Small victories and missed opportunities

UPDATED 6/4/2020

The 2020 legislative session ended on May 19 with some clean energy wins and missed opportunities. CEEM held a webinar recapping events (see webinar slides). We were joined by over 60 attendees and featured perspectives from Senator Eric Pratt, R-Prior Lake, and Steve Kelley, the Minnesota Department of Commerce’s Commissioner. Both speakers noted progress on clean energy, and the importance of CEEM’s non-partisan approach at the Capitol. Both also noted the incredible challenges posed by COVID-19, future challenges to state budgets, and the state of clean energy policy opportunities.

Governor Walz has the power to call legislators to a special session to continue deliberating. At the time of this newsletter, we do not have a confirmed date. Senate Majority Leader Paul Gazelka, R-Nisswa, stated that Governor Walz told him June 12 (Source: MPR). We expect topics to include COVID-19 responses, support for communities in the Twin Cities damaged during the unrest following the senseless death of George Floyd, state bonding bills, and select other topics.

We continue to hope lawmakers will consider missed opportunities in clean energy during special session. For example, the Energy Conservation and Optimization (ECO) Act which would improve our statewide energy efficiency program (CIP), had bipartisan authors and strong support from utilities, energy cooperatives, businesses and others. We strongly support ECO, and believe energy waste reduction and local job creation will result if passed.

We will continue to monitor changes at the Capitol. Feel free to reach out to Benjamin with any questions at bstafford@cleanenergyeconomymn.org.

In what will go down in history as one of the most tumultuous times in our state’s economic history, the 2020 legislative session started and ended in very different places. COVID-19 changed conversations about many different aspects of daily life, including work at the Capitol. The state of Minnesota started the 2020 legislative session with over a $1 billion surplus, but recent forecast numbers have shown the immediate impact of job losses and business closures have resulted in a $2.4 billion deficit.

Despite these hardships, the 2020 session did end with some small victories for the clean energy community. The Renewable Development Account bill included $15 million in funding for Solar*Rewards. Funding this program will stimulate jobs and expand market opportunities for clean energy providing both immediate and long-term benefits for Minnesota. We are grateful for the bipartisan work of the House and Senate energy committee leads who helped make this happen.

The biggest disappointments of the session included running out of time to pass the bipartisan-supported Energy Conservation and Optimization (ECO) Act or a bonding bill. The ECO Act would have increased energy efficiency use across the state and created new jobs for the largest sector of the clean energy industry. Bonding bills or what Governor Walz has called the ‘Local Jobs and Projects Plan’ are typically passed every other year and issue state bonds to help pay for state-owned infrastructure projects. This year’s bonding requests included a large portion of energy efficiency and clean energy-related projects at Minnesota’s public colleges and universities. Bonding dollars to repair and replace building systems provide public benefits by improving state-owned buildings and supports significant job creation. We are hopeful a bonding package will be passed during a special session.

Bills that passed:

RDA (Renewable Development Account) funding for Solar*Rewards

Authors: Omnibus bill. Representative Jean Wagenius and Senator Dave Osmek

The Solar*Rewards program received financial support this year. We’re supportive of this program because it helps expand solar development in the state of Minnesota. The program helps clean energy businesses attract new customers and grow their businesses, creating jobs and strengthening local economies. The bill passed thanks to the hard work and strong leadership from Representative Wagenius, Senator Osmek, and Commerce Commissioner Steve Kelley.

Bills that did not pass:

Energy Conservation and Optimization Act or ECO

Authors: Representative Zack Stephenson and Senator Jason Rarick

The bipartisan-supported Energy Conservation and Optimization Act or ECO ran out of time for a Senate vote before the end of session. The House had previously passed the bill on May 11.

This legislation would provide new energy efficient options to businesses and residential customers, while also driving local job growth through technological innovation and the development of new utility programs.

ECO was designed as an expansion of the state’s Conservation Improvement Program or CIP and would have allowed for energy savings through efficient fuel switching and load management. ECO provides the policy direction to allow traditional energy efficiency and electrification to work together better than they currently do.

