A long-running local government collaboration in southwestern Minnesota is helping to insulate the region from the kind of controversies and misinformation that have plagued rural clean energy projects in other states.

The Rural Minnesota Energy Board has its origins in a regional task force that was set up during the mid-1990s as the state’s first wind farms were being built. The task force was instrumental in persuading state legislators in 2002 to create a wind energy production tax, which today generates millions of dollars in annual revenue for counties and townships that host wind projects.

The group’s scope and membership has since gradually expanded to include 18 rural counties that pay monthly dues for support on energy policy and permitting. The board represents members at the state legislature and in Public Utilities Commission proceedings. At home, it facilitates community meetings with project developers, helps draft energy-related ordinances, and educates members and the public on the benefits of energy projects.

The result, say clean energy advocates and developers, has been a uniquely consistent approach to local energy policy and permitting that makes it easier for renewable companies to do business in the region.

“The rural energy board has been a critical, important body and one of the major reasons why renewable energy has been successful in southwestern Minnesota,” said Adam Sokolski, director of regulatory and legislative affairs at EDF Renewables North America. “Their policies have encouraged good decision-making over the years and led to a stable and productive region for energy development.”

EDF Renewables has worked with the board on at least nine projects in the region. Sokolski said he’s come to admire its approach to policy making, its support for transmission projects, and its efforts to educate members on clean energy. 

“It’s positive to have county leaders talking to each other about energy projects, about how … they can approach those projects so they best benefit their constituents and the public,” he said.

Southwest Minnesota has the state’s densest concentration of wind turbines and is increasingly attracting solar developers, too. Wind turbines account for more than 4,500 megawatts, or around 22%, of the state’s generation capacity, making Minnesota a top 10 state for wind production.

‘It’s all economic development’

The board counts the wind production tax among its most significant accomplishments. Large wind farms pay $1.20 per megawatt-hour of generation. Counties receive 80% of the revenue, with the remainder going to townships. A similar fee also exists for large solar projects.

The fee delivers millions of dollars annually, allowing local governments to construct buildings and repair bridges and roads without raising their levies for years. According to American Clean Power, Minnesota municipalities receive $44 million annually in taxes, and private landowners receive nearly $41 million in lease payments from wind and solar companies.

That has enabled counties to stave off opposition by pointing out that turbines and solar are economic development, according to Jason Walker, community development director for the Southwest Regional Development Commission, which manages the board, said the local government revenue generated from wind and solar projects has helped reduce opposition to projects.

“It’s all economic development here,” Walker said.

When opposition does emerge, such as around a recent 160 megawatt solar project in Rock County in the state’s far southwest corner, the board works with commissioners to make sure local leaders have factual information as opposed to misinformation.

Peder Mewis, regional policy director for the Clean Grid Alliance, praised the board for creating an information-sharing culture among members that helps prepare them for clean energy development. He said many developers appreciate that the region’s ordinances are similar because of the board, and that they have maintained good relationships with members over the years.

“There are other parts of the state that are thinking, ‘Is there something here that we could replicate or duplicate?’” Mewis said.

Jay Trusty, executive director of the Southwest Regional Development Commission, said the board plays an essential role in lobbying for state policy to support clean energy development. In addition to the production taxes, the board regularly defends the local distribution of those funds when lawmakers consider other uses for the revenue. The board more recently lobbied for changes to the state transmission permitting process, which were approved this year, and it supported an expansion for Xcel Energy’s CapX 2020 high-voltage transmission project before state utility regulators.

Minnesota Public Utilities Commissioner John Tuma recalled the board’s support for the state’s 2008 renewable energy standard, which gave Republican Gov. Tim Pawlenty important rural support for signing the legislation.

“They bring an economic voice to the table,” Tuma said, adding that the board continues to be active in conversations about regional grid policies.

Nobles County Commissioner Gene Metz has served on the board for 12 years. The region’s decades of experience and collaboration on wind energy has helped make residents more comfortable with clean energy projects, he said, leading to fewer controversies. 

In counties outside the board’s territory, “they’re getting more pushback, especially on solar projects,” he said.

Gene’s cousin, Chad Metz, serves as a commissioner in Traverse County, which is not a member and has a mortarium on clean energy projects. Chad Metz sees clean energy as inevitable and wants the county to join the rural energy board to protect its economic interests. “The benefits outweigh the negatives, and it will just become part of life,” he said.

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Amid a surge in utility shutoffs, and in the face of a groundbreaking study finding racial disparities in those outcomes, Minnesota’s largest utility is taking a closer look at the issue.

In a November agreement with consumer groups and the state’s Public Utilities Commission, Xcel Energy has outlined a series of steps to provide more information to customers and make it easier for them to restore service.

Xcel also agreed to hire an outside consultant to conduct a one-year study of disparity issues related to disconnections and outages and, separately, do its own analysis of outages. The move came in response to a University of Minnesota study released earlier this year that found that people of color were more likely than White households to have their service disconnected for falling behind on bills, even when controlling for income and home ownership status. 

The agreement falls short of a demand from the Minnesota Attorney General’s Office for Xcel to institute a temporary moratorium on shutoffs until racial disparities are addressed, based on a recommendation from Fresh Energy and a coalition formed by Cooperative Energy Futures, Environmental Law & Policy Center, Sierra Club, and Vote Solar. 

Erica McConnell, staff attorney for the Environmental Law & Policy Center, represented the clean energy organizations advocating for grid equity. She supported the agreement but believes it will do little to help reduce disparities in shutoffs.

“These are very important improvements that don’t really address — and the commission didn’t discuss — the disparate impacts and the racial disparity (of disconnections) and how to address that specifically,” she said.

A temporary moratorium on disconnections would have allowed for time to study disparities and find ways to address them.  

“The commission didn’t talk about that,” McConnell said. “They didn’t address it at all, so that was disappointing. I understand it’s uncomfortable and it’s a tough issue, but it’s disappointing they shied away taking it head on.”

Shutoffs soaring

Beyond the challenge of disparities, Xcel’s number of service disconnections has skyrocketed. More than 45,000 Xcel customers saw their power shut off this year, a number that has grown significantly over the last two decades. 

Xcel agreed to many proposals from the Citizens Utility Board of Minnesota, the Energy CENTS Coalition, clean energy organizations and the Public Utilities Commission to create more consumer protection against shutoffs.

Xcel Energy’s involuntary disconnection notices began rising significantly in 2023 before skyrocketing in 2024, when shutoffs doubled the prior year’s total for May through July. Despite Minnesota’s cold weather protection rules that limit disconnections during the winter through April 30, shutoffs even grew during the winter months.

Clean energy and consumer organizations point to Xcel’s ability to remotely disconnect customers who have smart meters as a major reason for the shutoffs, along with inflation, escalating rate increases and challenging repayment requirements. Xcel had demanded customers pay 50% of what they owe to reconnect, which may have violated Minnesota law, according to the Citizens Utility Board. 

