Policy and Regulatory Affairs Work

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CEEM engages with policymakers at the state and regulatory level to help solve problems within Minnesota’s clean energy business ecosystem. We also do work in this space to improve the quality of life for all Minnesotans. We do this by providing educational opportunities about how and why clean energy is adding jobs, strengthening local economies, and contributing to a strong quality of life for Minnesota citizens.

The Minnesota Legislature and Minnesota’s Public Utilities Commission have decades of policy-making experience within the energy sector. CEEM brings to the table a newer voice, by representing the business voice of clean energy businesses across sectors (including wind, solar, biomass, advanced grid and energy efficiency). This new voice at the table provides an invaluable opportunity for legislators and policymakers to hear how policy decisions might affect a businesses’ bottom line, or could either help or hurt their industry’s ability to grow jobs.

The energy and utilities industry continues to evolve by making investments in clean energy and related technologies. As customers demand and electric utilities adopt new clean energy, new regulation and business models are also evolving. A predictable regulatory policy that values clean energy will unleash economic opportunity.

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CEEM works with industry partners to track trends and raise the business voice of clean energy in regulatory proceedings to ensure small businesses have an equal voice with large utilities.

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Current Policy Goals

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Solar Policy

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Wind Policy

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Energy Efficiency Policy

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Biomass Policy

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Legislative Successes

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Regulatory Affairs Work

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Transportation Policy

Current Policy Goals

CEEM's 2021 Policy Priorities

In 2021, targeted opportunities exist to accelerate Minnesota’s economic recovery by removing red tape and creating market opportunities for energy efficiency and clean energy development.

Minnesota remains the only divided legislature in the nation with Republicans leading the Senate, and Democrats in the Governor’s Office and leading the House of Representatives. With this split, viable policies will need to have bipartisan agreement. The legislature has indicated its intent to heavily focus on the state budget for this session, which will limit its ability to consider a variety of issues. There is also a growing movement in the clean energy industry to ensure that any progress made addresses equity in the forefront.

ECO

The Energy Conservation and Optimization Act (ECO) would update Minnesota’s oldest and most successful energy policies to date -- the Conservation Improvement Program or CIP. Currently, the CIP program has provided more than $6 billion in savings to Minnesota taxpayers by implementing a suite of efficiency measures (like LED lighting, and more efficient heating and cooling systems) to homes and businesses. ECO would allow utilities to offer a broader suite of programs to their customers.

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ECO would also allow for fuel switching and electrification (like switching from a natural gas heating system to an all-electric source) to co-exist with and complement traditional energy efficiency. Utilities can help their customers save energy, while using increasingly more efficient and cleaner technologies.

Finally, an added benefit to this smart policy direction is job creation. This legislation will 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.

Community Solar

CEEM’s 2021 goal is to defend existing solar programs and accelerate the growth of Minnesota’s solar industry. We will work to strengthen and modernize Minnesota’s nation-leading Community Solar Garden (CSG) Program -- which was passed in 2013. The CSG program needs updates to recognize the growing pains and market changes from the past eight years. A main area of focus will be removing arbitrary red tape slowing the program down, like the contiguous county provision. As a reminder, the contiguous county provision is stated in law that all subscribers to a community solar garden must reside within the same county as the garden, or a contiguous county. Removing the contiguous county restriction will open up an industry-estimated 300 megawatts of untapped solar potential - leading to 12,000 new CSG construction jobs over the next 6-24 months.

Building Performance Standards

As more cities and states take steps to lower their energy usage, evidence suggests that policies on building energy usage are helping nudge energy consumption lower. CEEM will continue to support discussions on the use of enhanced building performance standards to reduce energy waste and GHG emissions from Minnesota’s buildings.

Solar Policy Work

Since 2013, Minnesota has been a leader in innovative solar legislation. Ninety-eight percent of Minnesota's solar capacity has been installed since 2013 when the bill to create Minnesota Community Solar Gardens was passed and the number of jobs in solar energy has doubled.

Today, Minnesota is the national leader in community solar garden capacity. Operated by Xcel Energy, the program has 680 MW installed across their territory, which is more than double the closest competitor’s capacity. A further 349 MW are in the application process to boost Minnesota’s numbers even higher in the coming years.

Facing a projected $2.4 billion budget deficit and the wild card of a pandemic, the 2020 Minnesota Legislative Session wrapped up with at least one success for the state’s clean energy industry. The Solar*Rewards program received a $15 million boost spread out over two years from the Renewable Development Account.

