounts Of electricity. Critically, as
shown in Table 5, these industries support far more
jobs than Minnesota's paper mills. These industries
should wonder why they're not getting the special
favor of an exemption as well.
These job equivalents provide a valuable
perspective on the jobs that are at risk if electricity
prices increase. It helps frame the type of jobs at
risk and the relative number of jobs compared to
other economic sectors.
Conclusion
Clearly, Minnesota jobs are at risk when electricity
prices rise. The data presented here show that
tens of thousands of Minnesota jobs will be lost
if Minnesota significantly expands its renewable
energy mandates. Even a seemingly small price
increase of 5 to 8 percent can translate to well over
10,000 jobs in just three sectors of the economy.
These job losses far surpass the couple thousand
green jobs proponents claim will be created by
the renewable mandates in the current House and
Senate bills.
Given the jobs at stake, a much better energy
policy for Minnesota would be to scale back—
not increase—the renewable mandates now in
law. After all, Minnesota already has one of
the most aggressive renewable mandates in the
country. Furthermore, several other states are
now considering scaling back their already less
aggressive mandates. Minnesota will become quite
the outlier if lawmakers expand the state's energy
mandates while other states scale theirs back. ■
18 vf�CENTER OF THE AMERICAN EXPERIMENT' t
E
Table 2. Minnesota electricity price increase scenarios by sector
Sources: U.S. Energy Information Administration, Retail Sales of Electricity by State by Sector by Provider, 1990-2011
(Oct. 1, 2012), available at http://www.eia.gov/electricity/data/state/; and U.S. Energy Information Administration,
Average Price by State by Provider, 1990-2011 (Oct. 1, 2012), available at http://www.eia.gov/electricity/data/
state/. Job equivalent estimate based on an annual mean wage of $46,630. Bureau of Labor Statistics, May 2012
State Occupational Employment and Wage Estimates, Minnesota (Mar. 29, 2013), available at http://www.bls.gov/
oes/current/oes—mn.htm.
6 1 ENERGY MANDATES WILL ELIMINATE MINNESOTA JOBS 19
Scenarios
electricity rates, usage
and Rate Increase
totalMinnesota
L.2011
MN
.. I
Toto 1
1.33%
Half Cent
One Cent
Retail
Electricity
Electricity
($1,000)
($1,000)
($1,000)
($1,0001
Rate,
•(Million••i
(cents
per
Usage
kWN)
Residential
10.96
22,524
$2,468,600
$32,832
$112,619
$225,237
$450,475
Commercial
8.63
22,371
$1,930,627
$25,677
$111,856
$223,711
$447,422
Industrial
6.47
23,619
$1,528,131
$20,324
$118,094
$236,187
$472,374
Transportation
8.23
19
$1,576
$21
$96
$191
$383
Total
8.65
68,533
$5,928,079
$78,843
$342,664
$685,327
$1,370,654
Equivalent number
of jobs (paying the
annual mean wage)
1,691
7,349
14,697
29,394
the rate increase
supports
Sources: U.S. Energy Information Administration, Retail Sales of Electricity by State by Sector by Provider, 1990-2011
(Oct. 1, 2012), available at http://www.eia.gov/electricity/data/state/; and U.S. Energy Information Administration,
Average Price by State by Provider, 1990-2011 (Oct. 1, 2012), available at http://www.eia.gov/electricity/data/
state/. Job equivalent estimate based on an annual mean wage of $46,630. Bureau of Labor Statistics, May 2012
State Occupational Employment and Wage Estimates, Minnesota (Mar. 29, 2013), available at http://www.bls.gov/
oes/current/oes—mn.htm.
6 1 ENERGY MANDATES WILL ELIMINATE MINNESOTA JOBS 19
Table 3. Examples of electricity price increase scenarios for selected commerical customers
measured in dollars and the equivalent number of jobs these dollars support
Sources: K-12 instructor equivalents are based a full time salary of $56,086 and higher education instructor equivilants
are based on full time salary of $78,950. U.S Census Bureau, 2011 Annual Survey of Public Employment and Payroll
(Spring 2013), available at http://www2.census.gov/govs/apes/1 1 stlmn.txt. Cashier, Retail Salesperson, Registered
Nurse, and office and administrive support worker equivalents are based on Bureau of Labor Statistic wage estimates.
Bureau of Labor Statistics, May 2012 State Occupational Employment and Wage Estimates, Minnesota (Mar. 29,
2013), available at http://www.bls.gov/oes/current/oes_mn.htm.
See Table 5 for the methodology and sources used to estimate electricity usage and spending.
20 A.:" CENTER OF THE AMERICAN EXPERIMENT' f
spending
usage..
Rate increase Scenarios
Quantity•
-Cent Two Cents
Electricity
•••
Electricity
•••
($1,000) ($1,000)
($1,000)
MN K-12
Rate Increase $1,557 $6,783
$13,566 $27,132
Public
Schools
1,356,588
$117,074
Teacher equivalent
28
121
242
484
MN
Rate Increase
$268
$1,168
$2,336
$4,672
Cashier Equivalent
13
58
117
233
Grocery
Stores
233,604
$20,160
MN
Rate Increase
$443
$1,931
$3,863
$7,725
Retail Salesperson
Equivalent
19
81
163
326
Department
Stores
386,274
$33,335
Rate Increase
$1,148
$5,000
$10,000
$20,001
Office and
Administrative
34
146
292
584
Twin Cities
Offices
1,000,038
$86,303
support equivalent
Mayo
Rate Increase
$369
$1,606
$3,212
$6,424
Registered Nurse
Equivalent
5
23
45
91
Clinic
Campus
321,204
$27,720
U of MN
Rate Increase
$212
$925
$1,849
$3,699
Twin Cities
184,935
$15,960
Campus
Professor Equivalent
3
12
23
47
Sources: K-12 instructor equivalents are based a full time salary of $56,086 and higher education instructor equivilants
are based on full time salary of $78,950. U.S Census Bureau, 2011 Annual Survey of Public Employment and Payroll
(Spring 2013), available at http://www2.census.gov/govs/apes/1 1 stlmn.txt. Cashier, Retail Salesperson, Registered
Nurse, and office and administrive support worker equivalents are based on Bureau of Labor Statistic wage estimates.
Bureau of Labor Statistics, May 2012 State Occupational Employment and Wage Estimates, Minnesota (Mar. 29,
2013), available at http://www.bls.gov/oes/current/oes_mn.htm.
See Table 5 for the methodology and sources used to estimate electricity usage and spending.
20 A.:" CENTER OF THE AMERICAN EXPERIMENT' f
Table 4. Electricity price increase scenarios for Minnesota's largest manufacturing sectors
measured in dollars and the equivalent number of productions workers these dollars support
8 1 ENERGY MANDATES WILL. ELIMINATE MINNESOTA JOBS 21
Scenarios
kManufacturing
Energy
Spending
usage
and
Rate increase
ector
Quantity
•.. -
•.,
• Prod.
•o
Purchased
Purchased
0;0)
($1, Worker ($1,000)
Worker
($1,000) Worker ($1,000)
Worker
Equiv.
Electricity
Electricity
000
Equiv.
Equiv.
Equiv.
Pulp,
paper, and
paperboard
11494,802
$96,714
$1,286 18 $7,474
105
$14,948 210 $29,896
421
mills
Grain and
oilseed milling
11184,232
$76,620
$1,019
19
$5,921
112
$11,842
223
$23,685
447
Basic chemical
manufacturing
1,096,651
$70,953
$944
18
$5,483
103
$10,967
206
$21,933
413
Animal
slaughtering
1,092,473
$70,683
$940
31
$5,462
183
$10,925
366
$21,849
732
and processing
Plastics
product
796,381
$51,526
$685
18
$3,982
102
$7,964
204
$15,928
409
manufacturing
Printing and
related support
719,903
$46,578
$619
15
$3,600
88
$7,199
176
$14,398
352
activities
Dairy product
manufacturing
506,525
$32,772
$436
10
$2,533
60
$5,065
119
$10,131
239
Converted
paper product
494,635
$32,003
$426
10
$2,473
57
$4,946
115
$9,893
230
manufacturing
Foundries
449,780
$29,101
$387
10
$2,249
56
$4,498
112
$8,996
224
Navigational,
measuring,
electromedical,
and control
336,954
$21,801
$290
6
$1,685
36
$3,370
71
$6,739
143
instruments
manufacturing
Other wood
product
334,251
$21,626
$288
7
$1,671
38
$3,343
76
$6,685
153
manufacturing
Forging and
322,348
$20,856
$277
5
$1,612
32
$3,223
64
$6,447
128
stamping
Semiconductor
and other
electronic
319,605
$20,678
$275
6
$1,598
38
$3,196
75
$6,392
150
component
manufacturing
Machine
shops; turned
product;
and screw,
281,928
$18,241
$243
5
$1,410
30
$2,819
60
$5,639
120
nut, and bolt
manufacturing
8 1 ENERGY MANDATES WILL. ELIMINATE MINNESOTA JOBS 21
Table 4 (continued)
Manufacturing
Energy usage and
Spending
Rate Increase Scenarios
-Sector
Quantity of I Cost of 1.33% Prod.
a I'f C e t
Prod. One Cent
Tw Cent
0
Prod.
