Minnesota
State Scorecard Rank
10
Minnesota
32.0Scored out of 50Updated 12/2022
State Government
Score: 6.5 out of 9
State Government Summary List All
Minnesota offers multiple loan programs for energy efficiency investments as well as PACE financing. The state government leads by example by requiring energy-efficient public buildings and fleets, benchmarking energy use, and encouraging the use of energy savings performance contracts. Researched focused on energy efficiency takes place at several institutions in the state.
Financial Incentives List All
The state of Minnesota offers the following financial incentives to encourage energy efficiency improvements:
- Energy Savings Fund for Nonprofits: This program offers up to $100,000 loans at 3.9% interest to 501(c)(3) nonprofits. Additionally, commercial properties owned or occupied by a nonprofit seeking lighting improvements through the One-Stop Efficiency Stop are eligible for up to $25,000 at 0% interest.
- Home Energy Loan Program: Through the Minnesota Housing and Finance Agency, CEE offers low interest home energy loans for Minnesota homeowners to make energy improvements in their homes.
- Farm Opportunity Loan Program: The Farm Opportunity Loan Program is designed to finance the purchase of equipment to add value to crops or livestock, adopt best management practices, reduce agricultural inputs to improve the environment, and increase on-farm energy production. Eligible loan uses do not include expenses related to seed, fertilizer, fuel, or other operating expenses.
- Rev It Up Program: The Community Energy Efficiency & Renewable Energy Loan Program, also known as the “Rev It Up” Program, is a revolving loan program that allows up to $100 million in revenue bonds to be issued for low-cost loans to local units of government, industrial and commercial businesses, or healthcare facilities seeking to finance energy efficiency and/or renewable energy projects. This program is administered by the Minnesota Department of Commerce.
- Energy Savings Partnership Program: A statewide revolving loan program administered by the Saint Paul Port Authority that leverages Minnesota Department of Commerce funds to provide low-cost loans to local units of government and schools that pursue cost-effective energy efficiency and renewable energy projects.
- Green Business Loan Program: This revolving loan program provides low-interest loans to Minnesota businesses seeking financing to install energy retrofits. Loan amounts range from $20,000—$300,000 and funded though the Community Reinvestment Fund, USA by the Minnesota Department of Commerce.
- Trillion BTU
- Home Efficiency Rebate program (HOMES): Minnesota's Home Efficiency Rebates program aims to incentivize energy-saving improvements in homes, offering rebates ranging from $2,000 to $8,000 per home based on achieved energy savings and household income, with a focus on enhancing energy efficiency through measures like insulation, air sealing, and efficient heating and cooling systems for both single-family homes and multifamily buildings. Funding and program are still being developed, expected to disperse funds starting in 2025.
- Residential Heat Pump Rebate: The Minnesota Residential Heat Pump Rebate Program will provide financial assistance to eligible applicants that purchase and install a heat pump for space heating and cooling in the applicants’ Minnesota residence. Heat pumps for clothes drying or water heating are excluded from this state rebate program.
- Home Electrification and Appliance Rebate program: electric alternatives, upgrading electrical services, and purchasing heat pump technologies, electric cooking appliances, and electrical panel/wiring upgrades, with eligibility based on household income, targeting those with incomes less than 150 percent of the area median, and including both existing single-family homes and multifamily buildings, and potentially new homes. Funding and program are still being established, expected to start dispersing funds in 2025
- Air Ventilation Pilot Grants: Program (HVAC Program) is designed to improve the health and safety of school communities, improve energy efficiency and reduce greenhouse gas emissions from base-line HVAC system conditions.
- Residential Electrical Panel Upgrade Grant Program: The Minnesota Residential Electrical Panel Upgrade Grant Program will provide financial assistance to owners of single-family residences and multifamily buildings to upgrade residential electric panels. Program is still under development.
Further financial incentive information can be found in the Database of State Incentives for Renewables and Efficiency (DSIRE Minnesota). In addition to these state-funded incentives, Minnesota has enabled commercial Property Assessed Clean Energy (PACE) financing and has two active programs. For additional information on PACE, visit PACENation.
Last Reviewed: November 2024
Equity Metrics and Workforce DevelopmentList All
A major role in Minnesota’s Climate Action Framework is decreasing energy inequities across Minnesota. One of the goals established in the Framework is to weatherize 25% of residences earning fifty percent or less than the MN median income by 2030. Another goal is to reduce the energy burden so that spending on energy is less than 5% of the income of 80% of Minnesotans.