Xcel’s pact with the Citizens Utility Board and Energy CENTS “is going to make payment agreements more affordable and hopefully help households that are behind on their bills avoid getting shut off and get caught back up,” said Annie Levenson-Falk, executive director of the Citizens Utility Board of Minnesota.

The utility board and Energy CENTS Coalition forged the agreement with Xcel under the purview of the Public Utilities Commission, which will issue a final order later. The agreement requires the following:

• Customers will pay 10% of what they owe to have the power turned back on, instead of 50%.
• The amount due will have to be at least $180 before Xcel can send a disconnect notice.
• Xcel cannot shut off power until a customer reaches a $300 past due balance. Xcel’s data from this year showed disconnected customers were $441 in arrears on average in October and much higher in other months.
• The utility must wait at least 10 days after a shutoff notice has been sent to disconnect, up from five days.
• Xcel must post clear disconnection and payment policies on its website, along with information about customers’ right to develop an affordable repayment plan. Any changes Xcel makes to shutoff policies and repayments have to be reported to the commission, and it must collect data on repayments and customer agreements.
• A variance allowing remote disconnections without field visits from Xcel remains, but the utility must contact customers via voicemail and use at least one other form of electronic communication.

Xcel spokesperson Kevin Coss said the utility believes “this agreement is a great step toward reducing disconnections for some of our customers who continue to struggle economically.”

Options for customers

George Shardlow, Energy CENTS executive director, said he thought a clearer explanation of the disconnection process on Xcel’s website brings a transparency that had been lacking.

“I don’t think the average person even knows that they have a right to negotiate when they’re struggling to pay their bills,” he said. “It’s all sort of opaque. We’re excited to see better documentation of people’s rights on Xcel’s website.”

Minnesota law says utility customers are “entitled” to a payment plan they can afford, Shardlow said. Customers who cannot afford the 10% down payment can still negotiate for a settlement that fits their budget, he added.

Shutoffs have been growing. This year Xcel sent disconnection notices to 51,000 customers in January and 71,000 in July. But not all notices result in shutoffs. The highest month for disconnections, May, saw more than 10,000 shutoffs. By August, slightly more than 8,400 customers had been disconnected.

Coss said Xcel works with customers to avoid disconnection by starting a nine-week process of contacting them through multiple channels to “point them to available options for energy assistance — both through the federal Low Income Home Energy Assistance Program and our own affordability programs — and offer flexible payment plans tailored to their circumstances.”

Minnesota also has cold weather protections that greatly reduce utilities’ ability to disconnect customers in winter months. But people who fail to pay their bills in winter see their balances grow, leading to higher disconnections in summer when they fail to catch up.

Xcel agreed to monitor progress and collect more data on racial disparities involving customers involuntarily shut off. The utility has already hired a third party evaluator, as the agreement requires, to study its shutoff policies and hold stakeholder engagement meetings during the year-long process.

Coss said disparities result in inequities throughout society and Xcel has been doing its part to address them. The utility has worked with the study’s authors and advocacy groups to identify actions to reduce disparities, he said.   

Earlier this year, the commission also approved a proposal by Xcel for a pilot program that will provide bill credits to select census tracts with high levels of disconnections. Coss said Xcel will provide $500 bill credits to customers in low-income census areas who have a greater than $2,000 past-due balance, using money available from a quality of service program.

Minnesota Public Utilities Commissioner Joe Sullivan said he believed the agreement negotiated among the nonprofits and utility would reduce the financial strain on households facing disconnections and assist Xcel in recovering debt.

“I thought that in that docket people came together and were constructive,” he said. “I feel like I’m hopeful that the order will make some progress.”

PUC Chair Katie Sieben said the commission is “always looking at affordability, and especially as it pertains to low-income customers, I think we have a great track record on working with stakeholders and with utilities to provide robust low-income assistance to customers.”

She mentioned the commission’s role in approving an Xcel pilot to decrease payments for low-income, low-usage customers and a September decision that used a penalty for the utility’s service quality underperformance to provide bill credits to around 1,000 customers with the oldest outstanding balances in low-income census tracts.

‘Still more work to do’

The agreement does not solve the problem of low-income customers struggling to pay utility bills. Shardlow said Energy CENTS and the Citizens Utility Board lobbied the state legislature to allow households to apply for energy assistance funding the entire year instead of the current policy of having a deadline of May 31. Only 20% of eligible Minnesota households participate in the program, he said.

Levenson-Falk wants Xcel to consider eliminating the 1.5% late fee it charges customers on their balance, or consider donating the money to affordability programs.

The Citizens Utility Board also wants Xcel to develop a plan to reconnect customers quickly on days of high heat or poor air quality. Coss said Xcel will evaluate reconnecting customers disconnected during days of air quality alerts.

Levenson-Falk said the agreement at least makes progress. “I think we resolved everything that we had discussed with Xcel but that’s not to say that we think this is going to solve the problem, because, of course, there are still going to be continuing shutoffs, and those are still very concerning,” she said. “There’s still more work to do.”

This story was updated to include a statement from Minnesota Public Utilities Commission Chair Katie Sieben.

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A top executive with Minnesota’s largest utility says data center growth will not prevent it from meeting the state’s 100% clean electricity law, but it may extend the life of natural gas power plants into the next decade.

“As we take all of that coal off the system — even if you didn’t add data centers into the mix — I think we may have been looking to extend some gas (contracts) on our system to get us through a portion of the 2030s,” said Ryan Long, president of Xcel Energy’s division serving Minnesota and the Dakotas. “Adding data centers could increase the likelihood of that, to be perfectly honest.”

Long made the comments at a Minnesota Public Utilities Commission conference this fall exploring the potential impact of data centers on the state’s 2040 clean electricity mandate.

The expansion of power-hungry data centers, driven by artificial intelligence, has caused anxiety across the country among utility planners and regulators. The trend is moving the goalposts for states’ clean electricity targets and raising questions about whether clean energy capacity can keep up with demand as society also tries to electrify transportation and building heat.

Minnesota PUC commissioner Joe Sullivan organized last month’s conference in response to multiple new data centers projects, including a $700 million facility by Facebook’s parent company Meta that’s under construction in suburban Rosemount. Microsoft and Amazon have each acquired property near a retiring Xcel coal plant in central Minnesota. 

“We need to ensure that our system is able to serve these companies if they come,” Sullivan said, “and that it can serve them with clean resources consistent with state law.” 

Alongside concerns about whether clean energy can keep up with new electricity demand, there’s also an emerging view that data centers — if properly regulated — could become grid assets that help accelerate the transition to carbon-free power. Several stakeholders at the Oct. 31 event shared that view, including Xcel’s regional president.

