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.



Current Policy Goals

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The Energy Conservation and Optimization Act (ECO) would update Minnesota’s oldest and most successful energy policy 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 board 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.

100% Clean Energy/One Minnesota Path to Clean Energy

In March of 2019, the Governor Walz and Lt. Governor Flanagan Administration announced the 100 Percent Clean Energy by 2050 standard. This standard would require all electric utilities in Minnesota to use only carbon-free energy resources by 2050, while allowing each utility the flexibility to choose how and at what pace they meet the standard.

The bill passed in the DFL-controlled Minnesota House, but failed to proceed in the Republican-controlled Senate. CEEM was an active supporter of the bill, testifying in support at the legislature. CEEM’s Executive Director also provided this initial statement of support upon the bill’s first unveiling:

“Today, Governor Walz set a clear direction for Minnesota that prioritizes clean energy’s role in driving economic growth and prosperity for decades to come. We know that as we increase the deployment of clean energy, jobs are created, greenhouse gas emissions are lowered, and we are less reliant on imported fossil fuels,” said Gregg Mast, Executive Director of CEEM. “A carbon-free future provides significant economic opportunities for Minnesota and our business community. We thank Governor Walz for his leadership.”

The Walz/Flanagan administration also introduced a package called the “One Minnesota Pathway to Clean Energy.” The package supported a three-part policy, including changes to energy system planning, setting the 100% carbon standard for utilities, and encouraging improvements to energy efficiency (Energy Conservation and Optimization). The planning policy changes laws to prioritize clean energy in utilities’ energy system plans, requiring utilities to justify planning for any non-clean energy resource (known as Clean Energy First). Republican Senate leadership introduced their own Clean Energy First proposals during 2020. While House and Senate versions of Clean Energy First differed, progress indicates that Minnesota’s clean energy future continues to receive bi-partisan consideration.

Clean Cars

Minnesota’s Clean Cars standards was announced by the Governor Walz administration in the fall of 2019. The low-emission vehicle and zero-emission vehicle standards require vehicle manufacturers to deliver passenger cars, trucks and SUVS that produce lower and zero tailpipe emissions for sale in Minnesota.

A clean cars standard for Minnesota will improve air quality, lower carbon emissions, and expand consumer choice while also spurring economic growth, seeding innovation, and tackling climate change.

At the time of the policy announcement, CEEM’s Executive Director released this statement in support of the policy:

“We know the transportation sector is the number one source of greenhouse gas emissions in our state. Adopting the Clean Cars Minnesota standards is a critical and necessary step in the right direction. Providing Minnesotans with expanded access to low and zero-emission vehicles is a good thing and improves our ability to swiftly move towards a clean transportation system. These standards will strengthen our economy, advance innovation, drive new investment and create jobs. We thank Governor Walz for his commitment to a clean energy future and ensuring that Minnesota leads the way here in the Midwest.”

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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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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