What’s carbon-free? Utility regulators to decide what qualifies under state’s clean energy law

The landmark law that Minnesota lawmakers passed last year requiring utilities to produce 100 percent of their electricity from carbon-free sources by 2040 did not specify which power sources would qualify.

Instead, the legislation defined “carbon-free” as “a technology that generates electricity without emitting carbon dioxide.” Lawmakers left it to the Minnesota Public Utilities Commission to determine what meets that definition.

To environmental advocates like Andrea Lovell, Government Relations Director for the Minnesota Environmental Justice Table, that language is crystal clear.

“To decide if a technology counts as carbon-free, you only need to ask one question of the technology. Does it emit carbon dioxide? If the answer is yes, it is not carbon-free. Period.”

Speaking at a news conference at the state capitol this summer, Lovell said that according to the definition spelled out by the legislature, wind and solar should be considered carbon-free. Whereas power plants that release CO2 into the atmosphere, whether by burning coal and natural gas, or wood and trash, should not.

But a group of utilities and industry groups, along with state agencies including the Minnesota Pollution Control Agency and Department of Commerce, are urging the Public Utilities Commission to take a broader view.

The MPCA, in a filing to the PUC, argues that regulators should assess “‘carbon neutrality’ rather than the more strict requirement of being ‘carbon free’ at the point of electricity generation.”

That would allow for an approach that considers the entire carbon lifecycle of different technologies.

For example, should a coal-fired power plant equipped with carbon capture technology be considered carbon-free, if it emits carbon dioxide that is subsequently trapped underground?

What about controversial trash incinerators that emit carbon dioxide and other air pollutants, but can emit fewer greenhouse gas emissions than landfills?

Wood power

Also at stake is the future of biomass power plants, which burn wood to generate electricity, including Minnesota Power’s Hibbard Renewable Energy Center on the St. Louis River waterfront in western Duluth.

Earlier this week, semis carrying loads of wood chips were lifted up almost vertically on giant ramps, dumping huge loads on to a conveyor belt that whisked them inside the 10-story tall building.

Boilers burn the wood at temperatures reaching 700 degrees Fahrenheit to create steam, which turns two giant turbines to generate electricity.

The wood the power plant burns is left over scraps from loggers and wood manufacturing plants that make pallets and other products across the region.

Minnesota Power argues that if the wood wasn’t burned here, it would decay in landfills and release carbon dioxide into the atmosphere. The utility and others also argue it plays a critical role in northern Minnesota’s forest products industry.

“So over the lifecycle of the forest, we're not adding any additional carbon to the atmosphere by using that wood product to generate electricity,” said Jennifer Cady, vice president of regulatory and legislative affairs for Minnesota Power.

The utility generates only one percent of its electricity from this plant. But plant manager Mark Kayser said it plays a vital role as a so-called “peaker” plant. It can be fired up in 16 hours to provide electricity to the grid in times of peak demand.

“When we think about this transition to a carbon-free future, one of the biggest challenges is figuring out how to fill the gaps when weather-dependent renewables aren't available,” said Cady. “And that's something really unique that biomass can provide.”

Environmental groups dispute the assertion that biomass plants are carbon-neutral. On a per-megawatt hour basis, they emit more carbon dioxide than coal plants.

The carbon footprint of biomass plants can vary drastically depending on a variety of factors, said Kevin Fingerman, a professor of energy and climate at Cal Poly Humboldt.

“So it ranges from about comparable to that of solar photovoltaics to about comparable to the carbon footprint of a natural gas power plant,” said Fingerman. “And it is true that every system is going to be different, and I don't think that it is reasonable with this technology to paint with a broad brush.”

For example, on the Iron Range, a biomass plant operated by Hibbing Public Utilities not only provides electricity to city residents and businesses, but also heat, through a system known as combined heat and power.

“So we're actually heating homes and schools and hospitals with the waste steam from electrical generation,” said general manager Luke Peterson, heat that otherwise might be provided by fossil fuels such as natural gas or propane.

Peterson wants to see more deliberation on how to treat fuels like biomass. “It will be harder if we have a very impractical definition forced upon us,” Peterson said.

Utility regulators won’t decide on a technology-by-technology basis what is considered carbon-free, and what isn’t.

Rather, the five-member commission will clarify the definition of “carbon-free” electricity, and make several other decisions about the law’s implementation.

To the legislators who wrote the carbon-free law, including State Rep. Liz Reyer, DFL-Eagan, their intent was clear.

"Diluting the language opens the door to an array of false climate solutions,” Reyer said. “These have no place in our state and go against the spirit of the law we passed in 2023."

Utilities want guidance from utility regulators so they can make plans to meet the law's requirements.

“Receiving clarity on what resources will meet the Carbon Free Standard in a timely matter is critical,” Minnesota Power wrote in a filing to the PUC.

Meanwhile environmental groups say they will consider litigation if utility regulators stray from a plain-language reading of the legislation.

“We would look at all options to challenge the Public Utilities Commission if in the future they start implementing the law in a way that gives credit under the carbon free standard to burning wood and burning trash,” said Minnesota Center for Environmental Advocacy attorney Evan Mulholland.

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