A 100-megawatt data center could generate as much as $64 million in annual revenue for Xcel, enough to help temper rate increases or cover the cost of other projects on the system, Long said. He said the company wants to attract 1.3 gigawatts worth of data centers to its territory by 2032, and it thinks it can absorb all of that demand without harming progress toward its 2040 clean energy requirement.

Long said data center expansion will not change the company’s plans to close all of its remaining coal-fired power plants by 2040, but it may cause them to try to keep gas plans operating longer. Ultimately, meeting the needs of data centers will require more renewable generation, battery storage, and grid-enhancing technology, but rising costs and supply chain issues have slowed deployment of those solutions.

Other utilities echoed that optimism. Julie Pierce, Minnesota Power’s vice president for strategy and planning said the company has experience serving large customers such as mines in northeastern Minnesota and would be ready to serve data centers. Great River Energy’s resource planning director Zachary Ruzycki said the generation and transmission cooperative “has a lot of arrows in its quiver” to accommodate data centers.

Ruzycki noted, too, that much of the interest it has received from data center developers is because of the state’s commitment to clean energy. Many large data center operators have made corporate commitments to power them on 100% carbon-free electricity, whether from renewables or nuclear power.

Pete Wyckoff, deputy commissioner for energy at the Minnesota Department of Commerce, expressed doubts about the ability to meet unchecked demand from data centers. Even with the state’s recent permitting reforms, utilities are unlikely to be able to deliver “power of any sort — much less clean power — in the size and timeframes that data centers are likely to request.”

He sees hydrogen, long-duration batteries, carbon capture, and advanced nuclear among the solutions that will eventually be needed, but in the short-term the grid could serve more data centers with investments in transmission upgrades, virtual power plants, and other demand response programs.

“These solutions can be deployed faster and cheaper than building all new transmission and large clean energy facilities, though we’ll need those, too,” Wyckoff said.

Aaron Tinjum, director of energy policy and regulatory affairs for the Data Center Coalition, said data centers provide the computing power for things like smart meters, demand response, and other grid technologies. The national trade group represents the country’s largest technology and data center companies.

“We can’t simply view data centers as a significant consumer of energy if they’re all helping us become more efficient, and helping us save on our utility bills,” Tinjum said. 

He also pointed to data centers’ role in driving clean energy development. A recent report from S&P Global Commodity Insights found that data centers account for half of all U.S. corporate clean energy procurement. 

The true impact of data centers on emissions and the grid is complicated, though. Meta, which participated in the recent Minnesota conference, says it matches all of its annual electricity use with renewable energy, but environmental groups say there is evidence that its data centers are increasing fossil fuel use and emissions in the local markets where they are built.

Amelia Vohs, climate program director with the Minnesota Center for Environmental Advocacy, raised concerns at the conference about whether data center growth will make it harder to electrify transportation and heating. She pointed to neighboring Wisconsin, where utilities are proposing to build new gas plants to power data centers.

“This commission and the stakeholders here today have all done a ton of work and made great progress in decarbonizing the electric sector in our state,” Vohs said. “I worry about possibly rolling that back if we all of a sudden have a large load that needs to be served with fossil fuels, or [require] a fossil fuel backup.” 

The Minnesota Attorney General’s Office argued that state regulators need to scrutinize data center deals to make sure developers are paying the total cost of their impact on the system, including additional regulatory, operational and maintenance work that might be required on the grid.

In an interview, Sullivan said he was impressed by tech companies’ interest in having data centers in Minnesota because of the 2040 net zero goal, not despite it. They want to buy electricity from Minnesota utilities rather than build their own power systems or locate in neighboring states, he added, and the October meeting left him confident that “we can deal with this.”

This article first appeared on Energy News Network and is republished here under a Creative Commons license.

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A year-old state law is helping to bring new voices before the Minnesota Public Utilities Commission, and advocates and officials hope its impact will grow as more organizations learn about its existence.

Since 2007, small nonprofits have been able to seek financial compensation to help pay for expert testimony they provide in utility rate cases. State lawmakers last year expanded the concept to cover a broader range of cases, including utility pilot programs, infrastructure projects, and performance measures.

“It’s really about getting voices to the table to present us with new arguments and new issues for us to consider,” said Commissioner Joe Sullivan.

Since the law took effect in May 2023, the commission has authorized $124,318 in payments to four organizations, including two groups — Community Power and Minnesota Interfaith Power & Light — that had never before requested or received compensation for expert testimony. The other recipients were the Citizens Utility Board of Minnesota and Energy CENTS Coalition, which advocates for low-income ratepayers.

Under the previous rules, some years, including 2019, 2021, and 2022, saw no payouts at all. In 2023, regulators approved $96,000 for testimony under the old program before state lawmakers expanded its scope.

“We’re glad to see broadening participation due to the change in this intervenor compensation law,” said state Sen. Nick Frentz, a Democrat from North Mankato who supported the legislation. “Our hope is that the more voices that contribute, the better the quality of the eventual PUC decisions.”   

Where the money goes

Anyone can comment on utility commission matters, but having a significant impact requires investing in staff time and experts — precious commodities unavailable to many smaller nonprofits.

The compensation process involves nonprofits submitting documentation and a sum for testimony related to a specific case. Rules require the nonprofits to have a payroll of no more than $600,000 for participation in commission proceedings and 30 full-time or fewer employees for the previous three years. The commission judges the merits of reimbursement based on six criteria that focus on whether the organization’s testimony materially impacted its decision.

Once nonprofits receive approval for compensation from the commission, the utility involved in that case pays them. The Legislature set a maximum limit on how much any utility will pay annually to intervenors, ranging from $1.25 million for Xcel Energy to $100,000 for Otter Tail Power and other smaller utilities.

Although the new law broadened the types of cases in which nonprofits could seek compensation, three of the six 2024 awards went to organizations testifying in the Xcel Energy rate case. However, the Citizens Utility Board received the largest amount for its recommendations in an integrated gas resource planning docket, an issue that would not have been eligible for compensation in the past.

Nonprofits typically use the money to offset the high costs of expert testimony or staff time related to cases where utilities usually spend millions to influence the commission’s decisions. Other intervenors often include larger nonprofits, industrial organizations, chambers of commerce, labor unions, national associations and, on occasion, cities and counties.

Frentz, who chairs the Senate’s Energy, Utilities, Environment and Climate Committee, said he thinks more organizations are out there that could provide testimony at the commission. But they must have the resources available before intervening, and believe their input will influence the Public Utilities Commission, he said.

Commissioner Sullivan said regulators have “seen a little bit more utilization” of the compensation law. The 2023 law specifically encouraged tribal participation, though no tribes have done so yet. Barriers may include a lack of familiarity with the commission or the need for a local budget to hire experts or allocate staff time to complex cases, Sullivan said.

