Electric cooperative leaders in Minnesota are working to update an energy conservation law to recognize beneficial electrification and give consumers more choices.
The state’s current Conservation Improvement Program (CIP), in place since 2007, requires that co-ops and other electric utilities spend at least 1.5% of their annual revenue to reduce their electricity sales by at least 1.5% each year. Lawmakers saw this as a means to boost energy efficiency and reduce emissions.
But the program effectively discourages co-ops from offering incentives for consumers to switch to efficient electric water heaters, air source heat pumps or even electric vehicles because any increase in energy sales would count against a utility.
“Co-ops in Minnesota are working to modernize the program,” said Joyce Peppin, director of government affairs and general counsel for the Minnesota Rural Electric Association in Maple Grove. “Allowing utilities to count efficient fuel-switching programs, such as electric storage water heater programs or electric vehicle incentives, to their CIP goals would be a win for everyone. It would help co-ops reach their energy savings goal, but it would also help clean the grid, be more efficient, and would save consumers money.”
Beneficial electrification calls for using electricity when doing so would either save consumers money, reduce pollution, boost grid resiliency or improve quality of life.
MREA helped push reform legislation through the state Senate in 2019 but was stymied in the House. This year, the statewide association worked with municipalities and investor-owned utilities to advance the Energy Conservation and Optimization Act of 2020 with a broader support base built through negotiations with key state agencies.
The House passed the bill in May and Gov. Tim Walz, a Democrat, has indicated he would sign it. However, the Senate has not taken up the bill.
“We will work to get it to Senate floor,” Peppin said. “If it does make it to Senate floor, it will pass.” Walz is expected to call special sessions during the remainder of the year, providing opportunities for the bill to advance.
Cathy Cash is a staff writer at NRECA.
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