The Future of Minnesota’s Electric Utilities: The Sequel

November 24, 2013 | Blog

Authors: Mike Bull, Rolf Nordstrom

Environmental Initiative’s recent policy forum on “The future of Minnesota’s Electric Utilities” drew a block-buster crowd—you would have thought they were giving away free beer. Especially for a topic as potentially dry and esoteric as the future of electric utilities, one would have expected a much smaller crowd and the deafening sound of crickets. But the meeting room overlooking the iconic Como Zoo was packed and humming with conversation.

Timing is everything, and the electricity industry in this country (and elsewhere in the world) is undergoing seismic changes that deserve the kind of attention they got at EI’s recent forum. Indeed, for anyone working in (or just interested in) the energy sector, it’s impossible to escape talking about what the utility of the future might look like and how it might evolve. It is the right conversation to be having.

One wouldn’t think that a regulated monopoly would need to worry about competitive pressures, but as the speakers at EI’s policy forum outlined in fair detail, there are a number of drivers that are forcing utilities to rethink what business they are fundamentally in, and calling into question the existing regulatory compact. We won’t take the time to recount them here, but these drivers are nicely captured in Edison Electric Institute’s “Disruptive Challenges” report.

In his follow-up piece to the EI Forum, appearing in MinnPost, Ron Meador wrote that he was hoping to come away from the event with a “roadmap or two or three” for how utilities and the regulatory framework might change. But in fairness, the forum wasn’t really designed to provide answers so much as to illuminate some of the right questions.

Happily, the Great Plains Institute, the Center for Energy and the Environment and George Washington University Law School in D.C. have an ambitious collaboration poised to get underway that will engage Xcel Energy (and possibly other MN utilities), along with other key stakeholders, to explore how we might change the regulatory framework and the utility business model to make it profitable to achieve a sustainable, reliable and affordable energy system.

Dubbed “e21” for a 21st Century Electricity System, we are optimistic that this collaboration can help utilities and society end up “pulling on the same end of the rope”: Consumers getting the choice, cost and reliability they want, and utilities getting to remain profitable and essential players in ensuring the very life blood of modern life—clean, affordable, reliable energy.

We have been successful over the past decade passing clean energy laws and regulations that adjust for the utility business model; now we have an opportunity to explore more fundamental changes to the business model.

Rolf Nordstrom is President and CEO of the Minneapolis-based Great Plains Institute, a non-partisan, non-profit that uses consensus-based strategies to transform the way we produce, distribute and use energy to be economically and environmentally sustainable over generations.

Mike Bull is Director of Policy and Communications for the Center for Energy and the Environment, a nonprofit, also based in Minneapolis, entering its 35th year of advancing the public interest through clean energy research, program implementation, project financing and policy innovation.