One of the few bipartisan bills to emerge from this year’s legislative session could offer more opportunities for businesses and homeowners to invest in green technologies and energy efficiency.
Signed by Governor Tim Walz last week, the Energy Conservation and Optimization Act (ECO) updates the Conservation improvement program (CIP) by allowing a wider range of energy efficiency and heating and cooling options. Utilities will encourage customers to switch from natural gas and propane to less carbon intensive electric heat from air and geothermal heat pumps and other electrical devices.
Utilities can focus more on load management that encourages businesses and consumers to reduce their electricity use during peak demand times or shift consumption to other parts of the day and night. The law also triples the amount of money investor-owned utilities must spend on low-income programs.
The law could be good news for developers and building owners looking to build and operate properties with increased efficiency and lower utility bills. Helping solve the global climate crisis by reducing greenhouse gases offers another attractive and possibly marketable feature for companies.
Gregg Mast, executive director of Clean Energy Economy Minnesota, said the ECO Act “gives consumers and businesses more choice and better control over their energy use. Whether it’s installing more efficient heating and cooling systems, insulating buildings, or managing the load where energy can be used at optimal times throughout the day, this legislation will help Minnesota residents and businesses save more energy and money while supporting tens of thousands of people. local jobs. “
The bill has attracted a surprisingly diverse group of funders. All investor-owned utilities in the state and representatives of consumer-owned utilities such as municipal and electric co-ops testified in favor of the bill. State organizations for clean energy and the environment supported the ECO law, as did unions of electrical and mechanical contractors.
The ECO Act has received support from the Department of Commerce, CenterPoint Energy, Xcel Energy, Minnesota Electrical Association, Minnesota Mechanical Contractors Association, National Electrical Contractors Association, Fresh Energy, Clean Energy Economy Minnesota, Coalition Energy CENTS, Citizens Utility Board of Minnesota, Blue Green Alliance, Sierra Club, Conservation Minnesota, IBEW Local 292 and other unions.
Only a handful of opponents emerged. The Minnesota Propane Association believes the bill will negatively impact sales if consumers switch to electric heat. The Minnesota Chamber of Commerce also opposite the bill, saying switching fuel would result in higher energy costs and that changes could reduce traditional energy conservation programs and practices. However, several members of the chamber approved the ECO law.
Center for Energy and Environment Director of Policy and External Affairs Mike Bull praised the ECO Act’s chief authors, Senator Jason Rarick (R-Pine City) and Representative Zack Stephenson (DFL-Champlin ), for having found common ground between all the companies and organizations affected by the bill. Committee chairs Jamie Long (DFL-Minneapolis) and David Senjem (R-Rochester) also helped the bill succeed by garnering bipartisan support.
Bull believes the bill could open the door to more meaningful innovation and faster greenhouse gas reduction, the state’s ultimate goal, balancing what has worked over the program’s four decades. with what the future may hold for us.
Rallying the coalition became imperative after the 2015 legislative session, when the House passed a bill to repeal the CIP. Bull and other efficiency advocates began work on expanding the CIP following the “wake-up call” from lawmakers. The result has something for everyone.
“We didn’t have to give up the kind of energy conservation success we’ve achieved forever,” said Bull. “This allows for innovation that will create more jobs and allow more creativity in the program.”
Managed by the Department of Commerce, the nation’s premier CIP program is tasked with saving Minnesotans $ 6 billion over the past 20 years and helping to create more than 45,000 jobs for entrepreneurs in the state. . Supporters believe the law will add to this total since energy conservation work is local in nature. Estimates show that every dollar spent by the CIP produces $ 3.75 in profit.
The program was last updated in the Next Generation Energy Act of 2007. Funded by taxpayers, the CIP requires electric utilities to reduce average retail sales by 1.5% and spend less. minus 1.5% of their gross annual operating income. Gas utilities have less aggressive goals.
ECO Act removes spending requirements while slightly increasing energy savings to 1.75% for investor-owned utilities. The 1.5% standard remains for consumer-owned utilities.
Former state lawmaker Jeremy Kalin, now a lawyer at Avisen, was the House’s chief author of the 2007 CIP legislation that increased the level of energy savings required by utilities. The ECO law goes even further by modernizing it for a new energy era.
“We left a lot of efficient energy savings on the table because we couldn’t get political consensus,” Kalin said. “This year’s ECO law continues to enable utilities and businesses to use energy more efficiently in all areas and reduce carbon emissions.”
Darrick Moe, president and CEO of the Minnesota Rural Electric Association, said a significant change was to remove the spending requirement. Meeting the spending target became more difficult because the program limited what utilities could offer residential customers – essentially by updating lighting to LED and discounts on appliances.
With the ECO law, the opportunities to serve residential and commercial customers with electrical options will increase. The objective now with the new ECO law is to reduce costs, carbon and total energy. It can be air-source heat pumps, charging stations for geothermal or electric cars. “He has to have this trio of benefits” to be eligible for the IPC, he said.
Isabel Ricker, Policy Associate at Fresh Energy, said demand response agreements are the norm between utilities and large corporations today. But they are rarely used except in times of crisis. With more sophisticated smart energy management tools, these programs could be better suited to get commercial customers to consume electricity outside of office hours, allowing for greater integration of renewables and less investment. in power plants to meet short-term demand, Ricker said.
Supporters of the legislation, including the two authors, believe it could boost job growth in manufacturing and contracting industries. Lawmakers supporting the law have often pointed out that Minnesota serves as the home of several large companies offering energy conservation products and services as part of their operations, including Trane, Daikin, 75F, 3M, Honeywell, and Andersen Windows. .
Andy Snope, legislative and policy director of the electricians union IBEW 292, said the ECO law could create more jobs. For trades and companies that do electrical work, this is really the work we do, ”he said. “Energy efficiency – whether it’s replacing fluorescent tubes with LED fixtures or converting heat sources to gas through air-source heat pumps – is electrical work and it’s our bread and butter. our butter. “
Jim Douglas, vice president of energy consulting firm Willdan in Minnetonka, said the law will allow “owners, developers and designers to assess truly optimal combinations of energy efficiency, solutions and fuel source in order to ‘achieve operational objectives’. He imagines developers, for example, deploying a mix of electric air-source heat pumps and natural gas heaters that reduce overall emissions in a new building.
Bull of the EWC said the ECO law represents a sort of achievement in a ‘purple’ state, bridging the rural-urban divide, bringing unions, environmentalists and businesses together in a rare deal on a piece of legislation that comes in at some point. fundamental crisis. change in the country’s energy infrastructure.
Wind and solar investments dominate the energy landscape. State utilities appeared poised to go beyond obtaining more than half of their energy from renewables over the next several years. However, the conservation improvement program recalls that reducing consumption accelerates the transition to a much cleaner energy network.
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