Purchased Pur • -. •••
•••
[H
• •••
•••Worker
Electricity Electricity •Equiv.Equiv.Equiv.
•••
Other
fabricated
metal product
280,904 $18,174 $242 5
$1,405
29 $2,809
59
$5,618
117
manufacturing
Other
nonmetallic
mineral
265,724
$17,192
$229
6
$1,329
33
$2,657
67
$5,314
133
product
manufacturing
Cement and
concrete
product
241,705
$15,638
$208
4
$1,209
25
$2,417
49
$4,834
98
manufacturing
Medical
equipment
and supplies
236,485
$15,301
$203
5
$1,182
27
$2,365
54
$4,730
108
manufacturing
Other general
purpose
machinery
227,833
$14,741
$196
4
$1,139
24
$2,278
47
$4,557
94
manufacturing
Fruit and
vegetable
preserving and
209,293
$13,541
$180
5
$1,046
31
$2,093
61
$4,186
122
specialty food
manufacturing
Glass and
glass product
191,197
$12,370
$165
4
$956
24
$1,912
48
$3,824
96
manufacturing
Sugarand
confectionery
product
164,763
$10,660
$142
3
$824
18
$1,648
36
$3,295
72
manufacturing
All
Manufacturing
18,286,367
$1,183,128
$15,736
369
$91,432
2,146
$182,864
4,292
$365,727
8,585
Industries
Sources: U.S. Census Bureau, 2011 Annual Survey of Manufactures, available at http://www.census.gov/manufac-
turing/asm/; and U.S. Energy Information Administration, Average Price by State by Provider, 1990-2011 (Oct. 1,
2012), available at http://www.eia.gov/electricity/data/state/. See Table 6 for the methodology and sources used to
estimate electricity usage and spending.
22 CENTER OF THE AMERICAN EXPERIMENT I 9
Table 5: Estimated electricity usage and spending for selected
commercial sectors and customers
10 1 ENERGY MANDATES WILL ELIMINATE MINNESOTA JOBS 23
Estimated
Usage
Estimated
Square
Feet
Electricity
Energy
ft) b
Minnesota
AverageTotal
Commercial
Electricity
Price, 2011
K-12 Education
MN Public Schools
165,437,602
8.2
0.0863
1,356,588
$117,073,573
Selected Minnesota Colleges
and Universities
University of Minnesota Duluth
3,416,220
8.2
0.0863
28,013
$2,417,522
MNSU Mankato
2,876,985
8.2
0.0863
23,591
$2,035,927
U of MN Twin Cities
22,553,090
8.2
0.0863
184,935
$15,959,920
St. Cloud State University
3,1 18,827
8.2
0.0863
25,574
$2,207,069
Augsburg
1,036,289
8.2
0.0863
8,498
$733,340
Bemidji State University
1,630,685
8.2
0.0863
13,372
$1,153,971
Winona State
2,128,653
8.2
0.0863
17,455
$1,506,363
Selected Minnesota
Hospitals
Mayo Clinic Campus
15,592,413
20.6
0.0863
321,204
$27,719,880
U of MN Amplatz Children's
Hospital
185,000
23.7
0.0863
4,385
$378,382
Thief River Falls Hospital
137,000
23.7
0.0863
3,247
$280,207
Minnesota Retail
Grocery Stores
16,451,000
14.2
0.0863
233,604
$20,160,042
Convenience Stores
290,000
14.2
0.0863
4,118
$355,383
Department Stores
22,722,000
17
0.0863
386,274
$33,335,446
Twin Cities Retail and
Office Space
Retail
179,290,000
17
0.0863
3,047,930
$263,036,359
Office
71,945,207
13.9
0.0863
1,000,038
$86,303,312
Minnesota
Commercial
0.0863
22,371,109
$1,930,626,707
10 1 ENERGY MANDATES WILL ELIMINATE MINNESOTA JOBS 23
Table 5 (continued)
* Methodology: Total electricity usage is estimated by multiplying the total square feet of the buildings consuming elec-
tricity by the kW hours used per square foot as estimated by the U.S. Energy Information Administration.
a Minnesota Department of Education, Data Reports and Analytics, School Finance Spreadsheets, Facilities and Tech-
nology, Building Age Reports (Feb. 14, 2013), available at http://w20.education.state.mn.us/MDEAnalytics/Data.
jsp. American College & University Presidents' Climate Commitment, Progress Reports (various schools), available at
http://rs.acupcc.org/; Minnesota State University Mankato, "Buildings," at http://www.mnsu.edu/facilities/facilities.
html; St. Cloud State University, St. Cloud State University Greenhouse Gas Emissions Inventory Final Report (Sept 15,
2010), available at http://www.stcloudstate.edU/facilities/documents/SaintCloudStateUniversityGHGEmissionsFl-
NALREPORT.pdf; Mayo Clinic, Five -Year Plan Update (Nov. 15, 2011), available at http://www.co.olmsted.mn.us/
planning/ordinances/Documents/City%20Rochester/201 1 Mayo5-yearUpdateRev.pdf; Associated Press, "Sanford
Health breaks ground on $60M Thief River Falls hospital," Pioneer Press, May 31, 2012, available at http://www.
twincities.com/localnews/ci_20749777/sonford-health-breaks-ground-60m-thief-river-falls; Thomas Lee, "University of
Minnesota pursues big Hospital expansion projects," Med City News, September 28, 2010, available at http://med-
citynews.com/2010/09/university-of-minnesota-pursues-big-hospital-expansion-projects/; U.S. Census Bureau, 2007
Economic Census, Retail Trade: Subject Series - Misc Subjects: Floor Space by Selected Kind of Business for the United
States and States: 2007 , available at http://factfinder2.census.gov/faces/tableservices/isf/pages/productview.
xhtml?src=bkmk; Cushmand & Wakefield, Marketbeat: Retail Snapshot, Q3 2012, available at http://www.cushwake.
com/cwmbs4q 12/PDF/retail_usnational_4q 12.pdf; and Cushmand & Wakefield, Marketbeat: Office Snapshot, Q4
w
2012, available at http://ww.cushwake.com/cwmbs4g12/PDF/off_usnational_4g12.pdf.
b U.S. Energy Information Administration, 2003 Comercial Buildings Energy Consumption Survey, Table C20: Electricity
Consumption and Conditional Energy Intensity by Climate Zonea for Non -Mall Buildings, 2003 (Dec 2006), available
at http://www.eia.gov/emeu/cbecs/cbecs2003/detailed tables_2003/detailed_tables_2003.htm1.
c U.S. Energy Information Administration, Retail Sales of Electricity by State by Sector by Provider, 1990-2011 (Oct. 1,
2012), available at http://www.eia.gov/electricity/data/state/; and U.S. Energy Information Administration, Average
Price by State by Provider, 1990-2011 (Oct. 1, 2012), available at http://www.eia.gov/electricity/data/state/.
24 14.� CENTER OF THE AMERICAN EXPERIMENTI 11
Table 6: Minnesota manufactures electricity and employment data, 2011
12 1 ENERGY MANDATES WILL ELIMINATE MINNESOTA JOBS 25
MinnesotaProduction
Workers
Estimated electricity
UsageSpending
007
Total value
Electricity
EnergyQuantity
MN Ave.
il
NAICS
• • • fiCost
Avg
Ave.
of shipments
Intensity Electricity
Industrial
of of
••
••
Total Wages
��• •
•�1(Purch.
