Minnesota Electric Transmission Planning

Minn. Stat. § 216B.2425, subd. 7, states that in the Biennial Report the utilities shall address necessary transmission upgrades to support development of renewable energy resources required to meet the objectives set forth under Minn. Stat. § 216B.1691 (formerly the Renewable Energy Standards). In its May 30, 2008, Order approving the 2007 Biennial Report and Renewable Energy Standards Report, the Commission said, “Future biennial transmission projects reports shall incorporate and address transmission issues related to meeting the standards and milestones of the new renewable energy standards enacted at Minn. Laws 2007, ch. 3.” By 2020, the utilities had largely met the then current Renewable Energy Standards and many had additionally announced voluntary renewable or clean energy standards that exceeded the statutory objectives. As a result, in its 2020 Order approving the 2019 Report, the Commission said the 2021 Report should include content similar to the 2019 Report, along with new information regarding additional clean-energy goals and related transmission needs. The 2021 Biennial Report included this information in Chapter 9 of that report.

In 2023, the Minnesota Legislature amended the objectives set forth in Minn. Stat. § 216B.1691 to include additional milestones for renewable energy as well as creating new carbon-free energy standards (CFES) (see Minn. Laws 2023, ch. 7). The statutory objectives now include:

*See Minn. Stat. § 216B.1691, subd. 2f for additional detail relevant to the solar energy standards. For example, the 10% solar energy target by 2030 is established as a goal, rather than a requirement, and the legislation includes several other targets for smaller-scale solar energy.

In this Report, similar to prior reports, the utilities are reporting on their best estimates for the amounts of renewable generation required in future years and the efforts under way to ensure adequate transmission will be available to transmit that energy to the necessary market areas. A Gap Analysis is provided to illustrate the amount of renewable generation already available and the amounts required in the future to meet the standard. The narrative in this chapter is similar in many respects to the narrative and explanations provided in the 2021 Report, but all figures and charts and tables have been updated to reflect the 2023 legislation. As discussed more fully below, a gap analysis has not been provided for the carbon-free energy standards, as the Commission is continuing to evaluate and provide guidance on how this new standard will be implemented.

It should be pointed out, as was done in previous reports, the utilities required to submit the Biennial Transmission Projects Report are not identical to those required to meet the Renewable Energy Standards. The information in this chapter reflects the work of all the utilities required to meet RES milestones, regardless of whether they own transmission lines and are required to participate in the Biennial Report. A list of those utilities participating in the Biennial Transmission Projects Report can be found in Chapter 2.0. The utilities participating in this part of the 2023 Biennial Report on renewable energy are the following.

Minnesota utilities continue to increase the size and expand the diversity of their renewable portfolios. The table provided in the introduction details the RES and SES obligations Minnesota utilities are working to achieve. Overall, Minnesota utilities have a 2022 collective obligation of 24.5% RES and 1.5% SES, as a percent of retail sales. The most recent reporting is summarized by the Minnesota Department of Commerce in Docket Nos. E999/PR-22-12, E999/M-22-85, E999/PR-02-1240, filed 2/1/2023. All utilities have satisfied their respective compliance requirements and expect to continue to achieve and maintain all compliance requirements into the future. All utilities continue to plan for the addition of increased renewable generation. The utilities have provided a Gap Analysis regarding compliance with the upcoming 2025 Solar Energy Standard in Section 8.6 as well.

A Gap Analysis is an estimate of how many more megawatts of renewable generating capacity a utility expects it will require beyond that which is presently available to obtain the required amount of renewable energy. A Gap Analysis is not an exercise intended to verify the validity of forecasted energy sales and associated capacity needs. It is done for transmission planning purposes only. This is the ninth time the utilities have prepared a Gap Analysis; a Gap Analysis was also prepared for the 2007, 2009, 2011, 2013, 2015, 2017, 2019 and 2021 Biennial Reports.

