2014 Legislative Wrap-up
The 2014 Minnesota legislative session was supposed to be quiet for energy issues, following a tumultuous but relatively productive 2013 session that resulted in, among other things, a modest solar requirement for investor owned electric utilities like Xcel Energy, a long-awaited update to the state's net metering program, a requirement for Xcel Energy to initiate a community solar program, a requirement that the state adopt a methodology for valuing solar production on a utility’s system, and legislation proposed by CEE to make energy efficiency the "first fuel," preferred over all other utility resources.
But, under the quiet leadership of the chairs of the House and Senate committees with jurisdiction over energy policy, Rep. Melissa Hortman and Sen. John Marty, the 2014 session turned out to be unexpectedly dynamic. A number of potentially significant legislative initiatives passed, including both of CEE's legislative priorities.
On those two CEE initiatives, we worked with our bill authors, Rep. Hortman and Sen. Scott Dibble, and a broad cross-section of stakeholders, including the environmental community, the MN Chamber of Commerce, Xcel Energy, Otter Tail Power, Minnesota Power, Great River Energy, the Minnesota Rural Electric Association, and the Minnesota Municipal Utilities Association, among others; as well as staff from the Department of Commerce and the MN Public Utilities Commission. We incorporated suggestions and edits from all of these entities to address their concerns and were able to reach broad consensus on both items.
1) On-Bill Repayment authorizes a convenient way for customers to finance energy efficiency improvements and renewable energy projects on customer premises. The provision allows (but does not require) a utility to offer an On-Bill Repayment program to its customers as part of its Conservation Improvement Plan, allowing the payment for financing those improvements to be collected on the customer’s bill. The capital for loans made under this framework would come from third party lenders other than the utility, such as Community Development Financial Institutions (e.g. Greater Minnesota Housing Trust), non-profit providers like the Neighborhood Energy Connection and Center for Energy and Environment, as well as traditional lenders.
Under On-Bill Repayment, the utility collects loan repayments on the customer’s bill, and remits payment to the lender. The idea is primarily to increase the ease and convenience of implementing energy efficiency and renewable energy improvements. Our On-Bill Repayment proposal was designed to be highly protective of ratepayers and consumers. For example:
- Also, the bill provides that customer may not have their utility service shut off for delinquency or default.
- If a loan goes bad, the loan is returned to the lender for collection, not recovered from utility ratepayers.
We expect one or more utilities to incorporate On-Bill Repayment proposals in their CIP filings next year.
2) Long Range Emissions Reduction Planning, which we worked on with Wind on the Wires, requires utilities, as part of their integrated resource plans filed with the Minnesota Public Utilities Commission every two years, to provide a narrative discussion regarding the challenges and alternatives for continuing to reduce greenhouse gas emissions from their systems. All of our utilities have been making good progress toward the state’s greenhouse gas emission reduction target of 80 percent reductions by 2050. However, additional reductions in the future may be more difficult than the ones we’ve achieved thus far, and may require much longer "lead times" to develop than the traditional five- and 15-year scope of integrated resource plans.
Another initiative worthy of mention was a joint proposal of Wind on the Wires and the Minnesota Chamber, authored by Rep. Pat Garafalo and Sen. Julie Rosen, to exempt wind energy generated in Minnesota but sold out of state from Minnesota’s Certificate of Need requirement. This requirement is designed to protect Minnesota ratepayers from having to pay for unneeded energy infrastructure. Since the costs of the exempted projects would not fall on Minnesota ratepayers, requiring a certificate of need for those projects was a costly and unnecessary barrier for wind energy in Minnesota. CEE is a member of both Wind on the Wires and the Minnesota Chamber, and worked closely with them on their proposal.
The Wind on the Wires/Chamber proposal, like CEE’s priorities and a number of other initiatives on electric vehicles, delivered fuels, limitations on service disconnections and others were included in the 2014 Energy Omnibus bill compiled and carried by Rep. Hortman and Sen. Marty, and passed on an overwhelmingly bipartisan basis.
With regard to all of these provisions, we appreciate the time and attention all the stakeholders we’ve worked with have given us on these initiatives and their good faith in helping craft language that works for them. We think this approach resulted in good outcomes and will serve as an example going forward.
Image credit: Dave Wilson and Mary J. I.