Check's in the Mail

Under the 1994 Prairie Island law, NSP must pay millions into a clean-energy fund. Fine, says the power company--but define "pay."

Anyone who stumbled into the first-floor hearing room at the state Capitol last Wednesday might have been forgiven for thinking they had walked into the role-playing portion of a conflict-resolution seminar for lobbyists. After all, it's not every day that representatives of groups locked for years in a bitter fight over nuclear waste and millions of dollars sit down side by side to announce that they have worked things out.

But that was the scene as representatives of Northern States Power and two coalitions representing environmental and rural-development interests told a Senate committee that they were close to cementing a deal on money NSP must pay to a state-mandated "renewable energy account." Critics of the proposed compromise say it falls far short of what was intended by the law that mandated the payments. But after five years of fighting for any money at all, the environmentalists say the compromise is better than nothing.

In 1994, when the Legislature gave NSP the right to store nuclear waste in outdoor casks at its Prairie Island plant, it wrote certain conditions into the law. NSP would have to provide at least 425 megawatts of wind power by June 1, 1999, the measure said. And if the casks remained on Prairie Island past 1998, the company would have to deposit $500,000 per cask, per year into a fund for development of renewable-energy sources.

Sen. Janet Johnson (DFL-North Branch), one of the architects of that provision, says this was to be an incentive for NSP to find other quarters for its waste before January 1, 1999. If the casks stayed and NSP had to pay up, Johnson says, the money was to assist smaller companies in developing clean-energy technologies. Johnson and some environmental advocates have argued that the intent of the law was for NSP to make its payment to a fund administered by the state; earlier this year, mock collection notices appeared in rural newspapers, warning NSP shareholders that "your Jan. 1, 1999 payment to the State Treasury is more than 30 days past due."

But NSP and its legislative supporters have long argued that the bill never required that NSP cut the state any checks. The fund would be an internal one, the utility has maintained, and it could pay for NSP's own renewable-energy programs, including the wind power mandated under the '94 law. "NSP's position is that the law is quite clear," says Carl Lehmann, an NSP lobbyist who helped forge the agreement. "We made a deal in 1994, and we intend to keep it."

On the face of it, the compromise proposed last week concedes the power company's key point: The deal leaves NSP the option of administering the renewable-energy fund itself, albeit through an as-yet-unspecified "publicly accountable process." It also allows the utility to recover the cost through rate increases, as it would, for example, when building a new power plant.

But Diane Jensen, the negotiator for one of the two citizens' groups, the Sustainable Energy and Economic Development (or SEED) Coalition, says the deal represents a victory for advocates nonetheless. For the first time, she says, NSP has committed to spending the $500,000 per cask ($4.5 million this year, and probably $5.5 million in 2000) on new projects. The groups and NSP have also agreed on a "strong preference" for ventures that spark economic development in Minnesota (rather than, say, wind-power plants in other states), and on a time line under which the first checks would go out by the middle of next year.

Jensen says the negotiations were her idea. "We want to get wind and other sources of renewable energy planted now," she explains. "Who writes the check is less important. It doesn't serve anyone to bottle up what will ultimately be an $8.5 million-a-year fund for years and years while we're stalemated."

After hearing from the groups involved in the negotiations, the Jobs, Energy, and Community Development committee approved a bill handing joint authority over the fund to NSP and the two coalitions. Unanswered in the brief debate were a host of questions, most of them posed by Johnson. The North Branch senator warned that according to the bill, legislators were giving control over millions of dollars to "private interests with no state involvement and no legal authority backing up the agreement."

In the hearing Johnson asked that the bill be amended to set up an independent nonprofit organization to administer the funds; her proposal failed, but NSP's representatives said they would consider the possibility. According to Jensen, NSP and the two coalitions are still negotiating about how the fund should be overseen. If they work out an agreement, the bill could move to the Senate floor in a matter of weeks. The committee's legal counsel John Fuller says chances for its passage look good, given that it has the support of groups on both sides of the issue.

Johnson says she remains baffled at the advocates' willingness to compromise. "It's nice that NSP and the environmentalists have been talking," she says. "But NSP does not represent the citizens of Minnesota, and the environmentalists don't, either." If the last five years of wrangling over the fund prove anything, she notes, it's that the devil is in the details: "It's awfully easy to craft language you can get out of later on. If we're not careful, we'll have problems two or three years down the line."

 
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