Minnesota takes big step toward counting the real costs of burning coal

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On September 4, regulators at the Minnesota Public Utilities Commission (PUC) voted unanimously to move forward on Fresh Energy’s 2013 petition asking it to update the real health and environmental costs of fossil fuel electricity.


A 1992 Minnesota law (for which Fresh Energy advocated) requires the PUC to use cost values in resource acquisition and planning decisions that reflect the real costs that pollution from electricity generation imposes on society. Burning coal causes enormous health expenses due to premature death, heart disease, asthma attacks, and other lung diseases. Requiring regulators to use these external costs in planning future electricity investments is intended to put clean energy on a level playing field with burning coal—the top cause of global warming.

In 2013, Fresh Energy asked the PUC to establish or update health and environmental values for four different pollutants: sulfur dioxide, nitrogen oxide, fine particulate matter, and carbon dioxide. The planning values Minnesota currently uses have not been updated in nearly 20 years, and in that time there have been substantial advances in the scientific understanding of the health and environmental damages caused by burning fossil fuels. The values Minnesota now uses are no longer scientifically valid.


The PUC’s latest decision now sends the case to the Office of Administrative Hearings with a clear directive and supported by testimony from Fresh Energy, the Minnesota Pollution Control Agency, and the Minnesota Department of Commerce. A judge assigned to the case will determine whether the federal social cost of carbon is the best available measure of the external costs of carbon dioxide emissions or, if not, what measure is better supported by the evidence. The judge’s report back to the PUC will include recommendations on a process for hiring a consulting firm and taking testimony from the public, nonprofit organizations, and utilities.

Fresh Energy applauds the PUC ruling. “Minnesota is poised to make important, long-range decisions about major investments in its energy future—decisions that will impact generations of Minnesotans,” said J. Drake Hamilton. “It is imperative that Minnesota use sound, up-to-date information about the real human health and environmental costs and consequences of electricity decisions. For carbon costs, Minnesota should use the federal social cost of carbon, which was developed by 12 federal agencies using multiple, peer-reviewed models.”

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