Minnesota plans ignore stranded costs

30 March 2001

Though Minnesota is home to three nuclear units, only one of the three proposals for power reform in the state deal with the issue of stranded costs.

“We found stranded benefits, not stranded costs,” said Linda Taylor, deputy commissioner for energy at the Minnesota Department of Commerce, one of three groups behind a bill that places emphasis on alternative forms of energy. The other two groups backing bills are the Minnesota Chamber of Commerce and a consortium called Power (People Organised for Workers, the Environment and Ratepayers). The Chamber of Commerce bill is alone in including a section on stranded costs, but has been presented to the committee to get the competition ball rolling. It authorises up to 100% recovery of the value of “prudently incurred net verifiable assets and investments” according to Todd Rapp, managing director of Minnesota government affairs for Xcel, the company that owns Prairie Island 1 and 2 and Monticello nuclear units. The plan aims to give electricity customers a choice of suppliers by January 2003, followed by a three-year price control period.

Linda Taylor said that the Department of Commerce’s bill was aimed at maintaining reliability and getting more power into the system and on the grid, but did not dictate which sources of energy to focus on.

The Power coalition’s proposal differs in its suggestion of a portfolio for renewable energy and emissions standards. Further bills may still be introduced.



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