‘A difficult needle to thread’

Solar entrepreneur and tribal clean energy advocate Robert Blake said he was not surprised to hear tribal nations had not participated in the expanded intervenor law. He said many are administratively stretched thin and focused on taking advantage of federal and state opportunities to fund clean energy projects on reservations.

Also, many of the issues that come before the commission involve large utilities that do not serve reservations, which often also get electricity from locally owned cooperatives, Blake said.

Community Power and Minnesota Interfaith Power & Light each received $17,984 after each requested nearly $26,000. Community Power employee Alice Madden said the money paid for expert witnesses who “cost hundreds of dollars per hour” but did not cover the staff time of either organization, which involved door-knocking and collecting more than 1,000 ratepayers’ comments.

“The intervenor compensation works for covering narrow costs but does not help people intervene and front the costs of that,” Madden said. “It accomplished allowing us to have extra witnesses, but it does not cover the full cost of intervening, nor of organizing to get community voices to the table.”

Minnesota Interfaith Power & Light Executive Director Julia Nerbonne was disappointed that the commission only partially reimbursed what it had requested, but she decided against appealing the decision. The organization has been involved in several dockets outside of rate cases and may someday ask for compensation for expert witnesses.

“I feel like the PUC has a difficult needle to thread, and I appreciate that they did that (provided compensation),” Nerbonne said. “I want to say thumbs up for expanding it.”

In its order, the commission granted compensation to the two organizations because they “made a unique contribution to the record, promoting public policies and representing interests of people of color and low-wealth households that would not otherwise have been adequately represented. The evidence and arguments they presented would not otherwise have been part of the record and were an important factor in producing a fair decision.”

Citizens Utility Board Executive Director Annie Levenson-Falk said the compensation received in 2024 was the amount it would have been for similar testimony in the past. The commission granted it compensation in two dockets, the largest of which was $41,385, for promoting a requirement that natural gas providers file periodic integrated resource plans that the commission has required from electric companies. The money paid for some of the expense of outside experts to research and testify on behalf of the organization.

In an order approving payment in the natural gas case, the commission said it had adopted the Citizens Utility Board’s recommendation that the state’s three natural gas utilities develop integrated resource plans. The commission determined how much each utility would pay the board, with Xcel providing nearly $30,000.

The prospect of compensation does not impact the Citizens Utility Board’s decisions on whether to intervene in commission matters. “It is something we keep in mind at the end if the PUC (Public Utilities Commission) has adopted a position we advocated,” Levenson-Falk said.

Levenson-Falk said she was unsurprised that organizations new to regulatory proceedings have yet to often participate in hearings or ask for reimbursements. “I think it is more difficult for a group that does not have utility regulatory professionals,” she said. “We have a team of folks who do this kind of work, but if it’s your first time coming to the PUC, it’s a challenging statute to take advantage of. It’s not easy.”

Energy CENTS Coalition received $36,785, the second largest disbursement under the new law, for testimony in the Xcel rate case that led the commission to adopt a “low-income, low-usage” discount. The organization provided “an important factor in producing a fair decision and would not otherwise have been part of the record,” the commission said in its order.

Executive Director George Shardlow wants to expand the organization’s involvement beyond rate cases to other issues. “It’s very helpful for a small consumer advocacy organization to have this added support to play in dockets over and above rate cases where consumer advocates need to show up,” he said.

The commission is required to issue a report on the intervenor law to the Legislature by July 2025.

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More Minnesota cities are turning to utility customers to fund climate and sustainability projects.

The Twin Cities suburb of Eagan is among the latest municipalities to begin collecting what’s known as a “franchise fee” from gas and electric companies in exchange for allowing pipelines, power lines and other infrastructure in public rights-of-way. The charges are typically passed on to customers in the form of a small monthly line item on their utility bills.

As is the case with a growing number of cities, Eagan leaders last year decided to dedicate funds from its franchise fees toward its climate and sustainability efforts. It hired its first sustainability coordinator and is drafting a climate action plan that will be implemented in part with the expected $1.5 million in annual franchise fee revenue.

“It’s hard to launch a sustainability initiative without a way to sustain it,” said Gillian Catano, the city’s sustainability coordinator. “This helps us with long-term planning and allows us to work on projects supporting our operations and to support projects in the community.”

Use of franchise fees growing

Cities have collected franchise fees from public utilities for decades, but today the charges are emerging as a potentially important revenue source to help budget-strapped local governments make progress toward climate targets. In the Twin Cities, Minneapolis has long used the fees to fund sustainability work, and St. Paul is considering a plan to do the same. Other examples include the suburbs of Edina and Hopkins.

“We’ve seen a growing number of cities, across Minnesota and nationally, leveraging utility franchise fees as a tool to fund climate action and sustainability efforts,” said Julia Eagles, associate director of utility and regulatory strategy for the Institute for Market Transformation, a national nonprofit that promotes public policy to reduce building emissions. “It reflects a broader shift towards cities seeking stable, locally controlled funding sources for urgent climate priorities.”

A National Renewable Energy Laboratory research paper in 2021 found over 3,600 municipalities collect franchise fees from their utilities and 13% use part of that money for clean energy-related projects. The work being funded by franchise fees include energy efficiency programs, municipal fleet electrification, solar panel installations, and other clean energy-related investments. 

Abby Finis, a consultant who works with local governments on climate action, said in the past, many cities added the fees into the general fund to pay for various city services. What’s different now, she said, is that more communities are tying them to sustainability staff and projects.

“The franchise fee is something that’s already set up, and you can increase it a little bit without hurting people’s wallets too much,” Finis said.

However, Finis cautioned that the money doesn’t “get anywhere near the amount needed to reach our goals.”

Sometimes cities are maximizing those dollars by using them to leverage additional funds, such as through the federal Inflation Reduction Act or Minnesota’s ECO (Energy Conservation and Optimization) Act, she said.

How other cities are using funds

Minneapolis uses its franchise fees to fund a unique partnership between the city and utilities Xcel Energy and CenterPoint Energy. The National Renewable Energy Laboratory’s research highlighted the partnership, which was intended to accelerate progress toward the city’s climate goals but has faced questions about its effectiveness. The city increased its franchise fee in 2023, a per-household increase of about $12 per year, according to Patrick Hanlon, the city’s deputy coordinator for sustainability. 

“It was a pretty minimal increase for residential customers,” Hanlon said. Projects funded partly by franchise fees have saved city residents more than $150 million annually in energy costs and helped weatherize more than 5,000 low-income units, he added. 

Hanlon is also mayor of the nearby suburb of Hopkins, which recently started using its franchise fees to pay for solar, e-bike and electric vehicle charging initiatives.

St. Paul Mayor Melvin Carter recently proposed charging residential franchise fees to fund weatherization, tree planting, and pay the salary of a new climate action coordinator.

In the past, St. Paul’s climate action budget has come from general funds and grants. 

