Economic Footprint of Renewable Energy Development in Minnesota

The McKnight Foundation (an environmental advocacy foundation based in Minnesota) retained Anderson Economic Group to conduct an economic and fiscal footprint analysis of Xcel Energy’s draft Integrated Resource Plan (IRP), as well as an alternative energy development plan proposed by a coalition of clean energy organizations (CEOs). Xcel Energy is the largest electric utility provider in Minnesota. Xcel is required to conduct periodic long-range planning exercises, known as “Integrated Resource Plans,” to determine what mixture of generation resources will provide electricity to Minnesotans in the future. Upon completion, the IRP must be approved by the Minnesota Public Utilities Commission.

We reviewed Xcel’s IRP and the CEO alternative plan. To determine the economic footprint of the renewable energy portfolio of both plans, we conducted research into renewable energy construction and operations spending in Minnesota. We then constructed a custom input-output model to calculate the total impact of each plan on output (total sales for Minnesota businesses), earnings, and employment in Minnesota. To determine the fiscal footprint of each proposal, we constructed a model to estimate the total sales, income, property, and energy production tax revenues that would be generated by renewable energy construction and operations.

We determined that the economic footprint of Xcel’s IRP, between 2024 and 2034, would be $2.0 billion in output and $1.3 billion in earnings for Minnesota households. The IRP would support an average of 2,769 jobs per year. The economic footprint of the CEO alternative proposal between 2024 and 2034 would total $3.0 billion in output and $1.9 billion in earnings for Minnesota households. The CEO alternative would also support an average of 4,234 jobs per year. We also determined that the fiscal footprint of Xcel’s proposed IRP would be $161 million, while the fiscal footprint of the CEOs’ alternative proposal would be $243 million.

We presented our findings to the CEOs in a report in June 2021. The CEOs filed our report, and comments on Xcel’s plan, with the Minnesota Public Utilities Commission. The report will be used to inform the Public Utilities Commission of the economic and fiscal impacts of the development of renewable energy in Minnesota.

Read the full report here.