Purchased
Electricity
Electricity
pu rchosed
workersNAICS
pe
r year
Wage
kWh/ (1,000
dollar
Price,
000
3112
Grain and oilseed milling
2,279
$122,701
$53,005
$6,023,795
shipment)
0.197
1,184,232
per KWh)
0.0647
$76,620
3113
Sugar and confectionery
product manufacturing
2,265
$87,251
$45,633
$1,586,443
0.104
164,763
0.0647
$10,660
3114
Fruit and vegetable
preserving and specialty
4,094
$133,426
$34,237
$1,506,960
0.139
209,293
0.0647
$13,541
food manufacturing
3115
Dairy product
manufacturing
4,525
$183,097
$42,401
$5,261,328
0.096
506,525
0.0647
$32,772
3116
Animal slaughtering and
14,338
$454,027
$29,865
$7,414,701
0.147
1,092,473
0.0647
$70,683
processing
3119
Other food manufacturing
4,655
$144,577
$33,589
$2,261,892
0.069
155,582
0.0647
$10,066
3121
Beverage manufacturing
887
$39,469
$43,140
$1,038,976
0.085
88,646
0.0647
$5,735
3212
Veneer, plywood, and
engineered wood product
920
$35,309
$41,330
$300,845
0.478
143,658
0.0647
$9,295
manufacturing
3219
Other wood product
manufacturing
6,690
$244,214
$43,817
$1,888,911
0.177
334,251
0.0647
$21,626
3221
Pulp, paper, and
paperboard mills
2,834
$178,255
$71,070
$2,279,162
0.656
1,494,802
0.0647
$96,714
3222
Converted paper product
manufacturing
5,570
$230,950
$43,075
$3,573,872
0.138
494,635
0.0647
$32,003
3231
Printing and related
16,847
$632,499
$40,882
$4,455,648
0.162
719,903
0.0647
$46,578
support activities
3251
Basic chemical
manufacturing
919
$48,027
$53,136
$3,134,248
0.350
1,096,651
0.0647
$70,953
3254
Pharmaceutical and
medicine manufacturing
1,047
$52,252
$52,913
$1,264,382
0.059
74,116
0.0647
$4,795
3255
Paint, coating, and
adhesive manufacturing
852
$27,099
$34,751
$593,240
0.073
43,450
0.0647
$2,811
3256
Soap, cleaning
compound, and
toilet preparation
789
$28,782
$39,386
$907,784
0.041
37,106
0.0647
$2,401
manufacturing
3259
Other chemical product
and preparation
927
$34,832
$39,078
$643,943
0.140
89,861
0.0647
$5,814
manufacturing
3261
Plastics product
manufacturing
8,101
$314,740
$38,959
$2,946,221
0.270
796,381
0.0647
$51,526
3262
Rubber product
manufacturing
885
$26,722
$33,974
$284,993
0.185
52,765
0.0647
$3,414
3272
Glass and glass product
manufacturing
1,848
$74,489
$39,697
$372,624
0.513
191,197
0.0647
$12,370
3273
Cement and concrete
product manufacturing
1,964
$95,218
$49,218
$748,669
0.323
241,705
0.0647
$15,638
3279
Other nonmetallic mineral
product manufacturing
1,889
$74,707
$39,864
$801,322
0.332
265,724
0.0647
$17,192
12 1 ENERGY MANDATES WILL ELIMINATE MINNESOTA JOBS 25
Table b (continued)
26 CENTER OF THE AMERICAN EXPERIMENT I 13
Quantity of
Electricity
MN Ave.
Retail
lndustri.l
Cost of of
Ave.
off
shipment)Annual
Purchased
Electricity
KWh)
Purchased
$151,121
$40,222
$1,026,545
449,780
$29,101
3315 Foundries 3,691
0.438
per
0.0647
3321
Forging and stamping
3,249
$159,932
$50,479
$1,625,032
0.198
322,348
0.0647
$20,856
3322
Cutlery and handtool
877
$35,842
$41,742
$811,598
0.107
86,654
0.0647
$5,607
manufacturing
3323
Architectural and
structural metals
4,263
$169,526
$41,208
$1,424,602
0.092
131,660
0.0647
$8,518
manufacturing
3324
Boiler, tank, and shipping
container manufacturing
1,432
$71,500
$47,034
$918,728
0.134
123,013
0.0647
$7,959
3327
Machine shops; turned
product; and screw, nut,
9,212
$423,824
$46,976
$2,079,557
0.136
281,928
0.0647
$18,241
and bolt manufacturing
3328
Coating, engraving,
heat treating, and allied
2,595
$97,922
$37,760
$476,808
0.217
103,358
0.0647
$6,687
activities
3329
Other fabricated metal
product manufacturing
4,234
$192,656
$47,853
$2,386,703
0.118
280,904
0.0647
$18,174
3331
Agriculture, construction,
and mining machinery
4,313
$173,903
$42,600
$2,488,188
0.055
135,734
0.0647
$8,782
manufacturing
3332
Industrial machinery
manufacturing
1,492
$72,396
$50,787
$836,206
0.066
54,801
0.0647
$3,546
3333
Commercial and service
industry machinery
1,053
$64,089
$59,063
$812,660
0.073
59,193
0.0647
$3,830
manufacturing
3334
Ventilation, heating,
air-conditioning, and
commercial refrigeration
2,143
$82,845
$40,393
$1,111,568
0.074
82,776
0.0647
$5,356
equipment manufacturing
3335
Metalworking machinery
manufacturing
3,163
$158,899
$49,634
$1,103,678
0.132
145,194
0.0647
$9,394
3336
Engine, turbine, and
power transmission
1,086
$40,711
$41,327
$464,681
0.084
38,874
0.0647
$2,515
equipment manufacturing
3339
Other general purpose
machinery manufacturing
6,343
$295,388
$48,246
$3,610,333
0.063
227,833
0.0647
$14,741
3341
Computer and peripheral
equipment manufacturing
2,262
$102,599
$46,656
$2,419,327
0.058
140,872
0.0647
$9,114
3342
Communications
equipment manufacturing
449
$18,850
$44,004
$348,933
0.045
15,529
0.0647
$1,005
3344
Semiconductor and other
electronic component
5,944
$240,225
$42,525
$2,438,853
0.131
319,605
0.0647
$20,678
manufacturing
3345
Navigational, measuring,
electromedical, and
control instruments
7,204
$335,594
$47,228
$6,177,436
0.055
336,954
0.0647
$21,801
manufacturing
26 CENTER OF THE AMERICAN EXPERIMENT I 13
Table 6 (continued)
•• ..••
Minnesota
Production Workers Estimated
Electricity
..
Ave. Intensity
of shipments
electricity
Quantity
Electricity
Usage and Spending
MN Ave.
Industrial
Cost of of
..-NAICS
..
..WagesEl
••• •••
Purchased
eryear
..-
•0•
•••
dollar
shipment)
$155,346 $62,342 $2,065,483 0.063
•
Electrical equipment
manufacturing
2,765
129,601
per KWh)
0.0647
$8,385
3359
Other electrical
equipment and
1,461
$71,968
$52,322
$1,033,010
0.155
159,818
0.0647
$10,340
component manufacturing
3362
Motor vehicle body and
trailer manufacturing
1,903
$82,097
$56,826
$647,102
0.055
35,639
0.0647
$2,306
3363
Motor vehicle parts
manufacturing
1,663
$63,153
$38,263
$656,589
0.116
76,440
0.0647
$4,946
3364
Aerospace product and
parts manufacturing
541
$21,561
$43,122
$297,583
0.109
32,310
0.0647
$2,090
3366
Ship and boat building
856
$26,170
$32,440
$279,044
0.085
23,609
0.0647
$1,527
3371
Household and
institutional furniture
and kitchen cabinet
3,729
$114,254
$33,666
$664,339
0.098
65,106
0.0647
$4,212
manufacturing
3372
Office furniture (including
fixtures) manufacturing
1,465
$65,148
$40,270
$634,264
0.094
59,679
0.0647
$3,861
3391
Medical equipment and
supplies manufacturing
6,019
$237,874
$43,774
$4,150,320
0.057
236,485
0.0647
$15,301
3399
Other miscellaneous
manufacturing
3,903
$134,667
$37,071
$1,226,974
0.085
104,285
0.0647
$6,747
31-33
All manufacturing
industries
191,634
$7,811,122
$42,602
$121,021,211
0.146
17,614,059
0.0647
$1,139,630
All MN Industrials
23,618,724
0.0647
1 $1,528,131
* Methodology: This report estimates quantiy of purchased electricity for each manufacturing industry at the state
level using data from the 2011 U.S. Census Annual Survey of Manufacturers (ASM). The ASM only reports electricity
purchased by each manufacturing industry at the national level, not at the state level. Estimating electricity purchased
at the state level from this data requires two steps. First, the nationwide purchased electricity energy intensity for each
manufacturing industry in 2011 is measured by dividing the total electricity purchased by the total value of shipments
for each industry. Second, the purchased electricity energy intensity of each manufacturing industry is then multiplied
by the industry's total value of shipments reported at the state level, which delivers the estimate of the total electricity
purchased by that industry in the state. The estimate for electricity purchased for all manufacturing industries utilizes a
similar methodology, but uses state -level energy intensity data from the U.S. Census Bureau's 2007 Economic Census.
