Energy 101: What is the Minnesota Public Utilities Commission?

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If you follow Fresh Energy, you’re undoubtedly aware that much of our energy policy work involves the Minnesota Public Utilities Commission (PUC). But you may not know much more than that.

The PUC, its mission, and its everyday regulatory work might seem murky—and prohibitively wonky—for anyone who doesn’t live and breathe energy policy. (We know that’s most of you!) But the PUC has a huge impact on your life, shaping everything from how much you pay for electricity to where wind farms are located to whether coal plants are retired.

The PUC will be tackling some big issues in 2014; it’s time to get familiar with the five-member group that makes Minnesota’s energy system work. To help, we’ve put together an Energy 101 that explains the basics.

WHAT IS THE PUC?

The PUC is a state agency that regulates Minnesota’s public utilities. This includes electric and natural gas utilities—like Xcel Energy and CenterPoint Energy—and, to a lesser extent over the past decade, telephone service. It’s made up of five commissioners, appointed by the governor and confirmed by the Senate, who serve six-year, staggered terms. By law, no more than three of the five commissioners can be members of the same political party, and at least one commissioner needs to live outside of the Metro area. The commissioners work full time at the Commission’s office in downtown St. Paul.

From left: Dan Lipschultz, Beverly Jones Heydinger, Nancy Lange, David C. Boyd, Betsy Wergin

WHAT DOES THE PUC DO?

When you flip a light switch, you instantly receive reliable, affordable electricity. It’s an assumption in our modern society that this fact will never change. We also assume the utility providing us the electricity isn’t going to charge obscene amounts, add arbitrary service fees, or produce electricity without regard to our health and safety.

The PUC exists to ensure the truth of this assumption. The PUC’s stated mission is to “create and maintain a regulatory environment that ensures safe, reliable and efficient utility services at fair and reasonable rates.” These means that, at all times, the Commission’s job is to make sure utilities’ business decisions are prudent, protect the public interest, and provide energy that’s affordable, reliable, and increasingly clean and efficient.

The Commission’s tasks include the following:

  • setting rates and terms of service for Minnesota’s investor-owned gas and electric utilities (like CenterPoint and Xcel Energy, among others)
  • making sure utilities are planning for future energy needs and have a way to meet them affordably and efficiently
  • issuing construction permits for power plants, transmission lines, and pipelines, site permits for large power plants, including wind farms and solar projects, and route permits for transmission lines and pipelines
  • resolving disputes between the public and Minnesota’s utilities

For example, when a utility wants to increase the rate you pay for electricity, it must go before the Public Utilities Commission for approval. The Commission will then go through an extensive process of analysis, hearings, and deliberation to determine whether that rate increase is justified or in the best interest of Minnesotans.

A SHIFT IN FOCUS

Historically, the majority of Minnesota’s electricity has always come from coal—meaning much of the PUC’s work over in the 20th century has dealt with large, centralized power plants and the infrastructure that goes with them. A number of factors have promoted a shift in focus for the Commission over the past few years. Wind, solar, and efficiency are increasingly becoming our most practical and affordable energy sources, while the Minnesota Legislature has passed many groundbreaking policies that require Minnesota to move toward cleaner energy sources.

Within the last few years, more of the PUC’s has dealt with retiring coal-burning power plants, requiring utilities to invest in efficiency measures, and making sure the cost of our electricity reflects its true impact on our health and environment. With Governor Dayton’s appointment of Dan Lipschultz to the PUC earlier this month, Minnesota now has a PUC with a majority of members committed to creating a prosperous low-carbon electricity system.

GETTING INVOLVED

In 2014, the PUC will make important decisions that will have a big impact on your energy bills, the health of your kids, and the future of Minnesota. Issues before the Commission are often open for public comment, meaning you get to weigh in on the future of Minnesota’s energy system.

For example, in 2013, the PUC voted unanimously to require Xcel Energy to analyze the possible retirement of Sherco 1 and 2 in Becker, Minnesota—Minnesota’s largest carbon polluter. In the months prior to the vote, thousands of Minnesotans weighed in: Fresh Energy helped generate nearly 11,500 comments to the PUC from Minnesotans supporting the replacement of Sherco with clean energy.

Along with comment opportunities, the Commission’s hearing and meetings are open to everyone. We encourage you to learn about the issues before the Commission and attend a hearing that interests you.

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