Minnesota regulators approve new energy efficiency and electrification pilot projects in Xcel Energy’s gas innovation plan
Fresh Energy applauds Commission for advancing zero-carbon energy efficiency and electrification pilot projects
The Minnesota Public Utilities Commission recently advanced zero-carbon technologies by approving new energy efficiency and electrification pilot projects in Xcel Energy’s Natural Gas Innovation Act (NGIA) portfolio (Docket #23-518).
The Commission approved Xcel Energy’s NGIA portfolio in February 2025 and required that Xcel propose additional pilot projects focused on energy efficiency and electrification with funds that the Commission reallocated. Fresh Energy, in partnership with the Clean Energy Organizations which includes Minnesota Center for Environmental Advocacy and Sierra Club, advocated for approximately $7 million of funding to be reallocated toward electrification and energy efficiency pilot projects instead of Renewable Natural Gas (RNG), hydrogen, and carbon offset projects that were proposed in the innovation plan.
Yesterday’s announcement approves two new electrification and energy efficiency pilot projects proposed by Xcel. The first project will upgrade three to five commercial buildings using commercial air-source heat pumps coupled with thermal energy storage. The other project will upgrade ninety income-qualified customer homes with hydronic heating using air-source heat pumps paired with weatherization and air sealing with no up-front cost. A majority of Xcel’s funding will go toward the latter project to retrofit and electrify low-income residential households with heat pumps.
Fresh Energy applauds Xcel Energy for its thoughtful, forward-looking electrification projects. The projects will ensure Xcel’s NGIA plan prioritizes solutions to meet Minnesota’s greenhouse gas emissions reduction targets, improves public health, helps the most energy-burdened communities, and supports economic benefits for customers.
“These pilot projects will help Minnesota decarbonize how we heat our buildings by reducing climate pollution, improving air quality, and lowering households’ energy burdens,” said Caitlin Eichten, director, building energy transition at Fresh Energy. “We appreciate Xcel Energy’s involvement with us and other stakeholders in developing these important projects, and we look forward to continued work together.”
Passed by the Minnesota Legislature in 2021, the bipartisan Natural Gas Innovation Act provides a pathway for gas utilities to explore alternatives to fossil-based fuels toward lower- or carbon-free resources at the Minnesota Public Utilities Commission. These pilot projects are a part of the first NGIA plan Xcel Energy has filed with the Minnesota Public Utilities Commission.