Minnesota Will Require 100% Carbon-Free Electricity by 2040

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Democratic lawmakers in Minnesota passed an ambitious climate law last week requiring the state’s power utilities to use 100 percent clean electricity by 2040. The clean electricity legislation was approved on a party-line vote by the state’s Senate. House Democrats passed an identical version of the bill the previous week, which means it now goes to the state’s Democratic governor, Tim Walz, who intends to sign it.

“Minnesota has a proud tradition of being a national clean energy leader, but we’ve fallen behind other states,” Democratic House Majority Leader Jamie Long, who authored the bill, told Grist in a statement. “Minnesotans are calling on us to act and we are answering the call.”

The legislation establishes two new mandates for electric utilities in the state: a renewable electricity standard and a carbon-free energy standard. The former builds on a law the North Star State passed in 2007, which required power utilities to get at least 25 percent of their energy supply from renewable sources by 2025. They achieved that goal eight years early. The new standard ups the requirement to 55 percent renewable energy by 2035. The second standard instructs electric utilities that operate in the state to get 100 percent of their power from carbon-free sources by 2040, with targets set along the way — 80 percent carbon-free by 2030 and 90 percent by 2035. Utilities can use a mix of solar, wind, hydropower, nuclear, hydrogen power, and biomass — energy obtained from burning wood and trash — to meet the 2040 goal.

Minnesota’s two top power utility companies, Xcel Energy and Minnesota Power, previously promised to reach 100 percent carbon-free energy by 2050. This bill speeds up their timeline by a decade, but it also includes “off-ramps” that utilities can take advantage of if the targets prove too onerous. If Xcel, for example, can make a case before state regulators that the benchmarks set by the legislation prevents it from supplying its customers with reliable power, the state may grant it an extension. Utilities can also buy clean energy tax credits to offset their emissions.

The bill contains provisions that will help streamline the permitting process for new energy projects in the state, set minimum wage requirements for workers hired by the state’s utilities to build large-scale projects, and prevent power from waste incineration plants located in low-income, majority non-white communities from counting toward the 2040 target.

Environmental justice groups in Minnesota fought hard to get that last provision included in the bill — they argued that waste-to-energy facilities, like the Hennepin Energy Recovery Center in Minneapolis, endanger the health of communities that live around them. The groups said the legislation is a good first step but argued that it doesn’t do enough to disincentivize other garbage incineration plants currently operating across the state.

State Republicans opposed the clean energy standard on the grounds that it would make electricity in the state more expensive and less reliable. “This ‘blackout bill’ is going to make energy unreliable, unsafe, and even dangerous,” the Republican House minority leader, Lisa Demuth, said. “Energy needs to be safe. We need it in Minnesota to be reliable, and this is neither.” Multiple analyses of existing state-level clean energy standards show the mandates have actually improved grid reliability and reduced costs for consumers.

Minnesota House Democrats attempted to pass similar legislation before, in 2021, and were shot down by the Republican-controlled state Senate. In 2022, the party narrowly clinched a majority in the chamber, which illuminated a new path forward for climate legislation. Minnesota is the first state to pass a clean energy standard since Democrats in Washington, D.C., passed the Inflation Reduction Act, the biggest federal investment in fighting climate change in U.S. history, last August.

“This is the culmination of a lot of hard work,” Paul Austin, head of Conservation Minnesota, told Grist. “It shows how the federal legislation and the state legislation can work together, and it shows that the states can continue to lead if Congress doesn’t have that window to do major things on climate going forward.”