Rep. David Bly’s innovative feed-in tariff legislation (HF 3537) got its first hearing Monday afternoon in the House Committee on Energy Finance and Policy, and generated significant interest. 
I was one of four Northfield-area residents who made the trip to the State Office Building (next to the Capitol building) to take part in the proceedings. Pictured at right are Northfield-area residents Tom Brawley, Randy Perkins and Lee Dilley with Rep. Bly. John Farrell of the Institute for Local Self-Reliance is in the left rear in the light blue shirt and tie. Lee and I both testified in support of the legislation.
Farrell, the son of St. Olaf faculty member Jim Farrell, helped draft the legislation and wrote an influential policy brief, “Minnesota Feed-In Tariff Could Lower Cost, Boost Renewables and Expand Local Ownership” in January of this year that led to the drafting of the legislation. The feed-in tariff, which offers a guaranteed price based on the technology used for all producers of renewable electricity, is widely acknowledged as having been the world’s most effective policy tool for jump-starting rapid renewable energy development, most notably in Germany, where the feed-in tariff approach has been in effect since 1990. Germany generated 11.9% of its electricity from renewable energy facilities in 2006, compared to 9.5% in the US. Taking conventional hydropower development out of the mix, the German advantage is more dramatic: 8.4% from wind, photovoltaics, and other non-hydro, compared to 2.4% in the US. The success of the feed-in tariff in spurring renewable energy development has led Germany to raise its targets for electricity provided by renewables to 27% by 2020 and 45% by 2030.
This major commitment to renewable energy development in Germany has created a renewable energy sector that employs over 240,000 people, and Germany is home to the most robust wind energy manufacturing sector in the world.
Northfielder Mike Bull, Deputy Director of the Minnesota Office of Energy Security
testified in opposition to the legislation, representing the Pawlenty administration’s apparent position that the feed-in tariff would lead to over-paying for new electrical generation capacity. It should be noted that the bill as introduced includes a requirement to review the pricing structure every two years, which would presumably lead to lowered prices over time as the various technologies become more mature and cost-effective. The German experience has been that the massive addition of wind, solar and biomass technologies flowing from their feed-in tariff has increased the average German household’s electricity bill by only about $3 monthly.
The feed-in tariff has also been used effectively in Denmark and Spain, which also now have high rates of renewable electricity generation and strong wind energy manufacturing industries. Rep. Bly’s legislation is based on a bill which was introduced in Michigan in the fall of 2007. Similar bills have been introduced in Rhode Island and Illinois in just the last couple of weeks.
HF 3537 has five co-sponsors, including Bill Hilty (DFL), Kate Knuth (DFL), Jeremy Kalin (DFL), Aaron Peterson (DFL), and Frank Hornstein (DFL). Hilty is chair of the Energy Finance and Policy Division Committee. Peterson is the Assistant Majority Leader in Minnesota’s House of Representatives. DFLers on the committee seemed strongly supportive of the legislation in questioning of Bly and witnesses. Several Republican representatives were critical of the bill, most notably Rep. Mike Beard of Shakopee, who vehemently opposed the bill and has opposed a number of other pieces of clean energy legislation in past sessions. Testimony on the bill will continue in the committee on Wednesday afternoon.