The Minnesota Legislature’s three-month session ended on Sunday, May 20, 2018 with a stack of bills being sent to Governor Mark Dayton.
Fresh Energy was active at the Capitol throughout the session, working to advance progress on wind and solar, energy efficiency, and beneficial electrification—and working to prevent attempts to weaken foundational energy policy laws. With a commitment to putting progress over politics, Fresh Energy actively strategized with an array of partners, including consumer advocates, agricultural leaders, and clean energy businesses, providing policy analysis of proposed bill language and active coordination around top issues.
As the dust settles, Minnesota has emerged from the session having restored an important financing tool for making homes more energy efficient. State legislators stopped several bad bills before they could pass. Still other provisions, both positive and negative, were combined in large multifaceted bills that, though vetoed by Governor Dayton, help lay the groundwork for future clean energy progress.
Below we summarize the key standalone bills and dissect the largest bills sent to the Governor’s Office—the tax omnibus, bonding omnibus, and the supplemental policy and finance omnibus. Most of the provisions affecting energy are included in the Omnibus Supplemental Finance bill (SF 3656), which—along with the tax bill—Governor Dayton vetoed on May 23, 2018.
Fresh Energy supported the following standalone bill that passed into law:
- Lifting of the moratorium on residential property-assessed clean energy (PACE) in Minnesota. This bill lifts the moratorium on the popular energy efficiency and renewable energy financing program by addressing a number of consumer protection concerns. A 2017 state law enacted the moratorium until a taskforce could assess and recommend changes to the underlying statute language. Fresh Energy was on the taskforce and worked with a coalition of groups to identify concerns and improve the PACE program, as well as improve another financing program within the same bill. An amendment to the bill affects the Minnesota Finance Housing Agency (MHFA), the statewide agency that works with lenders to provide affordable home loans, by expanding the number of eligible project offerings in its loans to include more energy efficient technologies, renewable energy and energy storage systems, and encourages MHFA to coordinate with utilities with on-bill financing repayment. This bill has been signed into law.
Fresh Energy supported the following provisions that were included in earlier versions of the tax bill (since vetoed):
- A provision establishing a process for certifying eligible combined heat-and-power projects should tax credits become available in future legislative sessions. This would have incentivized combined heat and power systems between 1 megawatt and 15 megawatts that reduce emissions by utilizing waste heat—driving big increases in energy efficiency.
- An incentive for mechanical insulation in heating, cooling, and ventilation systems. This provision would have encouraged insulation, which helps systems perform much more efficiently, driving energy and cost savings for the customer and reducing emissions overall.
Fresh Energy supported the following provisions in the supplemental policy and finance omnibus (since vetoed):
- A provision requiring investor-owned utility companies (Xcel Energy, Minnesota Power, and Otter Tail Power) to assess and integrate energy storage systems into their resource planning process. Energy storage is a rapidly growing market and requiring utilities to assess its usefulness would have driven grid modernization and speeded its market adoption. This provision also would have ordered a comprehensive statewide cost-benefit analysis of energy storage by the Department of Commerce, including its ability to improve reliability and reduce emissions.
- Continued funding for the Department of Commerce’s Risk Assessment team as well as support for maintaining and improving data reporting within the Conservation Improvement Program. In recent filings, all three investor owned utilities reported energy efficiency savings of more than 2.2 percent—well over the state goal of 1.5 percent. Supporting energy efficiency helps cut waste and lower costs and we would have been glad to see this funding continue.
Fresh Energy opposed the following supplemental finance omnibus provisions (since vetoed):
- A provision enacting strict rules for using rollover funds from Xcel Energy’s Solar Rewards program, which would have overturned a recent rulemaking decision that ordered and provided funding for Xcel Energy to create the state’s first low income rooftop solar program.
- A provision allowing solar energy systems up to 40 kilowatts to count towards utilities’ small system carve out standard of 1.5 percent of retail sales by 2020. Although this change would have allowed larger solar projects to qualify towards the requirement, this may have resulted in fewer dollars for smaller projects.
- Removal of the financing requirement within the highly popular Community Solar Garden program, which would have thrown significant uncertainty into a program that has brought billions in private investment to Minnesota and expanded access to solar energy for families, communities, and businesses.
- A cap on the total payments by Xcel Energy towards the Renewable Development Account. Instead of paying an annual ‘per-cask fee’ for each of its stored nuclear waste casks, Xcel Energy would have been limited to paying $23 million in 2019, $28 million in 2020, $28 million in 2021, and $20 million in 2020 and thereafter. This would have reduced the total payments by Xcel Energy for storing nuclear waste within the state of Minnesota.
Fresh Energy opposed the additional following bills:
- Strict new rules for using rollover funds from Xcel Energy’s Solar Rewards program, overturning a recent rulemaking decision that ordered Xcel Energy to create the state’s first low income rooftop solar program. This provision was carried in both the policy and finance omnibus, as well as a standalone bill. This bill passed both chambers and was signed by the Governor into law.
- Language that would have granted Xcel Energy an “advanced determination of prudence” option for its nuclear power plants. Though the provision was sold as helping Xcel meet its 85 percent carbon free vision—a vision Fresh Energy strongly supports—the bill really only addressed a small slice of that broad vision. It would have provided greater certainty on billions of dollars of investment for Xcel shareholders without addressing the needs of the workers, community, and the energy system. This bill was opposed by a wide array of business, consumer, and energy groups and never came up for a vote on the House floor.
- A provision that would have crippled Minnesota’s building code by requiring that all rule changes that created at least $1,000 in costs to residential units to go through the legislature, as opposed to the current technical review process. This would have functionally prevented all safety, energy efficiency, and technology improvements from being made to Minnesota’s residential code—creating undue risks and increased costs of living for families who purchase new homes. This bill was included in both the House and Senate omnibus bills but was removed in conference committee.
- A provision limiting the amount of Volkswagen settlement funds that could be spent on administrative expenses to three percent and prohibiting the hiring of additional staff using settlement money. Limited staffing and administrative support would have made it more difficult for small rural cities, schools, and utilities to add electric cars and buses to their fleet. This bill was included in the Senate omnibus but was removed in conference committee.
Lastly, Fresh Energy was watching these bills:
- Prairie Island Indian Community net-zero project funding. This agreement between the Prairie Island Indian Community and Xcel Energy would have provided $40 million in net zero energy grants to Prairie Island. (This provision was included in the supplemental finance omnibus which was vetoed).
- Financial assistance to the many businesses impacted by the closure of the Benson Power biomass facility. The provision would have created a $40 million fund to preserve jobs and compensate eligible businesses impacted by the closure of the plant. This provision was carried in both the policy and finance omnibus, as well as in a standalone bill. (This provision was included in the supplemental finance omnibus which was vetoed)
Fresh Energy provided regular updates throughout the session and we thank everyone who got involved and communicated with their legislators. If you have any questions about the legislation that was passed this year or want to get involved in energy work at the Capitol, please email our team.