This data should provide a more accurate statewide energy intensity measure. The national energy intensity measure
represents the national composition of manufactures, which is likely different than Minnesota. Using state -level data
yields a slightly lower energy intensity for Minnesota than the U.S.-0.146 kWhs per dollar of shipment for Minnesota
versus 0.151 for the U.S. The cost of the purchased electricity is then estimated by multiplying purchased electricity by
the statewide average retail price of electricity per kWh for industrials.
Sources: U.S. Census Bureau, 2011 Annual Survey of Manufactures, available at http://www.census.gov/manufactur-
ing/asm/; U.S. Energy Information Administration, Retail Sales of Electricity by State by Sector by Provider, 1990-2011
(Oct. 1, 2012), available at http://www.eia.gov/electricity/data/state/; and U.S. Energy Information Administration,
Average Price by State by Provider, 1990-2011 (Oct. 1, 2012), available at http://www.eia.gov/electricity/data/
state/.
14 1 ENERGY MANDATES WILL ELIMINATE [MINNESOTA JOBS 27
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please contact American Experiment at (612) 338-3605 or lnfo@AmericonExperiment.org.
Publications'' also can be accessed on our website at www.AmericanExperiment.org.
.... , Policy
Center of the American Experiment is a nonpartisan,
tax-exempt, public policy and educational institution that
brings conservative and free market ideas to bear on the
most difficult issues facing Minnesota and the nation.
rlfforslAilo nd Comtitivv
Energy II.av, irt'N inncsoul.'
�Ak
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A Tale of Three Cities:
Solar Power and the Irresistible Lure of "Free Money"
Center of the American Experiment develops and promotes policies which encourage
economic growth and a culture of individual, family and civic responsibility. Our
work—firmly rooted in conservative and free market principles—focuses on original
research, op-eds, public forums, legislative briefings, and various other means for
turning essential ideas into tangible action.
30
MAY`
A Tale of Three Cities0
:
Solar Power and the Irresistible Lure of "Free Money"
By Kim Crockett and Bill Glahn
Introduction
In recent years, a number of local governments
across Minnesota have been installing solar panels
to generate a portion of their electricity. Cities and
schools embrace these solar installations despite
the fact that they can take 40, 50 and even 100
years to pay for themselves. Local governments
are able to make these poor "investments" thanks
to cash grants from the federal government and
electric utilities. Though just a tiny corner of the
federal spending juggernaut, federal grants still add
to the nation's $17 trillion dollar debt. Subsidies
from electric utilities—mandated by the state—
represent a larger, slightly more visible burden on
Minnesotans in the form of higher energy rates.
In this report we look at three solar power projects
undertaken by local governments in Minnesota.
By exploring how each city made the decision to
accept cash grants, we can begin to get a picture
of how uneconomic projects get funded, with
each party involved making apparently rational
decisions in their own best but narrow interests.
In light of how these decisions were made, we offer
some alternatives for city officials to consider even
when they feel compelled to move forward with
uneconomic projects.
We were graciously welcomed by these cities and
found the staff, elected officials and volunteers
we interviewed to be well informed and well
intentioned. We do not want this report to be
viewed as a personal criticism. As we told the people
we interviewed, we bring a different perspective on
the project dollars they viewed as "free." Federal
dollars come from only two sources: current federal
taxpayers contributing to the national treasury and
future taxpayers who will pay back the borrowing
used to fund current spending. State mandated
subsidies push up energy costs which raise prices.
This may not be noticed by most people but it is
a burden for low-income Minnesotans and can
impact, for example, job growth in energy intensive
industries.
As noted above, we hope this report will encourage
citizens, city councils and their staff to think about
these opportunities differently in the future.
31 ✓_ CENTER OF THE AMERICAN EXPERIMENT
1
Sources of Solar Subsidies
Federal Stimulus Grants: Back in early 2009, Congress passed the American Recovery
and Reinvestment Act (ARRA), the $1 trillion annual economic stimulus package that was
intended to jump start the economy by funding worthy "shovel -ready" projects and putting
American workers back on the job. Energy projects were a particular emphasis under ARRA,
with $31 billion set aside for renewable energy and energy efficiency projects.' Drilling down
deeper, more than $3 billion worth of Federal taxpayer dollars were put toward funding
renewable energy and energy efficiency projects through state and local governments.' And
over $400 million went to fund projects in Minnesota.3 As with most efforts of this type, the
ARRA was passed during an economic crisis, but the projects actually funded would not be
installed until years later.
Minnesota Conservation Improvement Program (CIP): The State of Minnesota
mandates that all electric and natural gas utilities—regardless of ownership structure
(stockholder, cooperative, or municipal)—must provide energy efficiency programs to their
retail customers. A certain portion of CIP funds can be used to subsidize renewable energy.
Utilities spent $140 million in 2011 on energy efficiency and renewable energy through the
CIP.4
Renewable Development Fund: In return for the privilege of storing nuclear waste
in Minnesota, Xcel contributes money—$24 million in 2014—toward the Renewable
Development Fund, which provides production incentives and grants for renewable energy.
Renewable Energy Standard (RES): The State of Minnesota mandates that electric
utilities obtain a significant amount of their energy needs from renewable sources. The
mandate to buy higher cost renewables represents a substantial subsidy. Depending on
the utility, a requirement exists stating that 25 to 30 percent of all energy must come from
qualifying types of renewable power. As a practical matter, it turns out that the vast majority
of renewable energy acquired by state utilities has come from wind power. In 2013, the state
legislature passed an additional requirement that utilities obtain a further 1.5 percent of their
total energy requirements from solar power.
A number of other state programs also provide tax incentives, direct grants, and subsidized
loans to encourage the development of renewable energy. For a more complete list, see
Appendix A in Peter J. Nelson, Recommendations for Promoting Affordable and Competitive
Energy Rates in Minnesota (Center of the American Experiment 2011).
City of Kasson in the Zumbrota River Valley
Kasson, Minnesota, is a small but bustling and
growing community in the southeastern part of the
state, situated in the Zumbrota River valley just 13
miles west of Rochester and home to a little less
than 6,000 people. The City's population grew
almost 35 percent between the censuses of 2000 and
2010. Kasson has grown rapidly due to its proximity
to prosperous Rochester, home of the world-famous
Mayo Clinic medical complex. Unlike the other
cities included in this report, Kasson owns its own
electric utility, serving 2,600 customers (households
and businesses) within the community.
We interviewed Nancy Zaworski, the city's finance
director, and the town's Administrator, Randy
Lenth, about the decision making around that city's
solar power project.
At least in theory, power produced by the project
reduces the amount the City's utility needs to
purchase from its wholesale power provider, the
Central Minnesota Municipal Power Agency
(CMMPA). As a municipal utility owner, Kasson
is better positioned than other communities to
capture the value produced by the solar power
project, in the form of electricity, transmission, and
ancillary services they avoid buying at wholesale
because they are producing power locally.
)n owns its own
is utility, serving 2,600
mers (households
)usinesses) within the
iunity.
As you can see in the nearby photo, Kasson's City
Hall was also a good candidate for solar because
the panels are on an angled roof with a southern
exposure, though, when we visited on a sunny
winter's day in 2013, the roof was mostly covered in
snow (see photo).
Kasson is many years ahead of schedule in complying
with Minnesota's renewable energy mandate.
According to Kasson's City Administrator Randy
Lenth, "As a utility we are between 25 and 30
percent (for) renewable energy. We've purchased
a lot of wind energy and now we have the solar
components."
The solar project was installed in July 2011 (about
2'/z years after the passage of ARRA) on the roof of
City Hall. The 45 panels are capable of producing
10.35 kilowatts of electricity. Total project costs
came in at $65,250. Federal stimulus (ARRA) funds
covered 40 percent of the cost ($26,100) while City
funds covered the remaining 60 percent ($39,150).
With a price tag of $65,250, Kasson's solar
power project is only a small part of the capital
improvements being made in the growing city.
