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Minnesota lawmakers look to expand clean energy

Minnesota lawmakers are looking to overhaul a state energy conservation program that hasn't been meaningfully updated since 2007.

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Minnesota Capitol. Forum News Service

ST. PAUL — Minnesota lawmakers are looking to overhaul a state energy conservation program that hasn't been meaningfully updated since 2007.

Committees in both chambers of the state Legislature on Thursday, April 23, approved of a bill that allows utility companies in Minnesota to make new investments in clean technology and offers them incentives to create new energy efficiency programs for their residential and businesses customers. Legislators and energy sector officials who support the bill said it will lighten the load on the state's power grid and cut greenhouse emissions in the process.

The Legislature heard much of what the bill proposes in a separate bill that it failed to pass last year. Having since built a broad coalition of support for it, lawmakers introduced a new version last month.

"There are technology changes that are coming. There are societal ways of looking at things that are changing, and this is trying to help incorporate that," Sen. Jason Rarick, who is carrying the bill in the Senate, said Thursday.

If the bill becomes law, legislators will have effectively altered the state Conservation Improvement Program for the first time since 2007, when it was last reauthorized. The program, among other things, sets savings goals for electric and gas utility companies that operate in Minnesota and offers rebates on energy-efficient appliances.

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Under the bill, Minnesota's yearly savings goal would increase to 2.5% of annual electricity and natural gas retail sales. Community-owned utilities, including those owned and operated by municipalities and non-profit cooperatives, would retain their annual savings goal of 1.5% of yearly gross sales.

The bill increases the savings target for privately owned electric companies, meanwhile, to 1.75% of annual gross retail sales. Privately owned natural gas companies would see their goal reduced to 1% of that measure.

Depending on the size of their customer bases, privately owned utilities would be allowed to invest between $3 million and $6 million in clean technology upgrades every three years. To the ire of several lawmakers, companies would be able to work those costs into their rate bases, potentially increasing bill payment amounts.

Some critics of the bill, including the Minnesota Chamber of Commerce, say it would unfairly affect consumers who are already struggling to pay their bills amid the economic downturn brought on by the coronavirus pandemic. More than 450,000 Minnesotans have so far applied for state unemployment benefits since the stay at home order meant to curb the pandemic went into effect last month.

Rarick, R-Brook Park, and other supporters of the bill, however, said that any consumer costs brought about by those investments would likely be negligible. Further, said Rep. Zack Stephenson, the bill's prime sponsor in the House, the legislation enjoys bipartisan support and is backed by nearly every major utility provider in the state.

"We’ve reached a complex agreement with a very large group of stakeholders and we think it’s important to ratify this agreement as soon as possible," Stephenson, DFL-Coon Rapids, said Thursday.

Among the bill's few detractors in the energy sector, however, are home heating oil and gas companies. Industry group representatives told lawmakers Thursday that a provision in the bill that encourages companies realize their savings goals by expanding their fuel-switching offerings, saying it could put a dent in the home heating business.

But the bill, Rarick pointed out, does not provide incentives for companies that develop fuel-switching programs, which oftentimes help households to swap out their home heating systems for ones powered by air or electricity. It would however, offer incentives to broaden load-management programs, though the details of those incentives have yet to be finalized.

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Such programs seek to reduce the load on the power grid during hours of peak demand, sometimes through the use of electronic equipment that utility customers can volunteer to have installed. Load management and other options the bill lays out to reduce fossil fuel consumption could drastically reduce Minnesota's emissions, state Department of Commerce Commissioner Steve Kelley said Thursday, in addition to lowering bill payments.

The bill was sent Thursday to the full Legislature's floor, though lawmakers said it will require additional committee hearings.

Minnesota Capitol

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