“This would be the first uniquely dedicated funding for the city’s broad portfolio of climate work,” said Russ Stark, the city’s chief resilience officer.

Edina began using franchise fees for clean energy projects in 2015. Today, according to sustainability manager Marisa Bayer, the suburb receives about $950,000 annually from franchise fees, most of which is invested in city operations to improve efficiency, add renewable energy, and electrify municipal buildings and transportation. The money also funds a sustainable building ordinance and other policy measures.

“The great thing is that because we have this dedicated funding source, we can move forward with projects, either identified in our capital improvement plans or supported by our community,” Bayer said. “We don’t have to go to council every year or rely solely on grants to help fund this work.”

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This story originally appeared at Energy News Network.

Minnesota clean energy and economic development officials say a Canadian solar manufacturer’s planned expansion in the state shows the impact of federal climate incentives for domestic production. 

Pete Wyckoff, assistant commissioner of federal and state initiatives for the Minnesota Department of Commerce, said Heliene’s announcement that it plans to onshore solar cell manufacturing in partnership with an Indian supplier shows the Inflation Reduction Act “is doing what it is designed to do, which is to provide incentives to encourage every step in the solar manufacturing process to occur domestically.” 

In late July, Heliene said it had reached a joint venture agreement with Premier Energies, India’s second-largest solar cell manufacturing company, to build a solar cell manufacturing facility somewhere in the Twin Cities. Heliene also has a plant in northern Minnesota, where it assembles solar panel modules using imported cells from Premier Energies.

Several U.S. factories assemble solar panel modules — think of the rectangular boxes you’d see installed on a rooftop. Almost all of these domestic manufacturers, though, depend on imported solar cells — the half-foot square slices of silicon that actually do the work of converting sunlight to electricity.  

The Inflation Reduction Act prompted a flurry of announcements related to domestic solar cell production, but its viability here remains unclear, Renewable Energy World recently reported. Multiple companies have already retracted plans for U.S. solar cell factories, citing market challenges.

Meeting installer demands

Heliene CEO Martin Pochtaruk said its planned solar cell plant is meant to meet clients’ demand for modules with higher levels of domestic content, which allow project developers to claim more lucrative incentives. After solar owners receive a standard 30% tax credit for projects, they can add another 10% by using modules with equipment made in the United States.

“Strong solar cell manufacturing offers solar developers a higher percentage of U.S.-made domestic content components for their projects, reduces reliance on imports, and releases stress on our supply chain,” Pochtaruk said.

He said working with Premier on establishing an American beachhead that could employ more than 200 workers makes sense because the Inflation Reduction Act rewards solar panels made primarily with parts made in the U.S. solar cells.

Solar developers must use panels with a domestic content of 40% or more for the bonus, and the threshold will increase to 55% in 2026. 

In August, Heliene agreed to a multi-year contract with NorSun to supply low-carbon wafers — one of the building blocks of solar cells — for all the company’s solar panels starting in 2026. 

Heliene has also announced a partnership with UGE, a community and commercial solar and battery storage developer, to provide panels that meet the requirements of the Domestic Content Investment Tax Credit (ITC) Bonus. 

Heliene said in a press release that it would manage construction, finances, supply chain logistics, regulatory oversight, and human resources. Premier will provide cell technology engineering, manufacturing expertise, supply-side agreements, and raw material vendor relationships.  

Pochtaruk said Heliene’s commitment to buy material from Premier Energies and NorSun was instrumental in their ability to finance the new factories. He asked both to try to open in 2026 when the content bonus requires more American-made content.

Jeremy Kalin, a Minneapolis attorney who works with several solar developers, said his clients are seeking panel suppliers with enough content to take the additional 10% tax credit. Manufacturers must provide a guarantee that the panels reach the threshold of having at least 55% of the panels’ components American-made. 

“Once they meet that requirement, they will see a flood of business,” Kalin said.

Could Minnesota be a solar manufacturing center?

Minnesota Solar Energy Industries Association business development and communications director Abbi Morgan said the company’s presence “is huge and something we’re excited about because Minnesota is often overlooked when it comes to clean energy.”

So far, though, Heliene’s Minnesota operations have yet to attract other solar manufacturers. Morgan said one of the association’s members, a German firm, opened a factory in Arizona. At least among the association’s more than 170 members, plenty have expressed interest in buying panels from Heliene.

“There are a lot of members who ask about Heliene, but we’ve heard they have a long waiting list even though they expanded their factory in Mountain Iron,” Morgan said.

After securing a $3.5 million state loan package in 2018, Heliene began manufacturing and assembling panels in a once-shuttered solar module plant in Mountain Iron. The former plant, Silicon Energy, failed despite state investments of millions of dollars.

The plant is in a business park created to attract green energy companies across the street from a taconite mine. Two years ago, the company spent $21 million to triple the production space through an addition to the plant. Heliene spent $9.5 million to pay for the expansion and received most of the rest through state loans and a county grant.

Now, the company has shifted attention to adding capacity in central Minnesota, where it will begin developing two solar module manufacturing lines in an existing 227,000-square-foot warehouse in Rogers, a burgeoning exurb northwest of Minneapolis.

Before preparing the warehouse for solar production, Heliene is waiting to hear whether the project will receive money from the Minnesota Investment Fund (MIF) and Job Creation Fund (JCF). State officials were expected to make an announcement in September.

Rogers Community Development Director Brett Angell said Heliene will fit into the city’s growing reputation as a hub for sustainable enterprises. The company plans to employ at least 180 people and spend $16 million on building improvements and equipment.

“Additionally, (Heliene) would continue to add to the growing segment of sustainable manufacturers within the community as the city currently is home to multiple plastic recycling companies,” Angell said.

Heliene has not selected a site for the solar cell manufacturing plant or provided details on how much investment and employment it will create. Pochtaruk said the building will be significantly larger than the solar module plant.

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This story originally ran on the Energy News Network.

Construction is underway in St. Paul on a major affordable housing development that will combine solar, geothermal and all-electric appliances to create one of the region’s largest net-zero communities.

Twin Cities Habitat for Humanity broke ground in June on a four-block, 147-unit project on the site of a former golf course that’s being redeveloped by the city and its port authority, which made the decision to forgo gas hookups. 

Affordable housing and Habitat for Humanity builds in particular have become a front line in the fight over the future of gas. The organization has faced criticism in other communities for accepting fossil fuel industry money and partnering with utilities on “net-zero” homes that include gas appliances. It’s also built several all-electric projects using advanced sustainable construction methods and materials.

The scale of the Twin Cities project is what makes it exciting, according to St. Paul’s chief resilience officer Russ Stark. 

“We’ve had plenty of motivated folks build their own all-electric homes, but they’re one-offs,” he said. “There haven’t been many, if any, at scale.”