Larger projects include a new aquatic center, library,
and wastewater treatment projects.
33 CENTER OF THE AMERICAN EXPERIMENT I
3
Based on the total cost, the Kasson solar project
will never show a profit. Kasson estimates that the
solar panels will produce electricity worth $1,400
per year. At that rate of savings, the project will pay
back its installation cost of $65,250 in 46.6 years.
The equipment is under warranty for only 25 years
(some components for even shorter time periods)
and would not be expected to last much beyond
that date. If the solar panels or related equipment
require any repair or maintenance during the life of
the project, the payback period would stretch even
further in the future.
From the City's perspective, the Federal stimulus
funds are the equivalent of found money. Yet as
stated above, federal dollars come from only two
sources: current federal taxpayers contributing to
the national treasury and future taxpayers who
will pay back the borrowing used to fund current
spending. Proportionately, since so little of the
$26,100 federal grant was (or will be) generated
within the confines of Kasson, from the City's view,
the federal money is "free."
The City's share came from its electric utility in the
form of Conservation Improvement Program (CIP)
money. CIP is a state -mandated program requiring
each electric utility to spend an equivalent of 1.5
percent of the utility's annual revenue on projects
related to energy efficiency or renewable energy
(see sidebar).
In Kasson, the City Council serves as the governing
body for both the city government and the electric
utility. From its standpoint, the project was
essentially free: the Federal ARRA money came
from outside the city and the utility's contribution
came from money that would have been spent
anyway, under the CIP mandate.
Federal money turned out to be a strong incentive.
City of Kasson Finance Director Nancy Zaworski
commented on the $26,100 Federal stimulus grant
for city's solar project this way, "It's something that
we might not have done but for the grant."
`It's something that we might
not have done but for the grant,'
says Nancy Zaworski, Kasson's
finance director.
4 1 A TALE OF THREE CITIES 34
Kasson, of course, does not have to answer to
every federal taxpayer, it only has to answer to
the citizens that live within the city limits. If you
assume that the City's share of the project, $39,150,
could have been productively employed elsewhere
in town, then the payback period represents a more
palatable 28 years.
Provided that everything continues to work, the
solar equipment will wear out at about the time the
original City investment share is paid back. This
analysis does not take into consideration the time
value of money. To truly break even, in today's
dollars, the payback period would have to be much
quicker.
Beyond the financial return, the City points
to environmental benefits, like the amount of
CO2 emissions avoided (22.2 tons/year) and the
equivalent of trees saved ( 273) to illustrate the
environmental benefits produced by local solar
power.
"Part of our solar program," according to
Administrator Lenth, "is based on education,"
meaning that cities like Kasson feel an obligation
to "educate" the citizenry about the benefits of solar
power.
Bottom line, no business manager taking a total
cost perspective would have given Kasson's solar
power project a go ahead. Its costs, plus any
ongoing maintenance expense, will never be offset
by savings or revenue throughout the life of the
equipment. But from the City's perspective, with
the combination of "free" federal money and state -
mandated "conservation" spending that would have
happened anyway, the project is a clear winner.
Next stop, City of Royalton
The next stop on our municipal solar power tour
was the town of Royalton, Minnesota, located in
the central part of the state. It is a quiet, beautiful
town with many young families, but it is easy to
miss Royalton's true character unless you veer off
the beaten path of Highway 10. The population
in Royalton surged between the 2000 and 2010
censuses, increasing by more than 52 percent to
1,200 people, owing to its proximity to the regional
center, St. Cloud, located 21 miles to the south.
At one time, Royalton had a city -owned electric
utility, but is now served by the Duluth -based,
Minnesota Power Company.
As with Kasson, Royalton participates in the
public-private partnership GreenStep Cities.
GreenStep recognizes local communities for
efforts in conservation, renewable energy, and
environmental protection. Among dozens of other
activities, installing a city -owned solar power
project earns the community additional points
under the GreenStep recognition program.
Achieving the increasing levels of recognition under
GreenStep does not generate any cash or confer
any direct financial benefits on the participating
city. However, city officials are recognized in front
time, Royalton had
awned electric utility,
iow served by the
-based, Minnesota
Company.
of their peers in GreenStep publications and annual
awards events conducted by the statewide League of
Minnesota Cities.
Earlier this year, we interviewed Royalton Mayor
Andrea Lauer, now serving her second term in the
Post.
The Royalton solar project was written up as a case
study by the Minnesota Department of Commerce,
the state agency which served to distribute energy-
related Federal ARRA grants.' Like Kasson's
project, the Royalton solar panels were installed on
the roof of City Hall but we could not see them
because the roof is flat.
The Department's write up quotes the mayor as
saying,
We were excited to see the benefit to the
environment and to the bottom line for our city.
Thanks to federal stimulus funds, we were able
to provide work for two Minnesota companies
and save energy and dollars for the residents of
Royalton.
Total installation cost of the 7.55 kW solar array
amounted to $84,000 for the project completed in
November 2011. Federal ARRA dollars contributed
35 CENTER OF THE AMERICAN EXPERIMENT
E
$33,600 (or 40 percent) of the project cost.
Minnesota Power provided an additional $16,000
rebate to support the project.
The remainder, $34,400 (or 41 percent), was
provided by the city, courtesy of Royalton's taxpayers.
According to the Department of Commerce, the
project reduces City Hall's electricity requirements
by 20 percent, generating $850 in annual savings.
Mayor Lauer told us, "The part that really appealed
to me on this was the fact that the company that
manufactures the solar panels is in Minnesota.
The company that is leasing the project is also a
Minnesota company. The company that installed
the solar panels is a Minnesota company. It was
really important for me to know that Minnesota
companies were benefitting from this project, not
just the City of Royalton."
As in Kasson, from Royalton's viewpoint, the federal
funds were "free" money, with little of the taxpayer -
funded grant having been provided by Royalton
taxpayers. Likewise, Royalton represents only a tiny
fraction of Minnesota Power's customer base. For
Royalton's purposes, the costs of Minnesota Power's
rebate of $16,000 and making up the $850 in lost
sales will be funded by utility customers in Duluth,
Grand Rapids, and other cities served by Minnesota
Power.
For a net upfront investment of $34,400, Royalton
is able to capture the $850 in annual savings, for
a simple payback of 40.5 years. Even assuming
no repair or maintenance expense along the way,
6 1 A TALE OF THREE CITIES 36
Royalton stands little chance of recovering its
investment before the solar equipment reaches the
end of its useful life.
When you consider the total cost of $84,000,
however, an annual savings of $850 results in
a simple payback of 98.8 years. But that is not
Royalton's perspective.
As Mayor Lauer explains, "Any city that's going
to decide to do something like this, whether it's an
energy project or whether it's a wastewater project,
if there is money out there that will help you do
the project, you are going to take it. Because, if you
don't, there is somebody else who is going to. But
it has to make sense to your budget first. Then you
may look at other benefits."
Mayor Lauer considers the project a success for
Royalton when viewed in combination with other
energy efficiency efforts undertaken around the
same time. All told, Royalton was able to reduce
City Hall's net energy purchases by 39 percent,
when accounting for the additional conservation -
related savings. (We did not ask about the cost
of these additional measures encouraged by the
GreenSteps program.)
Again, no financial manager taking a total cost
perspective would support an investment taking a
century to pay off. Still, the Royalton solar project
was considered enough of a success to draw a visit
to the town by U.S. Senator Al Franken as part of a
statewide tour of solar projects.b
On to Green Edina where "It's a demonstration project."
Our last stop was Edina, Minnesota, a city adjacent
to Minneapolis and a community considerably
larger than Kasson or Royalton. With a population
just over 49,000, this fully -developed western suburb
added only 500 people between 2000 and 2010.
Unlike Kasson, the city does not own an electric
utility. The electricity provider for both city
government, local residents and businesses is Xcel
Energy.
We interviewed Edina's city manager, Scott Neal,
about the city's solar power project which was
installed at the end of 2011. Neal joined Edina's
staff in 2010, after a stint as the city manager of
neighboring Eden Prairie. We also met retired
attorney, Dianne Plunkett Latham, a resident
and active volunteer on the Edina Energy &
Environment Commission. She is also chair of the
Recycling & Solid Waste Working Group. The
City's environmental engineer, Ross Bintner, also
joined the meeting.
