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<br />MINNESOTA'S 25 Fl� 25 RENEWABLE ENERGY STANDARD
<br />Otter Tail Power Company supports landmark legislation
<br />In Februarythe Minnesota Legislaturepassed a
<br />comprehensive renewable energy standard that will
<br />increase the amount of renewable energy used in the
<br />state. Otter Tail Power Company was involved in
<br />negotiations regarding specific language in this law
<br />and supported the final bill.
<br />Standard requires using renewable resources
<br />The standard requires that 25 percent of all electricity
<br />used in Minnesota be generatedfrom renewable sources
<br />by 2025. A quarter of that will need to be generated
<br />from wind. Electricityfrom biomass, solar, hydrogen, and
<br />hydroelectric sources also qualifies. The original bill
<br />called for 25 percent renewables by 2020, a timeframe
<br />that Otter Tail Power Company and other utilities
<br />believed was too short to build the necessary
<br />transmission infrastructure.
<br />The 25 by 25 standard requiresthat 7 percentof
<br />e[ectrici� sold in Minnesotabe generatedfrom renewable
<br />sa�.�s k�� 2r.�iC. vrlh II� percrnla� increasir� annuaMy
<br />'.hrar.�h 2023. Ii ��pl�n�s hl�nntsola�s r�nevr�fe t�•it�;}•
<br />objective (R�0), which required that 1 0 percent of
<br />electricity sold in the state be derived from renewable
<br />sources by 2015.
<br />Legislation allows flexibility
<br />The legislation gives the Minnesota Public Utilities
<br />Commission flexibilityto adjust the timing and the
<br />amount of required renewables if the standard adversely
<br />impacts reliability or consumers' costs. Commission
<br />action may be triggered 'rf:
<br />Congress does not renew the federal wind energy
<br />produclion tax credit (PTC). The PTC provides a tax
<br />credit of 1.9 cents a kifavratt-hour for the first ten
<br />years of a wind projecfs life.
<br />A shortage of equipment, such as towers or turbines,
<br />significantly increases costs associated with
<br />wind-generated electricity.
<br />Not enough transmission capacity is available to
<br />deliver electricity generated from renewables. Ifs
<br />estimated that at least 1,800 miles of new large
<br />transmission lines wiil need to be erected to allow
<br />utilities to meet the 25 by 25 standard.
<br />Otter Tail Power Corru�any suQOOrted lan�ua�e in the
<br />� v;' � I�g�SI�-�-r. �� �p7a�.� r�rTlr.irf 2r•nzrl�;i ir
<br />�r�rt, . 1raE�� irh �Grr.t I]���r.-a in hr. i��i F��r.
<br />meeting the renewable energy standard.
<br />�
<br />This law also allows utilities to continue to secure
<br />generation resources on a leastcost basis. That means
<br />we can continue to increase the amount of electricity
<br />generated from renewables in our overall generation
<br />portfolio and do i t so ifs economical for our customers.
<br />OtterTait PowerCompanysupports
<br />balanced generation
<br />Otter Tail Power Company President Chuck MacFar3ane
<br />said the utility supported the legislation because "the
<br />standard is good public policy. Ifs in line with our goal of
<br />meeting customers' needs in an environmentally
<br />responsible way, while including customer cost protections."
<br />Otter Tail Power Company has a long history of balancing
<br />its mix of energy resources and continues to do so.
<br />Typically, 9 percent to 'I'I percent of those resources
<br />have come from renewable and alternative fuels. An
<br />alternative fuei-handlingfacility was added to the
<br />existing Big Stone Plant in the mid-1990s to blend
<br />biomass and alternative fuels with coal. The company
<br />alsv owns hydroelectricdams and purchases additional
<br />energyfrom other hydroelectricandwind resources.
<br />Otter Tail Power Company's ongoing dedication to
<br />renewables is reflected in our most recent resource plan
<br />submitted to the Minnesota Public Utilities Gommission
<br />for approval. The plan, which proposes our generation
<br />resources for coming years, calls for:
<br />Up to 160 megawatts of new wind-generated power.
<br />Baseioad generation of 122 megawatts (winter rating)
<br />from Big Stone fl, a new state-of-the-artcoal-�ireci
<br />generating plant proposed for construction near
<br />Milbank, South Dakota.
<br />New demand-sidemanagementand conservation of
<br />approximately67 megawatts ofwinter-peakload and
<br />30 megawatts of summer-peak load.
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