Stark added that the project, known as The Heights, was made possible by the federal Inflation Reduction Act. 

“I think it’s fair to say that those pieces couldn’t have all come together without either a much bigger public investment or the Inflation Reduction Act, which ended up being that big public investment,” he said.

A vision emerges

Port Authority President and CEO Todd Hurley said his organization bought the property in 2019 from the Steamfitters Pipefitters Local 455, which maintained it as a golf course until 2017. When no private buyers expressed interest in the property, the Port Authority bought it for $10 million.

Hurley said the Port Authority saw potential for light industrial development and had the experience necessary to deal with mercury pollution from a fungicide the golf course staff sprayed to kill weeds.

“We are a land developer, a brownfield land developer, and one of our missions is to add jobs and tax base around the creation of light industrial jobs,” Hurley said.

The Port Authority worked with the city’s planning department on a master plan that included housing, and it solicited developers to build a mix of market-rate, affordable and low-income units. The housing parcels were eventually sold for $20 million to a private developer, Sherman Associates, which partnered with Habitat and JO Companies, a Black-owned affordable and multi-family housing developer.

“Early on, we identified a very high goal of (becoming) a net zero community,” Hurley said. “Everything we have been working on has been steering towards getting to net zero.”

Twin Cities Habitat President and former St. Paul mayor Chris Coleman said the project met his organization’s strategic plan, which calls for building bigger developments instead of its traditional practice of infilling smaller lots with single-family homes and duplexes. The project will be the largest the organization has ever built in the Twin Cities.

Coleman said the Heights offered an opportunity to fill a need in one of St. Paul’s most diverse and economically challenged neighborhoods and “be part of the biggest investment in the East Side in over 100 years.”

The requirement for all-electric homes merged with Habitat’s goal of constructing more efficient and sustainable homes to drive down utility costs for homeowners, he said. Habitat built solar-ready homes and sees the solar shingles on its homes in The Heights as a potential avenue to producing onsite clean energy.

Zeroing in on net zero

Mike Robertson, a Habitat program manager working on the project, said the organization worked with teams from the Minneapolis-based Center for Energy and Environment on energy modeling.

“The Heights is the first time that we’ve dived into doing an all-electric at scale,” Roberston said. “We have confidence that these houses will perform how they were modeled.”

Habitat plans to build the development to meet the Zero Energy Ready Home Program standards developed by the U.S. Department of Energy. Habitat will use Xcel Energy’s utility rebate and efficiency programs to achieve the highest efficiency and go above and beyond Habitat’s typical home standards.

The improved construction only adds a few thousand dollars to the overall costs and unlocks federal government incentives to help pay for upgrades, he said.

The nonprofit will receive free or reduced-cost products from Andersen Windows & Doors and other manufacturers. GAF Energy LLC, a solar roofing company, will donate solar shingles for over 40 homes and roofing materials. On-site solar will help bring down energy bills for homeowners, he said.

Chad Dipman, Habitat land development director, said the solar shingles should cover between half and 60% of the electricity the homes need. Habitat plans to use Xcel Energy incentive programs to help pay for additional solar shingles needed beyond those donated. 

Habitat will install electric resistance heating technology into air handlers to serve as backup heat for extremely cold days. Dipman said that the air source heat pumps will also provide air conditioning, a feature not available in most Habitat properties in Minnesota.  

Phil Anderson, new homes manager at the Center for Energy and Environment, has worked with Habitat on the project. He said the key to reducing the cost of heating and cooling electric homes is a well-insulated, tight envelope and high-performance windows. Habitat will build on its experience with constructing tight homes over the past decade, he said.

“Overall, the houses that we’ve been part of over the last almost ten years have been very tight homes,” Anderson said. “There’s just not a lot of air escaping.”

Habitat’s national office selected The Heights as this year’s Jimmy & Rosalynn Carter Work Project, named after the former president and his wife, two of Habitat’s most famous supporters. The work project begins September 29^th and will receive as visitors Garth Brooks and Trisha Yearwood, who now host the Carters’ program.

Robertson said thousands of volunteers from around the country and the world will help put up the homes. The Heights project “raises a lot of awareness for Habitat and specifically for this development and the decarbonization efforts that we’re putting into it,” he said.

The Heights’s two other housing developers continue raising capital for their projects and hope to break ground by next summer. Habitat believes the project will meet its 2030 completion deadline.

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The “solar-coaster” is about to get a little smoother for Minnesota solar installers.

State lawmakers this spring extended funding for a rooftop solar rebate program through 2035, bucking a trend of two-year renewals that caused uncertainty for installers every couple of years.

Solar industry leaders say the additional financial certainty will help companies invest in longer-term marketing and outreach, particularly for reaching lower-income customers.

Since 2014, Solar Rewards has helped more than 8,000 residential and small business customers pay for solar installations in Xcel Energy’s territory. The program is managed by the utility, but the legislature controls its budget, which has ranged between $5 million and $15 million annually. The money comes from yearly fees the state collects from Xcel in return for allowing it to store nuclear waste at two power plants.  

Logan O’Grady, executive director of the Minnesota Solar Energy Industries Association, said the extension represents a compromise — and a victory — after failed attempts to convince lawmakers to increase the program’s funding. Funding has rarely stayed the same two years in a row. Installers have struggled with planning because they did not know if the rebates would be renewed. 

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“It creates the inability to plan for what you’ll be getting year to year,” O’Grady said. “You get through a two-year cycle, and then there might be nothing.”

Uncertainty about the rebate’s future has been challenging to communicate to customers. O’Grady said installers could not make promises in some years because they did not know if the program would continue. Now, even if funding runs out for the year, companies will be able to confidently tell customers that it will be available next year.

He said the extension also will help installers work with low- and moderate-income Solar Rewards customers. In 2023, the Legislature significantly modified Solar Rewards by allocating half the money for low-income participants while increasing subsidies for those projects.

Bobby King, Minnesota director of Solar United Neighbors, said connecting to organizations working with low-income households has taken a few years. The extension gives him the confidence to continue the work.

“You need the program to be consistent if you’re going to continue to grow a program to help folks get low-income solar,” he said. “We can be confident about bringing more resources to staff a (low-income) program.”

All Energy Solar CEO Michael Allen said the Solar Rewards extension “provides you a little bit more confidence” but “still doesn’t take away the real costs of having to market and to sell, design and build projects for this market segment.” He estimated that it can cost as much as 10 times more to recruit and sell to income-qualified customers because of the relationship building, education, financing and sometimes structural issues that need to be addressed.

The Solar Rewards budget over the 10-year extension will be a bit more than half of what the program received from 2014 to 2025. He worries the subsidies will slow rooftop solar, which needs to expand to meet the state’s climate goal of net zero emissions by 2050.

