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Conservatives gear up to battle EPA carbon rules

Conservative lawmakers are ready to fight tooth-and-nail about the terms of new energy rules forced upon the state by President Barack Obama and the Environmental Protection Agency (EPA). That is, they’ll fight those new rules, once they or anyone else knows what they actually are.

That was the major revelation at Thursday afternoon’s Legislative Energy Commission hearing, as representatives of the Minnesota Pollution Control Agency (MPCA) gave an initial outline to a joint session of legislators on how Minnesota might approach a mandatory cut in its carbon emissions. Options abound, but the general thrust of the EPA’s new rule calls for the state to slash carbon output by 32 percent by 2030.

There is still some disagreement over whether Minnesota would get credit for past progress toward that target; the state has already reduced emissions by 13 percent since 2005, and the MPCA is hoping those steps would count toward its new goal.

Rep. Pat Garofalo, R-Farmington, the House Republican leader on the commission, was adamant about his belief that Minnesota is getting short shrift from the federal government, and he expressed doubt that the EPA’s requirements would give credit where credit is due.

“Everybody in the state was in agreement on this,” Garofalo said, recalling the open comment period on the EPA rules. “And the message from the state seems to be that it’s not really that big of a deal.”

States have until 2016 to present a plan to federal authorities, though they can file for an extension to 2018, and nearly everyone, including state figures and electric utility companies, seemed to favor the slower approach. The EPA rule also calls for states to set up a “cap-and-trade” system of credits for electric utilities. That plan would allow utilities in one state to close power plants and cut emissions, and then trade those credits to another utility, perhaps in another state, which is unable to meet the same standard.

Rep. Chris Swedzinski

Rep. Chris Swedzinski

Rep. Chris Swedzinski, R-Ghent, asked whether Minnesota would set up that exchange system without legislative approval, and asked “how much pushback” would be needed to block participation in that system. Officials with the MPCA testified that, while some states would need legislation to establish a cap-and-trade exchange, Minnesota is not one of them.

Swedzinksi’s was one of several points where Republicans challenged the underlying premise to the new EPA rule, which some, including Garofalo, have said would leave rate-payers with considerably higher bills in future years. Rep. John Petersburg, R-Waseca, asked if the state could simply pass a law stating that it would not comply with the federal rule, saying Minnesota had already “acquiesced a lot of our duty as an autonomous state to the federal government.”

MPCA assistant commissioner David Thornton replied that fighting the federal ruling was a futile thought, and said refusing to enact a state-level plan would put Minnesota at the whim of the EPA itself.

“If we didn’t do anything, they would do it, and we wouldn’t have a choice,” Thornton said.

The EPA estimates that, in total, American states would save more than $30 billion in health care costs, plus another $20 billion in “social costs” related to climate change. That broad term that includes reductions in extreme weather events and lower sea levels, among other effects. Rep. Paul Anderson, R-Starbuck, said he was skeptical about how that figure was calculated, saying the EPA was bold in making the “assumption one country will change world climate by that much.”

Anderson also wondered aloud if it was necessary for the state to proceed with its own planning, and potential sacrifices, when the nationwide process was “going to be slowed down” by expected lawsuits from other states.

When it came time to hear from power company executives, Garofalo used a repeated line of questioning to establish that each of the private companies wants the eventual cap-and-trade exchange to be left in the hands of the utilities themselves.

“Our feeling is, utilities need to own the credits,” said Rick Evans, regional director of government affairs for Xcel Energy. “Utilities, trading, can find the most efficient way to find carbon reductions, and pick and choose between closing plants or purchasing credits from others.”

Recalling the unexpectedly large state infrastructure needed for the MNsure health insurance exchange, Sen. Dave Senjem, R-Rochester, asked if the MPCA had adequate staffing to facilitate a cap-and-trade exchange. In response, agency officials said it was likely too early to tell if the MPCA would need to add any staff to handle the new element, but said the EPA has hinted that it would provide trading desks and software, and would not force states to establish and run their own systems.

In its only substantive move Thursday, the commission also undertook some record-keeping to mark the passing of David Dill, the well-respected DFL House member who died suddenly earlier this summer. Dill’s place on the commission will be taken by Rep. Jeane Poppe, DFL-Austin, who, like Dill, would be expected to bring a moderate, rural-minded profile to the Democratic side of the energy panel.

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