When discussing the origin of the project, Plunkett
Latham said, "It was really grassroots level. It came
from our Energy Working Group. On that we have
Bill Sierks who works for the Pollution Control
Agency and we also had several members who work
in the solar industry"
The City certainly is enthusiastic about trying new
"green" technologies. For example, it now has an
i does not own an
,ic utility. The electricity
ider for both city
rnment, local residents
businesses is Xcel
3y
electric car for staff to use for inspections. The
cost of the car was defrayed in part by a Pollution
Control Agency grant of $5,000 that requires Edina
to "promote local air quality and sustainability
initiatives at the City through the use of [a] colorful
vehicle wrap...." The total cost of the car and the
vehicle wrap are not included on the website.
Like Kasson and Royalton, the City of Edina belongs
to the GreenStep Cities program. Edina was one of
a handful of cities participating in a pilot project
that served as the predecessor to GreenStep. Edina
lists the city -owned solar power array atop City Hall
as one of its achievements under the GreenStep
program. In 2012, it was announced that Edina had
37 CENTER OF THE AMERICAN EXPERIMENT I 7
According to GreenStep Cities,
Participating cities earn awards in the form of
"recognition blocks" made from reclaimed urban
wood. When a city completes step three, it will
have a set which recreates the logo of GreenStep
Cities and reflects the community's sustained
commitment and continuous improvement.'
(See Royalton photo)
Edina reports that the 24 -kW solar power project
saves approximately $1,300 in electricity purchases
per year. Even though the Edina solar project is larger
than the Kasson and Royalton projects combined,
the electricity purchase savings are relatively
smaller. That's because Edina's City Hall building
hosts an on-site diesel electric generator to support
the operations of the local police department. With
the local generator available, Edina purchases
electricity from Xcel at a discounted price, further
reducing the value of the City Hall -produced solar
electricity.
The solar panels were installed during December
2011.8 Daily electricity production of the array can
be monitored at http://home.solarlog-web.net/953.
html. Total installation costs for the project
amounted to $200,000. A Federal ARRA grant
of $80,000 offset 40 percent of the project's cost.
The remaining $120,000 was covered by a grant
from Xcel, part of a rate -payer funded program to
promote both solar power and Minnesota-based
manufacturers of solar power components.
In the end, the City of Edina contributed nothing
to the project's costs, save the space on the roof of
City Hall. However, the City does stand in line to
pocket the $1,300 per year in electricity purchase
savings enabled by the solar power production.
When asked about the need and the goal for solar
power for the residents of Edina, Plunkett Latham
said, "We wanted to stimulate residents to use
this sort of technology which does not produce
greenhouse gases. If the City has experience doing
that and can help answer questions about it, then
residents have more confidence in the technology
and want to try it themselves. It's a demonstration
project." When asked if they knew how the panels
would be disposed of at the end of their useful life,
the City did not know.
If you are a local resident
and property taxpayer in Edina,
the solar power project looks
like a great deal. Local residents
paid nothing down and look to
save $1,300 in the City's annual
operating budget for the next
couple of decades.
8 1 A TALE OF THREE CITIES 38
If you are a local resident and property taxpayer
in Edina, the solar power project looks like a great
deal. Local residents paid nothing down and look to
save $1,300 in the City's annual operating budget
for the next couple of decades, barring any ongoing
repair and maintenance costs. The city government
of Edina, therefore, made the only logical choice:
take the "free" money and "free" savings of this
apparently costless (to the city) project.
Once again, because it bears repeating, if you were
managing these resources based on the full cost to
all, the $200,000 investment in Edina solar power
looks to be a terrible decision. The $200,000 initial
cost, divided by $1,300 per year in annual savings,
produces a 153.8 -year payback period.
According to City Manager Scott Neal, "There was
a moment there, even with all the subsidies, we
weren't sure that we were going to do it because the
return on investment was not quite good enough."
But the supplier ("tenKsolar") lowered the price,
putting the City's cost at zero.
In reality the project will never pay for itself, because
the equipment installed on the roof of Edina City
Hall has a useful life of only a few decades, at most,
not a century and a half.
Federal Dollars
Utility Ratepayer Dollars
Local Dollars
Total Cost
kW Produced
Payback Period
Service Life of Equipment
Reduction in net energy purchases ($/Year)
How should local governments
respond to these stimulating offers?
To review, city officials cited a number of reasons
for why they moved ahead and installed solar
panels. Not surprisingly, all were strongly swayed
by the financial incentives from the federal
government and the utilities. And all were buoyed
by the recognition and kudos they received from the
GreenStep Cities recognition and other good press.
Kasson and Edina officials also cited the perceived
environmental benefits and the public education
opportunities. Royalton considered supporting
Minnesota jobs another important factor. Finally,
Royalton made the persuasive point often heard in
city council meetings across the state, "if we don't
use the subsidy, someone else will."
How do these reasons stack up? Are there alternative
ways to respond to the allure of someone else's
money?
To begin, the federal money from the ARRA
"stimulus" programs, while discontinued, could
be offered again in one form or another so it bears
repeating that federal tax dollars are not "free" even
if you are not a federal taxpayer. And they have
not proven to be particularly stimulating to the
economy either.
Supporting "Minnesota jobs" sounds really great,
especially in the midst of our sluggish economy, but
$80,000
$26,100
$120,000
$39,150
$0
$0
$200,000
$65,250
24 10.35
153.8 46.6
$33,600
$16,000
$34,400
$84,000
7.55
98.8
25 25 25
$1,300 $1,400 " $850
it does not hold up to scrutiny either. Since solar
projects do not provide any true economic payback,
these projects simply cannot offer a net gain in jobs.
To the extent they do stimulate certain jobs, the
jobs tend to be dependent on government programs
rather than real demand for products and services;
they are "make-work" type jobs and as such, short
term. "Make-work" industries feed into the kind of
boom and bust economic cycles that we have seen
in the renewable energy industries in Europe.
Environmental benefits are also hard to demonstrate.
First, putting aside the whole debate about global
warming/climate change and the contention that
carbon emissions are warming the planet and/
or changing our climate, solar projects are not an
effective strategy for reducing carbon emissions.
While solar panels may indeed reduce carbon
emissions, the projects of the scale that a typical
city would consider are simply too small to create
any measurable reduction in carbon emissions.
Even if you accept the argument that all these small
efforts add up to a lower overall emissions rate,
money spent on solar panels would almost certainly
offer a better result if spent on other conservation
measures that deliver largerm more immediate
returns. As these cities demonstrate, solar projects
typically take decades to pay for themselves, even
when just the city's portion is taken into account.
This "local" approach does not take into account
the fact that the production of solar panels uses
energy—and creates polluted water and toxic
39 CENTER OF THE AMERICAN EXPERIMENT
7
sludge that has to be properly disposed of at often
far -way disposal sites. Furthermore, there is also no
plan for disposing of these large panels when they
break or wear out.
To maximize actual
environmental benefits as
opposed to illusory ones,
cities may wish to instead
spend money on other local
projects.
To maximize actual environmental benefits as
opposed to illusory ones, cities may wish to instead
spend money on other local projects. For example,
$200,000 would have gone a long way toward
improving Nine Mile Creek in Edina. If they're
really worried about losing out on a matching
subsidy, there are other environmental matching
grants, both public and private, that may deliver a
better return to society.
As for the goal of education, we reject the idea that
government should be using taxpayer dollars to
"educate" residents about the benefits of solar power
through uneconomic demonstration projects. If the
goal truly is education, cities should be presenting
a full and transparent accounting of the cost and
benefits—both economic and emission reductions
as part of the decision-making process, along with
a recognition that the manufacturing and disposal
of solar panels also have environmental costs. Then
if residents and their elected officials still want to
proceed, at least they do so on a fully informed basis.
Such an analytical approach would be the
best "demonstration" to citizens who might
be considering solar panels for their homes or
businesses. And surely citizens are quite capable of
making those decisions without taxpayer funded
"education" by local government.
10 1 A TALE OF THREE CITIES 40
We wonder of the City of Edina, for example, would
have proceeded with the much -publicized project
if it had to post on the news releases and website
alongside the photos of the solar project a 154 -year
payoff period.
The moral of the story? Citizens must
educate city hall.
These vignettes go some distance to explaining why
it's so hard to gain control over America's finances
and any accountability over Minnesota's renewable
energy subsidies.
In each instance in the three featured cities, diligent
and conscientious city officials and volunteers
acted in the interest of local taxpayers and in a
manner likely to earn individual and community
recognition from higher-level authorities and high-
ranking elected officials.