Martin Morud, CEO and owner of TruNorth Solar, said he prefers stable funding that allows his business time to develop relationships with community organizations that work with income-qualified customers. He said TruNorth Solar has worked on income-qualified projects involving food shelves and transitional and low-income housing through Solar Rewards and other programs. 

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Cooperative Energy Futures had begun using Solar Rewards for residential projects over the past two years after primarily building community solar projects with many low- and moderate-income subscribers.

Pouya Najmaie, its policy and regulatory director, said the nonprofit recently hired an employee to focus on income-qualified projects. The Solar Rewards extension will help the nonprofit maintain that position and potentially add another if demand grows.

The Solar Rewards bill was part of a 1,430-page omnibus bill that Gov. Tim Walz signed into law in late May. Rep. Patty Acomb, House of Representatives Climate and Energy Finance and Policy Committee Chair, said lawmakers supporting Solar Rewards worried that the program could have ended in 2025 if the Democratic-dominated Legislature changed hands.

“Fifty million dollars, or $5 million a year, is better than zero,” she said. “I think that having programs like this is a signal to the industry that there is support from the state.”

This article first appeared on Energy News Network and is republished here under a Creative Commons license.

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The recent expansion of a groundbreaking transportation law in Minnesota means all major highway projects in the state will soon be scrutinized for their impact on climate emissions.

A year ago, the state legislature made headlines with a new law requiring the state transportation department and the Twin Cities’ regional planning agency to begin assessing whether highway expansion projects are consistent with state climate goals, including Minnesota’s aim for 20% reduction in driving by 2050.

A follow-up bill passed this spring expands the 2023 law to include all major highway projects statewide that exceed a $15 million budget in the Twin Cities or $5 million outside the metro, regardless of whether or not they would add new driving lanes. The updated legislation also established a technical advisory committee and a state fund to recommend and help pay for mitigation projects.

“It allows for some evolution of the law,” said Sam Rockwell, executive director of Move Minnesota, a nonprofit advocacy group that supported the legislation. “There’s more flexibility.”

The law requires transportation project planners to offset projected increases in greenhouse gas emissions and vehicle miles traveled to qualify for state or federal highway dollars. Those mitigation efforts might include incorporating funding for transit, bicycle or pedestrian programs or environmental restoration projects.

‘A waterfall effect’

Altogether, the law will now cover more than 12,000 miles of state trunk highways that account for more than 60% of all miles driven in the state. One high-profile project that may not have been covered under the initial law is the upcoming reconstruction of Interstate 94 between Minneapolis and St. Paul, which will now need to account for climate impacts.

The changes come as advocates and officials seek solutions to reverse the continued growth of transportation emissions, which surpassed electricity generation almost a decade ago as the state’s largest source of greenhouse gas emissions and are a major reason why Minnesota is not on track to meet its climate goals. 

A disconnect has long existed between even progressive states’ climate goals and the status quo of highway construction, which has long focused on maximizing efficiency for drivers. The new Minnesota law is an attempt to integrate climate action into state and local transportation planning, and to recognize that electric vehicles alone won’t be enough to achieve climate targets. 

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Under the law, the Twin Cities’ regional planning agency, the Metropolitan Council, must include strategies for reducing greenhouse gas emissions and vehicle miles driven in its next 25-year regional plan in 2026. All metro area communities will then use that plan as the basis for their local comprehensive plans, which are due to the regional council in 2028. 

“It’s a waterfall effect here,” Rockwell said.

The Met Council’s last planning document, Thrive 2040, already outlined a focus on multimodal travel options, encouraging walking and biking options while setting a goal of decreasing vehicle miles traveled per capita by 20% by 2050, in line with the state’s official goal.

Conversations already underway

Many metro area communities are already having conversations about how to reduce dependency on driving. Abby Finis, a consultant who has helped several communities draft climate action plans, said reducing driving can bring broader benefits than simply focusing on electric vehicles.

“It offers more active lifestyles, more opportunities to incorporate nature, and has less impact on natural resources needed for electric vehicles,” she said.

Most communities focus on increasing the ability of residents to walk and bicycle for short trips by adding bike lanes, pedestrian islands and safer crosswalks, she said. Some cities see telecommuting and co-working spaces as options for reducing commutes.

But transforming the suburbs will be challenging, Finis said. Sustaining transit service often requires denser development, which continues to be politically controversial in many communities. 

“I have yet to see any community push hard on those strategies in a way that meets what is necessary to reduce [vehicle miles traveled] and adapt to climate change,” Finis said.

For example, Minnetonka, a western suburb of Minneapolis with more than 52,000 residents, boasts a considerable bicycling community. But transit ridership is low except for a modest ridership at the regional mall, one commercial development area, and park-and-ride lots, said Minnetonka’s Community Development Director Julie Wischnack.

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Developed in the 1950s and 1960s, Minnetonka’s current land use is a barrier to fixed route transit. But the city is among a collection of suburbs along Interstate 494 that has been pushing for transit and other commuting options, including telework.

Another member of that commission, Bloomington, faces many of the same challenges. The city has a few dense neighborhoods near transit stops and the Mall of America, but much of the community remains single-family homes and small apartments. A recent report Bloomington commissioned on transportation found that 75% of trips by residents were more than 10 miles. 

Transit, biking, and other modes could replace trips that are less than 10 miles, said Bloomington Sustainability Coordinator Emma Struss. A recent city transportation study suggested several strategies to decrease driving, including transit-oriented development, free bus and rail passes, bike parking, subsidized e-bikes and more transit. Removing barriers to walking and biking were highlighted.

“We’re hearing more and more from residents that they want safe ways to get around the community without needing to take a car,” Struss said.

Similar challenges in larger cities

St. Paul has made changes to create denser neighborhoods, including removing parking minimums for new development and letting up-to-four-unit complexes be built in single-family neighborhoods. The biggest challenge continues to be the spread-out nature of the region, which forces people to drive to suburban jobs and big-box merchants. 

“The fundamental nature of those trips is hard to serve with anything but driving in the car,” said Russ Stark, St. Paul’s chief resilience officer.

Minneapolis has focused less on vehicle miles and more on “mode shift,” or decreasing trips, said the city’s Public Works Director Tim Sexton. The goal is to replace three of five trips by car with walking, biking, or other modes. A city transportation action plan features more than 100 strategies, including creating around 60 mobility hubs where residents can rent e-bikes, scooters or electric vehicles, or take transit.

Patrick Hanlon, the city’s deputy commissioner of sustainability, healthy homes and the environment, pointed out that Minneapolis has one of the country’s best-developed bike networks, which continues to grow. The city’s comprehensive plan drew national attention for removing barriers preventing denser development, which typically leads to fewer transportation emissions. Several transportation corridors now feature bus rapid transit lines.

What Finis described as a “patchwork” of conversations around developments like these are expected to become more comprehensive as the state law’s planning requirements take effect in the coming years.

