When they passed Minnesota’s 100% carbon-free electricity mandate in 2023, the New DFL promised our state cheaper power. Xcel Energy’s ratepayers are now finding out otherwise.
Xcel, the state’s largest utility, has asked regulators for $490.7 million in rate increases over 2025 and 2026, a 13.2 percent jump, and named investments in cleaner electricity generation as a driver. Regulators trimmed the interim increase to 5.2 percent, but the direction is set. Minnesota families will now pay more for electricity, and we were lied to about the true cost.
As passed, the mandate requires 80 percent carbon-free power by 2030, 90 percent by 2035, and 100 percent by 2040. The Public Utilities Commission (PUC) can modify those targets if they threaten reliability or affordability. Yet, knowing that they are likely to threaten both, a responsible Legislature would reverse the mandate before it causes upheaval for Minnesotans.
Start with how the New DFL sold the public on the idea of transitioning to wind and solar. They used the “levelized cost of energy” (LCOE), which shows wind and solar as the cheapest sources on the grid. However, they are far more expensive when all the costs of constructing a wind-and-solar grid are accounted for.
The U.S. Energy Information Administration warns that using LCOE as a measure of true cost is misleading because LCOE measures the cost to run a generator. It does not factor in what that generator is worth to a grid that must deliver power on demand, every hour, in every season, with transmission and battery backup.
A wind turbine selling electricity at $30 per megawatt-hour is worthless to a family freezing through a windless January night.
That is the gap Minnesota energy analysts Isaac Orr and Mitch Rolling set out to close. Their “Always On Levelized Cost of Energy” model assigns wind and solar the full costs of backup generation, transmission, overbuilding, and curtailment required to keep them reliable.
Applied to Minnesota, that model put the all-in cost at roughly $272 per megawatt-hour for wind and $472 for solar. Those are modeled figures built on a specific set of assumptions, not observed market prices, but they answer a question the state government conveniently failed to ask: what does intermittent electricity actually cost once you stop hiding the energy backup bill somewhere else on the ledger?
The contrast between wind and solar versus traditional energy sources is stark. The Energy Information Administration puts the cost of a new natural gas combined-cycle plant, a resource that needs no separate backup fleet to come online when called upon, at $46 to $49 per megawatt-hour for units entering service in 2030. These plants also tend to have lower transmission costs because they can be built near demand. Existing coal plants, already paid off, run cheaper still. Counted honestly, wind’s all-in costs run five to six times that gas benchmark, and solar’s run nine to ten.
The grid operator is sending the same signal from a different direction. Midcontinent Independent System Operator (MISO) is an independent, non-profit organization that manages the flow of high-voltage electricity across the central United States and parts of Canada. MISO’s own wind and solar capacity credit studies show that these resources deliver only a fraction of their nameplate capacity under the most stress, which is exactly when Minnesotans need the power most. The market has priced that risk in. MISO’s most recent summer capacity auction cleared at $666.50 per megawatt-day, roughly 20 times the prior year’s price, as dependable capacity gets scarcer.
The North American Electric Reliability Corporation’s (NERC) newest long-term assessment flags MISO’s risk of running short on power later this decade as thermal plants retire faster than firm replacements come online (wind and solar are not firm power). NERC is predicting electricity shortages, which means rolling blackouts akin to what we see in California. In California, power shortages are a nuisance. In Minnesota, a rolling blackout at 20 below in January could be life-threatening.
Before another dependable power plant retires, utilities should have to show, not simply assert, that what replaces it can deliver electricity during the highest demand of the worst winter week. Every resource plan filed with the PUC should include a transparent, always-on accounting of generation, subsidies, transmission, storage, backup, and curtailment, all in a single number that regulators and ratepayers can actually see.
From their ridiculous $730 million expenditure on the new State Office Building, to their desire to “quintuple” our car tab fees, to their costly green energy mandates, Minnesotans are tired of the complete disregard with which the New DFL is willing to spend our hard-earned money. If given full leeway, how long until there is nothing left for them to spend?
Tom Murphy is a Republican state representative who represents District 9B in the Minnesota House.
The views and opinions expressed in this commentary are those of the author and do not represent an official position of Alpha News.
Tom Murphy
Tom Murphy is a Republican state representative who represents District 9B in the Minnesota House.
