The Minnesota Public Utilities Commission (PUC) is a uniquely confusing state entity. It’s not a state agency. It’s not a court. It’s a quasi-judicial entity, something of a hybrid which also happens to lack both transparency and accountability.
I watched the PUC’s deliberations on the Enbridge Line 3 tar sands pipeline going back to 2017-18, and I remain confused about why the Commission seemed to bend over backwards for Enbridge and ignore the public interest.
It led me to reread the PUC’s convoluted mission statement and question whether that’s part of the problem:
The Commission’s mission is to create and maintain a regulatory environment that ensures safe, adequate and efficient utility services at fair, reasonable rates consistent with State telecommunications and energy policies. It does so by providing independent, consistent, professional and comprehensive oversight and regulation of utility service providers. One of the key functions of the commission in performing this mission is to balance the private and public interests affected in each docket, and to make decisions that appropriately balance these interests in a manner that is “consistent with the public interest.” (Emphasis added.)PUC website
If you blur your eyes and don’t think too hard, you might think it’s reasonable. Boiling it down into its simplest terms, it makes no sense. The mission statement says the PUC is supposed to balance the private and public interest in a manner consistent with the public interest.
It implies there are two kinds of “public interest.” One is the full-blown public interest. Then the PUC balances the public interest against the corporate interest — compromising the public interest — and still comes up with a decision that’s “consistent with the public interest”?
The PUC didn’t consider the public interest in approving Line 3. The public interest was nowhere to be found.
The PUC’s current quasi judicial structure undermines public trust in the system. As it’s been explained to me by PUC staff, neither the staff nor Commissioners can answer substantive questions about the PUC’s decisions: “the Commission’s decisions are made in writing, and the Commission speaks only through its orders. Staff is not able to provide additional interpretation or explanation for why decisions are made, beyond what is stated in the order.”
Here are some concrete examples from the PUC’s Line 3 decision showing how this dysfunctional system didn’t operate — and isn’t operating — in the public interest as well as important unanswered questions.
The PUC changed the rules so it wouldn’t have to follow the public interest
The PUC is set up like a court. When Enbridge applied for its new pipeline, various other parties applied to be official “intervenors” argue for or against the pipeline.
The Minnesota Department of Commerce’s Division of Energy Regulation and Planning unit is always an intervenor, acting on behalf of the public interest.
One big point of contention was whether Line 3 was even needed. The law put the burden of proof on Enbridge to develop a future oil demand forecast to justify the project.
Commerce — speaking for the public interest — testified before the PUC that Enbridge had failed to make its case.
The PUC arbitrarily changed the rules. It required Commerce to create its own future oil demand forecast to show Line 3 wasn’t needed. Commerce wasn’t prepared to answer the question; it wasn’t Commerce’s job to answer.
The PUC sided with Enbridge and against Commerce, which was representing the public interest.
The PUC failed to make Enbridge meet its jobs promises
Now let’s examine one of the “public interest” arguments the PUC used to justify approving Line 3: Job creation for Minnesotans.
Enbridge promised Line 3 would create 4,200 union construction jobs, with half filled locally. It turned out to be a winning argument. During the PUC’s 2018 vote to approve Line 3, Commissioner John Tuma said the project would be like building two Vikings stadiums, “the Super Bowl of Super Bowl of projects. … That’s the big selling point.”
The PUC’s Certificate of Need for Line 3 said approving Line 3 would generate “thousands of construction jobs and inducing further employment…”
Here’s how Enbridge’s promise stacks up with reality.
Enbridge said Line 3 would be a two-year project. It’s clear now that Enbridge will finish the job in nine months. That’s a loss of a full construction season’s worth of jobs.
In the 4th quarter of 2020, Enbridge reported 4,642 people worked on Line 3. [Update: It didn’t say how many of these were union construction jobs.] Of those, only 33 percent were Minnesota residents compared to Enbridge’s promised 50 percent. And Minnesota workers only put in 28 percent of total hours.
Enbridge’s jobs report for the 1st quarter of 2021 was confusing.
The top half is labeled “Q4 2020.” The bottom half isn’t dated.
If the bottom half of the chart is 2021 jobs data, Minnesotan residents again only got about 30 percent of total hours.
But something’s off. Enbridge started building Line 3 in December. The 4th quarter 2020 report included only one month of full-time construction (1.1 million hours worked). The 1st quarter 2021 report would have included three months of full-time construction. One would expect the hours worked to be much higher. They weren’t. Enbridge reported 1.2 million hours worked, or only a 3 percent increase.
[Update: Elsewhere in the jobs report Enbridge reports 8,079 workers who worked 4.3 million hours.]
I emailed PUC Secretary Will Seuffert, sent him a copy of the chart, and asked him to help me understand the numbers.
He emailed: “For questions regarding … Enbridge’s Economic Report, you may contact Juli Kellner with Enbridge.”
I don’t trust Enbridge.
If job creation was in the public interest, why isn’t the PUC calling Enbridge for answers and accountability?
Why didn’t the PUC build in any accountability for Enbridge to meet its jobs promises? Enbridge faces no sanctions for failing to create the promised jobs for Minnesotans.
Apparently the PUC’s quasi-judicial structure protects it from having to answer these basic questions.
The public is left in the dark about whether the PUC is taking this issue seriously or taking any action at all.
There are many other examples where the PUC sided with corporate interests over the public interest.
Leaving the old and damaged Line 3 in the ground: The PUC didn’t require Enbridge to remove the old and failing Line 3. Enbridge didn’t want to pay the $1.2 billion cost. Instead the PUC allowed Enbridge to give landowners a one-time payment to leave the decaying pipeline in the ground. Further, because Enbridge didn’t rebuild in the same trench, it had to expand the pipeline corridor’s width. That meant clear cutting another 50-wide swath of pipeline easement through the state.
Ignoring human trafficking risks: Indigenous nations, organizations and their allies repeatedly raised concerns that a large influx of out-of-state workers would lead to an increase in human and drug trafficking. Enbridge denied there a connection between building Line 3 and human trafficking. The PUC believed Enbridge. It rubber stamped Enbridge’s weak “Human Trafficking Prevention Plan. Now, the PUC won’t comment on the Line 3 workers who have been arrested in human trafficking stings and whether the Commission did enough to protect the public. We have no data on the extent of the problem, or sanctions against Enbridge for human trafficking arrests, which the PUC could have required.
Ignoring climate damage: The PUC blithely dismissed climate damage as a legitimate argument against approving the new Line 3.
During the Line 3 approval process, there was no balance of public and private interest. The private interest was a granite boulder on the scale.
We need an entity like the PUC to work. That means taking the public interest seriously.