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Transportation Electrification Policy Work

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According to a report from the Minnesota Pollution Control Agency (MPCA), “the transportation sector is currently the largest source of greenhouse gas (GHG) emissions in Minnesota, accounting for about one-quarter of the total GHG emissions in the state.” The state has not made any progress in lowering emissions from the transportation sector in the last five years. 

CEEM is currently working with a broad coalition of organizations to help enact Clean Cars Minnesota standards.  The MPCA is considering adopting rules that would enable Minnesota to adopt both the Low Emission Vehicle (LEV) and Zero Emission Vehicle (ZEV) standards. Doing this would require vehicle manufacturers to deliver vehicles to the Minnesota market that produce lower emissions of greenhouse gases and other air pollutants. 

CEEM is dedicated to supporting solutions that work to reduce these emissions and electrify the transportation sector in Minnesota. Electrifying the transportation section not only helps reduce emissions, but it will also create additional jobs and help speed our transition to a clean energy economy.

Wind Policy Work

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Wind has been flying off the proverbial shelves by utilities in recent years as the economics fly in wind’s favor. In fact, even excluding the production tax credit (PTC), new wind builds are cheaper than new combined-cycle natural gas plant builds on a $/MWh basis in Minnesota. Factoring in the PTC and investment tax credit (ITC), wind and solar technologies are the cheapest form of new electricity generation in the state.

Between 2018 and 2019, unsubsidized utility-scale wind and subsidized utility-scale solar both experienced a 2.5 percent decline in price.

Despite its attractive low-cost for utilities and the land lease payments Minnesota landowners and surrounding communities receive when wind turbines are built in their community, wind continues to be a controversial energy source in some parts of the state.

Energy Efficiency Policy Work

The energy efficiency sector employs more than 45,000 Minnesotans and makes up three-quarters of Minnesota’s clean energy workforce. An energy efficiency job could mean someone working in smart building design or installing heating, cooling and ventilation systems. The American Council for an Energy-Efficient Economy (ACEEE) ranked Minnesota 8th out of all 50 states for its overall energy efficiency programs, the highest ranking in the Midwest.

Energy efficiency is our cheapest energy resource. An independent review of the economic impacts of Minnesota’s energy efficiency requirements for utilities, known as the Conservation Improvement Program, found that every one dollar that is spent on CIP results in four dollars to the state’s economy.

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U.S. buildings use 71 percent of the nation’s electricity, and emit 40 percent of the nation’s greenhouse gases. With such a huge footprint, the building sector is a critical target for energy efficiency measures. Policies that encourage efficiency upgrades in new buildings and efficiency retrofits in existing buildings can save millions in taxpayer dollars in public buildings, and additional savings for consumers.

Active Policies

Biomass Policy Work

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Bioenergy and biomass production represent economic opportunity for Minnesota. Biomass is any organic material derived from plants and animals, which are then turned into a fuel to be used in electricity generation, heating and/or cooling, and transportation.

The Minnesota legislature created an incentive program to attract commercial-scale production of advanced biofuels, renewable chemicals, and biomass thermal energy. The program is administered by the Minnesota Department of Agriculture. Governor Walz also established a Biofuels Council in 2019 “...to advise the Governor, and the Commissioners of the Department of Agriculture, the Department of Transportation, the Department of Commerce, and the Pollution Control Agency on the role of biofuels in reducing greenhouse gas emissions, and recommend policy and budget proposals to foster growth in the production and use of biofuels.” CEEM supports the responsible development of biomass for energy production and biofuels for transportation.

Legislative Successes

C-PACE (Commercial Property Assessed Clean Energy)

CEEM helped pass policy in 2019 to make financing for commercial clean energy projects more accessible, thus increasing the amount of clean energy adoption statewide. Commercial Property Assessed Clean Energy (C-PACE) financing is an innovative finance solution for building owners interested in energy efficiency and renewable energy upgrades. C-PACE funds help to close financial gaps related to clean energy investments.

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CEEM worked to modify C-PACE to allow for new sources of funding and allowed the financing to be used on new construction, and to improve the program’s ability to appropriately value projects. The program works particularly well for hotels and senior living facilities. Since passing updates in 2019, the statewide PACE program, known as the MinnPace program, was able to unleash $40 million in previously unavailable project funding. The money multiplier effect means the money has helped create hundreds of millions of dollars worth of construction projects across the state, boosting local economies and creating jobs.

