Arrowhead Electric CEO explains how and when Minnesota carbon-free law will impact local power bills
WTIP file photo

Arrowhead Electric CEO explains how and when Minnesota carbon-free law will impact local power bills

Earlier this month, Gov. Tim Walz signed a bill requiring electric utilities across Minnesota to offer customers 100 percent carbon-free electricity by 2040.

Though it could be more than 15 years before members of Arrowhead Electric Cooperative in Cook County see an increase in their electric bills, the new law will likely have some impact on local power bills in the future, according to John Twiest, the CEO and general manager of Arrowhead.

“The reality of the situation is that we won’t see anything immediate,” Twiest said. “But by 2040, we’re anticipating some increase in those bills just based on what is going to be required as a result of the bill and the 100 percent carbon free standard that’s been signed into law.”

The bill was a top priority for Democrats who control the Capitol, and within weeks of the 2023 legislative session it moved out of both chambers of Minnesota’s legislature on a party-line vote.

Prior to its passing, GOP critics in Minnesota dubbed the carbon-free plan a “blackout bill,” saying that it will undermine the reliability of the state’s power grid — especially on the coldest winter nights and hottest summer days — in addition to forcing consumers to pay higher energy costs, the Associated Press reports.

Under the bill, utilities would need to increase the amount of their retail electric sales generated from renewable energy sources — wind or solar — to 55 percent by 2035.

They would also be required to have 80 percent of their electricity from carbon-free sources by 2030, increasing to 100 percent by 2040.

Great River Energy, the parent company of Arrowhead Electric Cooperative in Lutsen, is in a good position to make the transition to 80 percent by 2030, Twiest said. The next 20 percent, he said, could be more challenging. It will also be more expensive.

“Getting to 80 percent is pretty doable,” Twiest said in a recent WTIP interview. “That last 20 percent is going to be costly, just because we’re going have to figure out what we’re going to be able to use for baseload power. There are not batteries right now that will be able to really get us through those shoulder times. And thinking about what our weather in Minnesota does and how we can have some significantly long days and even into a week where there just isn’t a whole lot going on, whether it’s no sun or very little wind, or a combination of both.”

Meanwhile, Republican North Dakota Gov. Doug Burgum and other top officials in his state threatened last month to sue Minnesota if the bill is enacted, saying it would prevent North Dakota utilities from continuing to export power generated from coal and gas to Minnesota. As of mid-February, Great River Energy continues to buy from electricity from a coal-fueled power plant in North Dakota. As WTIP previously reported, in July 2021, the Arrowhead Board of Directors endorsed a deal that includes purchasing electricity from Rainbow Energy at a power plant formerly known as Coal Creek. The North Dakota power plant was back in the news this month when the Environmental Protection Agency denied a request by Rainbow Energy to continue dumping toxic ash into an inadequately lined pit near the power plant.

Rainbow Energy purchased the Coal Creek Station from Great River Energy with the intent of using carbon-capture technology to keep the plant viable. Twiest told WTIP the contract with Rainbow Energy runs through 2030 and at that time Arrowhead and Great River Energy officials will need to survey the landscape to see what type of carbon-free power is available.

“We don’t want to purchase something that isn’t going to fit within those (carbon-free) standards,” Twiest said. “So it’s important that we strategize now in order to get to where we need to go.”

To hear to the full interview with Twiest and WTIP’s Joe Friedrichs, listen to the audio below.

The Associated Press contributed to this report.