The legislation has also made Minnesota a national inspiration for other states looking to make progressive changes to highway planning, Rockwell said.

“We know of a number of other states that are looking at trying to replicate parts of this (law), which is great,” he said. “We’ve been on the phone with folks from New York, Michigan, Illinois and Maryland who are trying to bring some pieces of this into their legislative sessions and their legal framework. That’s exciting.”

This article first appeared on Energy News Network and is republished here under a Creative Commons license.

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A coalition of energy equity and justice advocates says Minnesota regulators should consider reinstating a utility shutoff moratorium after a recent academic study revealed racial disparities in disconnections by the state’s largest utility.

Xcel Energy customers in communities of color were more than three times as likely to have their electricity involuntarily disconnected between 2017 and 2021 compared to those in predominantly white neighborhoods, according to the analysis by the University of Minnesota’s Center for Science, Technology and Environmental Policy.

Those racial disparities persisted even after researchers controlled for other factors such as income, ownership status and housing age. 

“We still find consistently that homes that are disconnected are predominantly” in communities of color, said Bhavin Pradhan, a postdoctoral associate and study co-author.

The study’s findings are at at the center of recent comments filed by advocacy groups including the Cooperative Energy Futures, Environmental Law & Policy Center, Sierra Club, and Vote Solar, which asked the Minnesota Public Utilities Commission last month to order a study of the costs and benefits of reinstating the state’s pandemic-era moratorium on utility shutoffs.

“(We) recommend that the Commission order this study now and then rely on it to inform Commission action to consider a moratorium on disconnections until Xcel can develop a more robust set of measures to eliminate racial disparities in disconnections,” the groups wrote in April 12 reply comments (MN 23-452).

Xcel Energy, which had already hired a consultant to review the issues raised in the study, in a March 22 response attributed the racial disparities to “deeply entrenched economic and social reasons that are not driven by the energy system,” including the age of housing stock. It suggested targeting energy efficiency programs at low-income neighborhoods as part of the solution.

The study

The study by Pradhan and associate professor Gabriel Chan looked at utility shutoffs, power outages, and the grid’s capacity for distributed energy by Census block across Xcel Energy’s Minnesota service territory. It also relied on data from the Council on Environmental Quality’s Climate and Economic Justice Screening Tool, which maps disadvantaged communities as defined by federal law.

Xcel’s interactive service quality map allowed researchers to overlay various data at a granular level. “We could link this (data) with a lot of other variables,” Chan said.

In addition to utility shutoffs, the researchers found disparities in reliability, with communities of color almost 50% more likely to experience prolonged power outages than predominantly white areas.

“Across a battery of regression models, we find that living in poorer neighborhoods with a greater concentration of people of color is associated with a statistically and practically significant difference in the likelihood of disconnection from service due to nonpayment and the experience of extended power outages,” the report concludes.

Chan said the research does not necessarily suggest grid planners were intentionally racist. “But we do think that there’s a real opportunity here to think about how to affirmatively plan the distribution grid to address racial disparities that are caused by many other racialized systems.”

The research echoes inequities that have been found for everything from air quality and bike lanes to infant mortality and drownings, in which gaps similarly persist even after controlling for poverty. 

“It would be almost surprising if there weren’t racial disparities” in utility service, Chan said.

Will Kenworthy, Midwest regulatory director for Vote Solar, said the type of racial disparities identified in the study are not unique to Minnesota. 

“What we’re finding in Xcel service territory for reliability is consistent with what we’re seeing in Michigan and Illinois to varying degrees,” Kenworthy said. 

The paper’s conclusion says the findings don’t necessarily imply deliberate racial bias but do highlight an “urgent need for policy interventions to protect low-income customers from disconnections, invest in marginalized communities, and equitably expand distributed energy resources such as solar and batteries.”

How to address disparities

The energy equity and justice advocates, intervening as Grid Equity Commenters, attached the study with comments submitted in March as part of an Xcel Energy integrated resource planning docket. They argued that the disparities, and equity in general, needs to be part of any discussion about the utility’s system planning.

“Racial disparities in shutoffs have been repeatedly shown and the commission needs to do something about it,” said Erica S. McConnell, staff attorney for the Environmental Law & Policy Center. 

Minnesota had a moratorium on utility shutoffs during the Covid-19 pandemic from early 2020 through August 2021. In addition to a study looking at the implications of reinstating that moratorium until racial disparities have been eliminated, the groups’ recommendations include proactive investments in grid reliability and distributed energy in disadvantaged areas.

Fresh Energy, a nonprofit policy advocacy group that also publishes the Energy News Network, separately filed comments on April 12 recommending that the commission require Xcel to track and report additional data regarding shutoffs and reliability in disadvantaged areas.

Utility shutoffs and outages can be scary, costly and “dramatic” for lower-income customers, said George Shardlow, executive director of the Energy CENTs Coalition, which works with Xcel Energy to help connect customers with energy assistance and conservation programs. Energy CENTs is not among the groups intervening in the Xcel planning docket.

Shardlow said targeting all customers in areas of high poverty with assistance programs, even for a limited time, could help reduce disconnections and energy burdens. That approach is in line with a proposed Xcel pilot program to offer automatic bill credits to all customers living within targeted, low-income areas where energy burdens exceed 4% of household incomes.

Xcel’s response

Xcel Energy’s comments framed the disconnection disparities as an issue of poverty. It says it has improved its efforts to avoid disconnections, contacting customers via phone and email for nine weeks to help connect them with assistance programs and offer long-term payment plans before shutting off service.

The company said its own analysis did not find a strong relationship between long-duration outages and the racial composition of the neighborhood. The frequency of long outages is so small, affecting less than 5% of households, and largely reflect the random paths of storms, it said.

“We recognize that even if the likelihood of extended or multiple outages remains small, the impacts of an electrical outage could be greater in disadvantaged neighborhoods that are disproportionately vulnerable to such emergencies,” the company said.

While equity and environmental justice are priorities for the company, Xcel said, it also pushed back on the discussions’ inclusion in the integrated resource planning docket, arguing that would duplicate conversations already happening elsewhere.

A silver lining in the study

One surprising finding in the study could also point to potential solutions. In parts of Xcel’s territory, interconnecting distributed energy resources such as solar or batteries has become challenging due to congestion.

“This doesn’t look like an issue for low-income” areas, Pradhan said. “That’s a good point for energy poverty and energy equity” as solar installations could help reduce utility bills and stabilize the grid to reduce outages.

Minnesota Public Utilities Commission staff has tentatively scheduled a meeting to discuss Xcel Energy’s equity analysis with stakeholders in July.

Editor’s note: Fresh Energy staff, board members and funders do not have access to or oversight of the Energy News Network’s editorial process. More about the relationship with Fresh Energy can be found in the Energy News Network’s code of ethics.

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