Energy Storage

By nature, energy storage is able to provide backup power when grid power is lost, a characteristic that is important to both residential customers and business owners. Energy storage is of interest to the utility because they can store energy that is produced by their plants and not used (such as wind energy at night) and release the stored energy during the day when the demand is higher.

Because clean energy companies and utilities view energy storage innovation as an integral part of increasing clean energy usage statewide, CEEM worked to pass a bill in 2019 that would expand its usage.

The energy storage policy directs public utilities in the state to include energy storage as a part of their long-term resource planning. The bill also enables the Minnesota Department of Commerce to examine the costs and benefits of energy storage across Minnesota. Public utilities will also be allowed to petition the Minnesota Public Utilities Commission to recover costs associated with energy storage pilot projects.

CEEM views energy storage as an important part of the mix of technologies that will deliver reliable and increasingly clean energy to Minnesota’s businesses and households.

Solar*Rewards

The Solar*Rewards Program is offered to Xcel Energy customers and offers incentives to homeowners who install solar on their properties. This program is a useful tool to many clean energy businesses and CEEM has been a vocal supporter of continued funding for the program at the legislature.

In 2020 the Solar*Rewards program received a $15 million boost spread out over two years from the Renewable Development Account.

"Securing additional funding from the Renewable Development Account was a high priority for us," said Gregg Mast. "Amid the immense hardship caused by COVID-19, these funds will stimulate jobs and expand market opportunities for clean energy providing both immediate and long-term benefits for Minnesota. We thank policymakers from both sides of the aisle for coming together to pass this important bill.” See the full statement.

 

Previous Policy Successes

Regulatory Affairs Work

When bills are passed in the Minnesota legislature, it is up to regulatory bodies to interpret and enact them. The Minnesota Department of Commerce and the Minnesota Public Utilities Commission share responsibilities in developing and implementing regulatory policies and administering programs related to clean energy, including renewable energy and energy efficiency.

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The Minnesota Public Utilities Commission (PUC)

The Minnesota Public Utilities Commission (PUC) regulates utility obligations related to consumer issues, environmental issues, conservation improvement plans, regulation of rates, utility/energy resource and systems planning, and other important matters. CEEM asserts the economic and public benefits of clean energy, and represents the “business voice of clean energy” in regulatory matters through comments and participation in decisions before the Commission.

Recent important proceedings at the Commission include

  • Integrated distribution planning (see our blog), in which utilities work to plan for a modern grid, including increasing the use of clean energy technologies. Topics include designing how the electricity will get to customers, empowering energy consumers, , where and how energy resources can connect to the grid, and how much it may cost.
  • Integrated resource planning (IRP) where a regulated utility, the Commission, and stakeholders discuss the utility’s current and planned electricity generation for the next 15 years. Clean energy options are increasingly part of this discussion as utilities commit to lowering carbon output and as renewable energy options continue to have the lowest cost for replacing energy (like coal fired plants). (see our 2020 State Energy Factsheet for more information)

The Minnesota Department of Commerce

The Minnesota Department of Commerce (Department) advocates for the public interest before the PUC and other regulatory authorities. The Department also provides financial and technical assistance to those seeking to purchase clean energy systems in Minnesota. In addition, the Department conducts environmental reviews for large energy projects in the state.

Recent important work by the Department includes

  • Minnesota Energy Efficiency Potential Study: 2020-2029. This study examines utility energy conservation programs in Minnesota and estimates the potential to reduce electric and natural gas demand, as well as identifying market segments for energy efficiency solutions.
  • Minnesota Energy Storage Cost-Benefit Analysis (2019). This study examines the market potential and potential uses for energy storage solutions across the state. CEEM supported legislation passed in 2019 that provided support for and scoping of the study.

The Federal Energy Regulatory Commission (FERC)

The Federal Energy Regulatory Commission (FERC) regulates the transmission and sale of electricity and natural gas across state lines. Related to electricity, FERC regulates regional (wholesale) markets for energy. Regional organizations known as regional transmission organizations (RTOs) or independent system operators (ISOs) operate FERC and establish and evaluate market rules which impact economic opportunities for clean energy.

The Midcontinent ISO (MISO)

The Midcontinent ISO (MISO) operates the transmission system and markets that impact Minnesota’s regional system. Stakeholders are able to participate in discussions related to system and market opportunities for clean energy. MISO is FERC regulated, and also works with Minnesota’s officials in decision making.

Regulatory Documents


Resources and Archives

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