Minnesota is facing a serious electricity shortage in the next few years, as a healthy economy and stronger-than-expected demand for power has evaporated the surplus energy that the region enjoyed a few years ago.
Energy forecasters estimate that the Upper Midwest will need 5,000 more megawatts of electricity -- more than half of it in Minnesota -- by 2006. That's the equivalent of five new nuclear plants the size of Prairie Island in Red Wing, or larger numbers of plants fired by coal or natural gas.
"That forecast really got our attention," said Linda Taylor, deputy commissioner for energy at the Minnesota Department of Commerce. "You want to be sure that when you turn that switch the light turns on, but even more important in Minnesota, you want to be sure that your furnace stays on."
The shortage cannot be fixed quickly. New power plants typically take five years for planning, hearings and license approvals -- and that's before actual construction begins.
The last time a major new electric-power plant was built in Minnesota was in the mid-1980s. The last major power line was constructed in the state even earlier -- in the late 1970s.
The need for new power plants is only half of the problem. New sources of electricity will do nothing to meet demands unless it can be transported to urban centers via high-voltage transmission lines; existing power lines already are nearly overloaded, making them more vulnerable to service interruptions.
Electricity use has increased not only because of business growth in a strong economy, said David Sparby, vice president for regulatory and government affairs at Xcel Energy in Minneapolis, but also because of technology -- additional computers, scanners, printers, Internet service providers and data centers.
"The growth in demand with all of this miscellaneous segment of electronics has resulted in much more electric use than anyone thought even a few years ago," Sparby said.
A recent analysis by the Minnesota Department of Commerce found that electricity use per residential customer in the state increased by nearly 20 percent between 1990 and 1998.
The looming shortage does not mean the lights will go out in five years. It will, however, erode the backup "reserve" system that swings into action during periods of unusually high demand.
Industry forecasters expect the reserves to decrease to 14 percent in 2002 and then to decline steadily to 6 percent by 2009.
To encourage the building of new power plants and power lines, the Commerce Department will propose to the 2001 Legislature several changes.
The proposal identifies energy needs and determines when and where upgrades are needed; promotes new energy technologies like wind turbines and fuel cells; increases conservation efforts; and explores ways to encourage competition among energy wholesalers.
Some of the changes could include reducing or abolishing utility property taxes and speeding up the regulatory approval process in Minnesota.
The Commerce Department recommendations are likely to be a starting point for discussions at the Capitol.
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