The utilities involved in each transaction, as
members of one of our most heavily regulated
industries, were merely complying with state
mandates to promote renewable energy and
local manufacturing. They were not asked to vet
projects for economic viability or to maximize
environmental benefits, but only to process valid
claims from conforming applicants.
At no point did any market, or public official, or
other deur ex machina intervene and say "no" to any
of these uneconomic investments. From a total cost
perspective, not one of these projects represented
a close call. Further, the environment would be
far better off if the subsidies were directed to more
effective projects. All should have been rejected
out of hand.
The Star Tribune recently reported that "more city
buildings around the metro are sprouting solar
panels."9 These cities are following the same logic as
our neighbors in Kasson, Royalton and Edina. We
strongly encourage city officials to instead follow
the example of the City of Crystal's mayor and
finance director. As reported by the Star Tribune,
Crystal Mayor Jim Adams and his finance director
ran the numbers and concluded that "it is unfair to
use state and federal tax dollars or corporate rebates
to subsidize a local solar power project." Adams
explained how it "is fiscally irresponsible because
that money comes from citizens' state and federal
taxes and Xcel funds."
According to the Star Tribune,
Adams was one of the three council members
who voted against the projects. They were
skeptical of vendor Newport Partners' estimates
of low maintenance and projected energy savings
resulting in a $365,000 net advantage over 40
years.
City Finance Director Charles Hansen used more
conservative inflation and equipment maintenance
costs that indicated a longer period to recoup costs.
In a memo, he cautioned that over 40 years, "no
one can reliably predict if this project will produce
a net financial savings ..."
Crystal's mayor deployed common sense and the kind
of cost benefit analysis we have suggested. It should
have been enough to stop an uneconomic project
but he was out -voted by the city council. While
Mayor Adams did not prevail, he demonstrated
the kind of leadership that should encourage other
elected officials to look behind the numbers.
It is indeed possible to get off the bandwagon
and say "no" to these projects. Our recommended
approach, however, will only succeed if elected
officials hear from city residents. And therein lies
the moral to this story about three Minnesota cities:
ask your elected officials to think beyond the city's
narrow interest and the temptation of "free money"
for your city. Insist on a more sophisticated analysis
like the one presented here and used by the city
finance director in Crystal. In the end, elected
officials and their staff must answer to the electorate
but only if they show up and ask questions. ■
About the Authors
Bill Glahn served as Gov. Tim Pawlenty's top energy
official—for 21/2 years until January 2011—as Director
of the Minnesota Office of Energy Security and a
Deputy Commissioner in the state's Department
of Commerce. He has since returned to Piedmont
Consulting, the firm he founded in 2006. Prior
to founding Piedmont, Mr. Glahn served as Vice
President and Controller of the Minnesota Municipal
Power Agency—an electric utility serving 11 cities
across Minnesota. He has a B.A. in Economics and an
MBA from the University of Virginia.
Kim Crockett is American Experiment's Chief
Operating Officer, Executive Vice President and
General Counsel. She is the Executive Director
of Minnesota Free Market Institute at Center of
the American Experiment. Prior to joining the
Minnesota Free Market Institute, Kim served as
corporate counsel to a national bank and had a
long legal career in commercial real estate law. She
has a B.A. in Philosophy from the University of
Minnesota and a J.D. from Penn Law (1987).
Endnotes
1 U.S. Department of Energy, "Recovery Act," at http://
energy.gov/recovery-act.
2 U.S. Department of Energy, Energy Efficiency and
Conservation Block Grant Program, at http://energy.gov/
eere/wipo/energy- efficiency - and- conservation- btock- grant -
program.
3 Recovery.gov, "Recipient Projects," at http://www.
recovery.gov/arra/Transparency/RecoveryData/Pages/
RecipientReportedDataMap.aspx.
4 Minnesota Department of Commerce, Minnesota
Conservation Improvement Program Energy and Carbon
Dioxide Savings Report for 2010-2011 (October 1, 2013): pg.
17, available at http://archive.leg.state.mn.us/docs/2013/
mandated/ 131112. pdf.
5 Minnesota Department of Commerce, "Case Study:
Royalton City Hall," at http://mn.gov/commerce/energy/
topics/resources/Success-Stories/Cities-Counties-Schools/
royalton_city_hall. j sp.
6 "Sen. Al Franken to visit Royalton as city installs solar
panels at City Hall," Morrison County Record, November 8, 2011,
available at http://archives.ecmpublishers.info/2011/11/08/
sen -al-franken-to-vis it- royalton-as-city- installs -solar -panels -
at -city -hall/.
7 Minnesota Pollution Control Agency, "The Minnesota
GreenStep Cities Program," at http://greenstep.pca.state.
mn.us/aboutProgram.cfm.
8 Scott Neal, "Solar Panel Week," City Manager Scott
Neal's Blog, December 1, 2011, at http://www.edinamn.gov/
wordpress/solar-panel-week/.
9 Jim Adams, "More city buildings around the metro are
sprouting solar panels," Star Tribune, January 27, 2014, available
at http://www.startribune.com/local/242319001.html.
41 �� CENTER OF THE AMERICAN EXPERIMENT
11
12 1 A TALE OF THREE CITIES 42
43 CENTER OF THE AMERICAN EXPERIMENT I 13
To obtain copies of any of our publications
please contact American Experiment at (612) 338-3605 or Info@AmericanExperiment.org.
Publications also can be accessed on our website at www.AmericanExperiment.org.
Eti. rrirtrmt �td.r t is
aiforij.rMe and
F:nk:r�pc in t. in
Center of the American Experiment develops and promotes policies
which encourage economic growth and a culture of individual, family
and civic responsibility. Our work—firmly rooted in conservative and free
market principles—focuses on original research, op-eds, public forums,
legislative briefings, and various other means for turning essential ideas
into tangible action.
612-338-3605
American Experiment.org
Info@AmericanExperiment.org
CITY OF EDINA MINNESOTA
ENERGY & ENVIRONMENT COMMISSION
March 2014 — February 2015 Term SUMMARY AND DRAFT SCHEDULE
Choose Month/Date for 2014 JOINT EEC / CC Workshop
March 13, 2014 Meeting
Item of focus: Elect Chair and Vice Chair. Sierks Advisory proposals (WP1) (PACE) (Water bottles) (GHG emissions)
Presentations: Bill Sierks
April 10, 2014 Meeting
Item of focus: WP6
Presentations: Dianne Plunkett Latham
May 8, 2014 Meeting
Item of focus: WP6, PACE, June 3 meeting prep.
Presentations: Gayle Prest, Sue Bast,
June 3, 2014 EEC/CC Joint Workshop
Item of focus: WP6, WP1, WP4
Presentations: Dianne Plunkett Latham, Bill Sierks, John Heer, Sarah Zarrin
June 12, 2014 Meeting
Item of focus: WP1,
Presentations: Tim Barnes, Bill Sierks
July 10, 2014 Meeting
Item of focus: Community Solar, Workplan
Presentations:
45
Item
Workplan
WK
City building energy project
March motion to table building advisory, April motion to
recommend approach of deeper energy efficiency savings,
maximized greenhouse gas reduction, and energy savings.
WP2
Environmental purchasing policy
WP3
Energy efficiency community outreach
May motion for PACE advisory communication.
WP4
Integrate comprehensive plan chapter 10 into
city operations.
WP5
Business recycling task force
WP6
Local food
April motion to research council advisory to use Fred Richards
as second community garden.
ORI
Green Step Cities Reporting
OR2
Urban Forestry
OR3
Solid Waste and Recycling
March motion to table and modify water bottle advisory, April
motion to approve water bottle advisory.
OR4
Support city and commission activities
WP = work plan number. OR = ongoing responsibility number
Choose Month/Date for 2014 JOINT EEC / CC Workshop
March 13, 2014 Meeting
Item of focus: Elect Chair and Vice Chair. Sierks Advisory proposals (WP1) (PACE) (Water bottles) (GHG emissions)
Presentations: Bill Sierks
April 10, 2014 Meeting
Item of focus: WP6
Presentations: Dianne Plunkett Latham
May 8, 2014 Meeting
Item of focus: WP6, PACE, June 3 meeting prep.
Presentations: Gayle Prest, Sue Bast,
June 3, 2014 EEC/CC Joint Workshop
Item of focus: WP6, WP1, WP4
Presentations: Dianne Plunkett Latham, Bill Sierks, John Heer, Sarah Zarrin
June 12, 2014 Meeting
Item of focus: WP1,
Presentations: Tim Barnes, Bill Sierks
July 10, 2014 Meeting
Item of focus: Community Solar, Workplan
Presentations:
45
August 14, 2014 Meeting
City Infrastructure Tour — PW Building +virtual tour (flooding, neighborhood reconstruction, residential redevelopment),
Golf Dome, Sports Dome, Public Safety Training Facility, Cold Storage?
