Purpose

• Establish and strengthen energy conservation requirements and programs for low-income households served by various electric utilities in Minnesota.
• Create new funding mechanisms and accounts to support low-income energy conservation efforts, and expand or modify rules around weatherization and preweatherization activities.
• Provide a framework for evaluating utility plans, allocating resources, and ensuring targeted assistance reaches eligible low-income residents, including renters and multifamily buildings.

Main Provisions

• Spending requirements for low-income programs

  • Municipal utilities (furnishing natural gas) must spend at least 0.2% of their most recent three-year average gross operating revenue from residential customers in Minnesota on energy conservation programs for low-income households.
  • Consumer-owned electric utilities (COUs) must spend at least 0.2% of their gross operating revenue from residential Minnesota customers on low-income energy conservation programs. This applies to COUs as a whole and to the aggregate of generation and transmission cooperative associations’ member distribution cooperatives’ residential revenue.
  • Utilities may meet all or part of these spending requirements by contributing to the Energy and Conservation Account.

• Energy and Conservation Account

  • An Energy and Conservation Account is established to fund low-income energy conservation programs.
  • Utilities must provide an energy conservation optimization plan that states how much they will contribute to the Energy and Conservation Account each year.
  • Money from the Account may be used to fund low-income programs serving households (including renters) in the utility’s service area.
  • Contributions must be sent to the commissioner by February 1 each year.
  • The commissioner must establish energy conservation programs for low-income households funded through these contributions and must consult with subdivisions, utilities, and nonprofit/community organizations (including weatherization assistance providers).

• Program administration and oversight

  • The commissioner must record and report expenditures and the resulting energy savings from these programs in reporting associated with the Energy and Conservation account.
  • The commissioner may contract with political subdivisions, nonprofits, community organizations, public utilities, municipalities, or COUs to implement low-income programs funded through the Account.
  • The commissioner may modify required spending if a COU and the commissioner could not expend the required amount for three consecutive years.

• Eligibility and guidelines

  • The commissioner must develop guidelines to determine which multifamily buildings can participate in low-income energy conservation programs. The guidelines may use the most recent published guidelines and must be reviewed by a stakeholder group at least every five years.
  • The stakeholder group must include representatives from public utilities, municipal electric/gas utilities, electric cooperative associations, multifamily housing owners/developers, and low-income advocates.

• Preweatherization and Healthy AIR options

  • Up to 15% of a COU’s spending on low-income programs may be used for preweatherization measures.
  • A COU may not count savings from preweatherization toward its energy savings goal.
  • The commissioner must, by March 15, 2022, establish a list of eligible preweatherization measures.
  • An optional Healthy AIR Asbestos Insulation Removal account is created in the state treasury. COUs may contribute to this separate fund to provide preweatherization for households eligible for weatherization assistance.
  • Money in the Healthy AIR account is appropriated to pay for Healthy AIR activities and can be counted toward meeting the minimum spending requirement and toward the cap on preweatherization.

• Weatherization, heating, and fuelswitching

  • For COUs serving low-income households whose primary heating fuel is not provided by a public utility, spending on space and water heating energy efficiency improvements and fuelswitching may be applied to the COU’s low-income spending requirement, when possible offering these services in conjunction with weatherization services.
  • Spending on efficient fuelswitching improvements may be applied to the COU’s low-income conservation spending requirement.

• Weatherization coordination

  • Remediation activities should be carried out in conjunction with federal weatherization assistance program services.

Significant Changes to Existing Law (What’s New)

• Introduces a dedicated funding mechanism (Energy and Conservation Account) for low-income energy programs, with annual reporting and the possibility of contracting outside entities to implement programs.
• Establishes explicit 0.2% spending requirements for both municipal utilities and consumer-owned electric utilities to fund low-income energy conservation efforts.
• Creates new or expanded pathways for preweatherization and weatherization funding (including an optional Healthy AIR account) and clarifies how such measures count toward or are limited in relation to energy savings goals.
• Requires a formal, ongoing process to determine multifamily building eligibility for low-income programs with a stakeholder group and periodic updates.
• Allows fuelswitching and certain heating efficiency services to count toward the spending requirements, broadening the types of measures eligible for funding.

How It Affects Stakeholders

• Low-income households may gain access to more consistent energy conservation programs and weatherization services.
• Utilities will face new spending requirements and reporting obligations, with potential funding flows to the Energy and Conservation Account and the Healthy AIR account.
• Community organizations, public and municipal utilities, and COUs will have opportunities to partner with the state to deliver programs and access funding.
• Multifamily building owners and developers have clearer guidelines and a process to determine eligibility for participation.

Implementation Timeline Highlights

• List of preweatherization measures to be established by March 15, 2022.
• Annual contribution deadlines: by February 1 each year.
• Stakeholder group reviews of multifamily eligibility guidelines at least every five years.

Related Program Goals

• Increase energy savings and participation in low-income energy programs.
• Ensure accountability through reporting of expenditures and energy savings.
• Align weatherization and preweatherization activities with federal programs where possible.

Relevant Terms - energy conservation programs - low-income households - consumer-owned utility (COU) - municipal utility - energy conservation account - energy and conservation account - preweatherization - weatherization assistance - Healthy AIR (Asbestos Insulation Removal) - multifamily buildings - guidelines for eligibility - stakeholder group - energy savings - fuelswitching / efficient fuelswitching - remittance deadline (February 1) - public utility coordination - contracts with subdivisions/nonprofits/community organizations - expenditures and energy savings reporting