Minnesota’s cautionary environmental permitting history: CEI report
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Lawmakers in Minnesota, including former Gov. Mark Dayton, have made environmental permitting reforms to make the system efficient and effective. These reforms, noted in a new Competitive Enterprise Institute report, include establishing timeframes for certain permit decisions, keeping track of agency performance through annual permitting efficiency report cards, and creating new categories for permit types with the goal of reducing overall wait times.
But problems persist that inhibit the economic gains from permitting reform. Those problems include extended wait times for non-priority projects, and uneven state resource allocation.
“These inefficiencies became more pronounced as the state pursued aggressive renewable energy goals, such as the 100 percent carbon-free electricity target by 2040,” report author and CEI Senior Fellow James Broughel says. Concerns regarding fairness in the permitting process and potential cost increases for consumers plague the system.
Minnesota’s reforms have incentivized utilities to rapidly expand infrastructure, often beyond what is immediately needed. This overinvestment, driven by profit motives under cost-of-service regulations, has resulted in higher electricity rates for consumers as utilities pass on the costs of unnecessary projects.
“The Minnesota experience serves as a cautionary tale about the delicate nature of permitting reforms that, while well-intentioned, can lead to over-investment while inflating costs.”
The report suggests several solutions to Minnesota’s permitting problems, including:
- Learn from performance reporting: Annual performance reports include a wealth of data that can be used to identify and address bottlenecks;
- Prevent consumer burdens: Ensure permitting reforms protect consumer interests by preventing unchecked capital expenditures that lead to increased energy costs, and;
- Ensure fairness: Avoid preferential treatment for any specific energy source to maintain a competitive marketplace.
Read the report on CEI.org: Feeling Minnesota: A cautionary tale for permitting reformers
Read more in the environmental permitting series: