On Friday, May 18, legislation co-authored by Senator Justin Eichorn (R-Grand Rapids) to provide financial assistance to the many businesses impacted by the closure of the Benson Power biomass facility passed off the Senate floor in a 38-27 vote. The bill, SF 3290, would create a $40 million fund to preserve jobs and compensate eligible businesses impacted by the closure of the plant.
“Most everyone in St. Paul recognizes that the legislation that allowed the closure to happen the last session had significant positive results for Minnesota’s energy ratepayers, but not as many recognize that it carried a negative impact by destroying some jobs in the region,” said Senator Justin Eichorn. “This legislation helps us correct some of the pain that they’re feeling by providing them a measure of financial flexibility to adjust and change course and ultimately keep employees on staff.”
Last year, the legislature authorized Xcel to cancel their PPAs with the biomass facilities in an effort that provided significant savings for utility ratepayers across Minnesota. Energy generation costs for the Benson Plant had cost nearly four times the price of all other plants in the Xcel system.
Unfortunately, as a result of that decision several businesses that serviced the plant or provided fuel and services to the plant; such as turkey growers, wood suppliers, and trucking companies now face devastating financial losses as a result of the termination of their contracts with the plant. With their business models currently in flux, many of the companies are struggling to devise a path to survival.
SF 3290 will inject some desperately needed financial flexibility to allow the companies to submit claims and receive compensation for the business they lost. An administrative judge would then hear those claims and determine a reasonable level of compensation for those firms. In turn, those funds would then go towards preserving regional jobs, while giving companies time to adjust their business model to transition towards a future without the plant.
The legislation now heads to House for a vote before it will reach the Governor for his signature.