State Bonding

Bill Authors: Representative Mary Murphy and Senator Dave Senjem

Neither chamber could pass a bonding bill. This is a significant missed opportunity for the clean energy sector. For example, the 2020 capital request for the state’s Higher Education Asset Preservation and Replacement (HEAPR) funds detailed $350 million in total, with significant energy efficiency and clean energy improvement projects. This work keeps 59 campuses warm, safe, and operating efficiently and effectively, and employs local laborers.

Community Solar Garden program

Bill authors: Representative Jamie Long and Senator Dave Osmek

There were strong efforts to reform Minnesota’s community solar program this year. CEEM supported efforts to remove the contiguous county language which limits the growth and expansion of community solar gardens. Passage of these reforms would create jobs, add additional tax revenue streams to local governments across the state, improve rural electrical grids, and diversify farmer income.

Ultimately, all parties could not come to an agreement.

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Clean Energy First

Bill authors: Senator Dave Senjem and Representative Zack Stephenson

All versions of Clean Energy First update and broaden the current renewable preference enacted in 1993, and are built around a simple concept, that whenever an electric utility proposes to add or replace generation – whether because of increased customer demand, power plant retirements or the expiration of power purchase agreements – the utility would look first to clean energy resources to fill that need.

Ultimately, the House and Senate versions of the bill could not overcome their differences in order to pass this bill this session.

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Solar on Schools

Bill authors: Representative Patty Acomb and Senator Scott Dibble

Solar on Schools (HF1133/SF1424) was a forward looking idea championed by several solar companies to fund a program to assist public school districts across the state to install solar, saving energy costs for the district and local taxpayers while also providing a learning opportunity for students.

Solar on Schools sought funding from the Renewable Development Account, but was ultimately cut from the final bill.

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Bioincentive Program

Bill authors: Senator Jason Rarick and Representative Mike Sundin

The Bioincentive Program was established in 2015 to encourage commercial-scale production of advanced biofuels, renewable chemicals, and biomass thermal energy through production incentive payments. Unfortunately, a funding shortfall exists for the program. Legislation this year aimed to address the funding gap with an increase in dollars allocated for the program. However, efforts to secure increased funding were not successful.

Policy items defended:

We also offered defense of clean energy legislation under threat during session. The Senate attempted to remove the authority of the Pollution Control Agency (PCA) to adopt maximum allowable emissions from motor vehicles. This was an attempt to limit the PCA’s Clean Cars Minnesota efforts, which aim to lower carbon emissions and encourage our state’s alternative fuels and electric vehicle market. Changing this long-standing authority would create market uncertainty that can cost Minnesota, both in market offerings and investment opportunities. According to our 2019 Clean Jobs Midwest Report, the advanced transportation sector added 482 jobs in the state in 2018, a 16.8 percent growth rate. Electric vehicle jobs, meanwhile, grew by nearly 25% to 896 workers.

In the final days of session, the Senate Capital Investment Committee passed a bonding amendment that included exempting certain building projects from statewide building codes, such as Sustainable Building 2030. These building codes are important to our clean energy industry, promoting progressive energy waste reduction and efficiency, and carbon reduction. Along with allies, CEEM took swift action to notify lawmakers in the House of the action. Ultimately no bonding bill passed, and House leadership is aware of our sector concerns.

Looking Ahead

The emergence of COVID-19 upended our normal way of life in mid-March and that included the work of the legislature. The appetite and mental space for big policy shifts in energy was dramatically diminished. Before campaign season starts in earnest this summer, the legislature is currently in talks with the Walz-Flanagan administration to address several outstanding issues in anticipation of a June 12 Special Session. We are urging that assistance for clean energy be one of the issues addressed in this special session.

Despite the challenges ahead, there is a new space to talk about recovery efforts and how clean energy businesses can play a vital role in the revitalization of Minnesota’s economy.

CEEM is well positioned to take this message to policymakers at all levels throughout the summer and fall months. Clean energy businesses have been responsible for impressive job and economic growth in the past, and they can be an important part of the solution moving forward. Keeping that message top of mind is how CEEM will be spending the remainder of this year.