September 11, 2014 Meeting
Item of focus: Create 2014 Workplan (Due September ?? to Karen Kurt)
October 9, 2014 Meeting
Item of focus:
Presentations:
November 13, 2014 Meeting
Item of focus:
Presentations:
December 11, 2014 Meeting
Item of focus: Prepare and review annual reports, awards, recognition.
Presentations:
January 8, 2015 Meeting
Item of focus:
Presentations:
February 12, 2015 Meeting
Item of focus:
Presentations:
Staff Suggested Topics
Three Rivers regional trail project and Nine Mile Creek stream stabilization projects
The future public uses for Fred Richards golf course
Urban ecology, nutrient flows and clean surface waters.
Natural resource management, wildlife habitat and comp plan chapter 9
Local energy conservation strategies
Regional energy systems
Urban soils, contamination, site development and wellhead protection.
Consumer goods, materials and waste.
Growth of personal device energy use.
46
REMOVE LEAVES
FROM THE STREET
• Rake leaves, seeds and grass
clippings out of the street and gutter.
• Compost on site, bag for collection,
or take to community compost program.
PREVENT EROSION
• Phosphorus attaches to soil.
Keep soil from washing into the street.
FERTILIZE THE LAWN,
NOT THE LAKES AND RIVERS
• Choose a zero -phosphor
fertilizer. Many lawns have
adequate soil phosphorus and
will remain healthy without
adding more.
• If you think your lawn needs
phosphorus, test your soil first.
For information call INFO -U at
612-624-2200, message 468,
or visit soiltest.coafes.umn.ed
*sweep spiiieo Teri iizer
off paved surfaces.
• Remember, compost and manure
contain phosphorus too.
CLEAN UP AFTER PETS
• Scoop the poop.
Pet waste contains phosphorus
as well as harmful bacteria.
• Don't feed the geese.
AX
. zs,
Anything that enters
a storm drain
goes to a local lake or river.
It does not go to a waste water treatment facility.
ly Do you know you live on waterfront property? You do if there is a storm
v
drain nearby! Storm drains carry runoff water to local lakes and rivers.
Whatever washes off your yard and street can pollute these waters.
1,0That includes lawn fertilizer, grass clippings, pet waste, and tree leaves and
s 04,6 seeds—all sources of phosphorus, the plant nutrient that
oA turns lakes and rivers green with algae.
N
ryF Keep your runoff clean!
sroRM Keep our lakes and rivers clean!
sF
w�-
ILIZER
6
5� Off`
°
e �� Qty KEEPTHE
o A? PAVEMENT CLEAN
Sweep up
`.r grass clippings, soil
oQ and fertilizer
p i from driveways,
sidewalks,
and streets.
You may be
fertilizing more
than your grass.
The storm drain in your street is a link to our
lakes and rivers. The choices you make when
caring for your lawn directly affect water quality.
A common cause of lake and river pollution is
phosphorus runoff. In response to this, Minnesota
has a law restricting the use of phosphorus lawn
fertilizer. Although phosphorus is important for
grass growth, many lawns have adequate soil
phosphorus and do not need further phosphorus
fertilization. Ifyou suspect your lawn is in need of
phosphorus, soil test first to make sure before using
a phosphorus lawn fertilizer.
Phosphorus turns lakes and rivers green. Phosphorus
stimulates the growth of algae in lakes and rivers.
This crowds out other water plants and reduces
oxygen available to fish. The result is unattractive,
foul-smelling water that is bad for fish, wildlife, and
humans.
Nitrogen, not phosphorus, greens up grass.
Phosphorus -free lawn fertilizer still contains nitrogen,
the plant nutrient that greens up grass.
To keep our lakes and rivers healthy, we need to
manage phosphorus carefully. Read on to learn
how you can reduce phosphorus runoff from lawn
fertilizers and other sources!
Minnesota Phosphorus
Lawn Ferti I izer Law —
January 1, 2005
Fertilizers containing phosphorus cannot be used on lawns
in Minnesota unless the following exceptions apply:
• A new lawn is being established by seeding or
laying sod.
• Soil testing shows need for phosphorus
fertilization.
• Fertilizer is being applied to a golf course by
trained staff.
For soil testing information, contact the University of
Minnesota Soil Test Lab at 612-62S-3101 or visit them at
their http://soiltest.coafes.umn.edu website.
Look for the middle number!
A string of three numbers
on a fertilizer bag shows
its analysis — the middle
number being phosphate
(phosphorus) content.
A "zero in the middle" means
phosphorus -free fertilizer.
More information on the law
is available at the Minnesota
Department of Agriculture
website www.mda.state.mn.us;
click on "Water & Land" then on
"Lawn Care & Water Quality."
STA, a, For more information, contact:
c @ Edina Engineering Department
mail@EdinaMN.gov
(952) 826-0371
www.EdinaMN.gov
CENTER OF THE
,:r-�AM E RI CAN
EXPERIMENT
Building a Culture of Prosperity for Minnesota and the Nation
June 16, 2014
Mayor Jim Hovland
City of Edina
4801 W. 50th St.
Edina, MN 55424
Dear Mayor Hoveland,
Bill Glahn, who is a senior fellow at the Center, and I conducted a survey of three "GreenStep"
cities (Kasson, Royalton and Edina) that installed solar projects encouraged by Minnesota's
GreenStep program and funded by government grants. We wanted to explore how each city
evaluated these solar projects.
I have enclosed a copy of our report, A Tale of Three Cities: Solar Power and the Irresistible
Lure of "Free Money'; for your review. Bill and I visited during the winter of 2013 and had
hoped to get back to you sooner, but more urgent projects pushed this to the back burner.
We were graciously welcomed by each city and came away impressed with the professionalism
and good intentions of the city councils and staff. We warned our hosts that we have a strong
point of view on how to analyze these project opportunities and the use of federal and state
funding, particularly in light of our massive and growing federal deficit.
As we noted in our paper, tax dollars are never "free." They can only come from two sources:
current taxpayers who contribute to the national treasury and future taxpayers who will have to
pay back the borrowing used to fund current spending.
We are also concerned about the impact of Minnesota's mandated energy subsidies on the price
of energy prices. This may not be noticed by affluent Minnesotans but these higher energy prices
that show up in our monthly bills hurt job creation, especially in energy intensive industries. This
means that all Minnesotans are paying higher energy prices but also might be missing out on
good job opportunities that will not be offset by job gains in the "green" sector. This is especially
hard on low income Minnesotans who may be choosing between groceries and paying their
electric bill.
I have enclosed a study by my colleague, Peter J. Nelson, Energy Mandates Will Eliminate
Minnesota Jobs, on the expansion of energy mandates in 2013.
Our opponents counter that these costs are well worth the gains we will see in a cleaner
environment or the reduction of greenhouse gases, etc. We take the position that Minnesota's
energy policy is not producing the environmental gains promised by renewable energy standards-
-- and in fact lead to greater carbon emissions and other negative consequences for our natural
8441 Wayzata Boulevard * Suite 350 * Golden Valley, MN 55426
612-338-3605 * Fax 763-710-7429 * AmericanExperiment.org
environment. Moreover, higher energy costs place Minnesota in a less competitive position as
we compete for talent and capital in a tough global market. (You can find various reports on our
website, or contact us for further information. For example, see The High Cost of Minnesota's
Renewable Energy Standard.)
We do not want our report to be taken as a personal criticism of the people or cities we
interviewed. After all, the conventional wisdom is that federal grants are "free" money and if you
do not take the grant, someone else will. I used to struggle with that issue when I served as a city
councilwoman in Deephaven.
Instead, we encourage our local elected officials to approach these opportunities with a sharper
pencil and a less parochial view of the true costs and benefits. We offered the approach taken by
the Mayor of Crystal as a good example. Too much is at stake in terms of addressing our national
debt, encouraging job creation and protecting our precious natural environment.
Again we thank you for your hospitality. We were charmed by your lovely, well managed towns
and hope this report does not mean we cannot come back to visit someday!
Sincerely yours,
Kim Crockett, Esq.
Chief Operating Officer I Executive Vice President I General Counsel
cc Joni Bennett
Mary Brindle
Josh Sprague
Ann Swenson
Scott Neal V
Diane Plunkett Latham
-2-