The chart below presents a system-wide overview of existing capacity in 2025 (used as a base figure throughout the various milestone periods) and forecasted renewable capacity requirements to meet Minnesota RES as well as non-Minnesota renewable energy standards or renewable energy objectives (“RES/REO”). Each utility provided its own forecast of Minnesota RES and non-Minnesota RES/REO renewable energy obligations and converted such estimates into capacity based on their own mix of renewable resources (e.g., wind, biomass, hydropower, solar) using the most appropriate capacity factors unique to their specific generating resources. It is important to note that the data presented in this Report represents MTO members’ efforts to report on metrics that are part of a regulatory construct that is evolving as a result of the 2023 legislation. The Commission is currently in the process of issuing guidance to electric utilities on implementation of the RES and SES requirements in Docket No. E999-CI-23-151. The Commission reviewed this matter during its October 19, 2023, agenda meeting, focusing on initial guidance. The Commission’s written order is forthcoming. Accordingly, MTO utilities remain in the planning stages related to compliance with the Minnesota Legislature’s 2023 amendments.21 To the extent that there are relevant updates informing implementation of these standards, MTO utilities are committed to coordinating with stakeholders if additional information is requested.

The following Table 1 shows a more specific breakdown of each utility’s Minnesota RES and non-Minnesota RES/REO needed capacity forecast.

Note:
1. Capacity factor assumptions established by each utility
2. These quantities include Basin Electric Power Cooperative, L&O Power Cooperative, and East River Electric Power Cooperative.

The following chart represents the total renewable capacity system-wide that will be acquired and lost between 2025 and 2035, as well as the total Minnesota RES and non-Minnesota RES/REO needs between 2025 and 2035. Capacity losses are attributable to the expiration of various power purchase agreements for renewable energy generation, and these losses are implicitly incorporated into the datasets provided.

As can be seen, the Minnesota RES utilities have sufficient capacity acquired to meet the Minnesota RES needs through 2035. When considering the RES needs, including other jurisdictions outside of Minnesota, the Minnesota RES utilities have enough capacity to meet RES/REO needs beyond 2025. In addition, some utilities with less than sufficient capacity to meet the Minnesota RES need may use renewable energy credits to fulfill their requirement.

Focusing back on just Minnesota RES needs, Table 2 below provides a more specific breakdown of each utility’s forecast.

Note:
1. Capacity factor assumptions established by each utility
2. These quantities include Basin Electric Power Cooperative, L&O Power Cooperative, and East River Electric Power Cooperative.
3. RES Capacity Acquired includes banked inventory from previous years (banking allows for year of generation plus four years).
4. Some Utilities with less than sufficient capacity to meet the MN RES need may use renewable energy credits to fulfill their requirement.

Note that the “Needed MW MN RES” bar in the bar chart in this section represents the total level of RES megawatts required (or need) in Minnesota. Conversely, the column in Table 2 labeled “MN RES Net” represents the additional RES capacity presently identified to meet RES megawatts required. To the extent there is a shortfall, or “gap,” between MN RES megawatts required and the additional RES capacity identified points to the likelihood that some utilities will seek additional renewable capacity. Alternatively, some utilities may use renewable energy credits to fulfill their RES requirements.

In 2013, the Minnesota Legislature established a separate solar standard for public utilities, effective by the end of 2020.22 That statute requires public utilities subject to the SES to report to the Commission on July 1, 2014, and each July thereafter, on progress towards achieving the 1.5 percent solar energy standard.

Table 3 shows a more specific breakdown of each utility’s Minnesota SES and non-Minnesota SES megawatts required capacity forecast.

Note: SES is the MN Solar Energy Standard which will require additional solar beyond the MN RES.

Additionally, Table 4 below provides SES Utilities’ planned level of solar capacity additions.

Note: SES is the MN Solar Energy Standard which will require additional solar beyond the MN RES.

As demonstrated by the data provided in this section, MTO utilities continue to make tangible progress to satisfy RES and SES requirements. Though generally encouraged by this progress, MTO utilities emphasize that continuing progress is also closely linked to the ability to procure the necessary transmission resources, which is analyzed throughout this Report. Further, MTO utilities continue to analyze how compliance with the CFES may impact transmission needs and anticipate providing additional information in the next biennial report in 2025.

21 Because MTO utilities are waiting for additional guidance for how to implement the carbon-free standard, this metric is not captured in this Report. MTO utilities will provide this information in the next Biennial report and will work with stakeholders if additional information in required in this proceeding.

22 Minn. Laws 2013, Ch. 85, § 3, codified at Minn. Stat. § 216B.1691, subd. 2f (Solar Energy Standard or SES).

8.0 Renewable Energy Standards

8.1 Introduction

8.2 Reporting Utilities

8.3 Compliance Summary

8.4 Gap Analysis

8.5 Base Capacity and RES/REO Forecast

8.5.1 RES Capacity Acquired and Net RES/REO Need

8.6 Solar Energy Standard

8.7 Gap Analysis Summary