To help ensure that low-income customers have the opportunity to participate in ECO programs, Minnesota Statutes §216B.241, subd. 7(a) establishes minimum low-income spending requirements for electric and natural gas utilities and associations. E.g. the minimum low-income spending requirement for public (i.e., investor-owned) is equal to 0.4% of gas IOUs’ three-year average residential GOR and 0.2% of electric IOUs’ three-year average residential GOR.
Many ECO low-income programs (most of which by design are intended to exclusively serve the needs of low-income persons) have tended not to be cost-effective, but the Department has historically not held low-income programs to the same cost-effectiveness standards as non-low income programs, and has allowed non-cost-effective low-income programs to be included in utility ECO portfolios recognizing their importance in serving these customers.
The MN Department of Commerce also commissioned a 3-year study to evaluate the effectiveness of low-income program delivery through the conservation improvement program. The study assessed the current performance of the utility LI ECO programs and identified opportunities for increasing the efficiency and effectiveness of those programs. Overall, the study found that the LI ECO is meeting or exceeding most of the statutory and regulatory requirements.
In advance of investor-owned utilities (IOU) filing their 2024-2026 ECO Triennial Plans, the Department worked with Minnesota Energy Efficiency For All (MN EEFA) to host a series of sessions focused on low-income ECO programs. The meetings were designed to give interested parties opportunities to provide feedback on the utilities’ planned low-income programs prior to the utilities submitting their final proposed plans to the Department for formal regulatory review.This process was referred to as “Phase I” of the ECO Low-Income Working Group. Recordings of the Phase I sessions are available on Fresh Energy’s website (https://fresh-energy.org/event/conservation-improvement-program-cip-planning-for-low-income-kick-off). In 2024, the Department is working to establish a permanent ECO Low-Income Working Group to address ECO issues specific to “under-resourced customers, multifamily housing properties, renters, and others currently underserved by energy efficiency programming in Minnesota.
In 2024 Minnesota passed funding for the Department of Commerce to provide technical, policy, and stakeholder engagement assistance to the Tribal Advocacy Council for Energy (TACE). TACE is made up of members from the 11 Tribal Nations whose boarders are within Minnesota. This funding allows the department to work alongside the Tribal Nations in support of energy solutions and requires the hiring of a Tribal liaison. (https://www.revisor.mn.gov/bills/bill.php?b=senate&f=sf4942&ssn=0&y=2024)
Additionally, the Minnesota Department of Commerce has funded several studies to learn how to increase the efficacy of the ECO program, including the following:
Analysis of New or Modified Energy Efficiency Programs to Increase Energy Savings of Underserved Populations: This project engaged underserved, high needs Twin Cities’ communities in a co-creative process to identify their unique barriers to participation in energy efficiency programs and the ways in which they can best be served. The project presents a set of energy efficiency program design best practices for providing culturally responsive energy efficiency services to historically underserved populations: renters, low-income households, and Black, Indigenous and People of Color (BIPOC) in the Twin Cities.
Opportunities for CIP to Support Tribal Food Sovereignty: This project uses the lens and framework of ECO to understand energy issues related to food sovereignty and resilience in Indigenous communities in Minnesota. The project includes a literature review, interviews with Indigenous food producers, and analysis of existing ECO offerings regarding how current ECO offerings can be used to support Indigenous producers. It discusses recommendations developed from the research on how ECO can support both energy savings and non-energy benefits generated through strengthened Tribal food systems.
Engaging Latinx Businesses in Electric Utility Efficiency Programs: The project goals are to:
- understand the implementation rates of commercial energy efficiency utility programs among Latinx-owned businesses in Minnesota;
- identify and document participation barriers;
- assess the potential to improve implementation rates throughout these communities; and
- work with business owners to increase understanding of existing program offerings and opportunities.
Energy Efficiency through the Conservation Improvement Program - Barriers and Opportunities for Native Nations: To better understand the existing barriers and opportunities for Native nations to invest in energy efficiency, this project engaged and collected feedback from each of the 11 Native nations in Minnesota as well as the utilities that serve them. Project goals:
- Identify the specific energy-efficiency needs of Tribal governments and members and the barriers to implementation of needed energy-efficiency improvements.
- Provide specific, actionable recommendations to develop successful ECO opportunities that serve the needs of Tribal governments and members.
Workforce Development
Clean Energy Economy is a prominent voice of Minnesota’s clean energy businesses, including the following sectors: energy efficiency, renewable energies like wind, solar and biomass, clean transportation and energy storage. They work to support and expand clean energy jobs and the economic opportunities They gather clean energy data and share it with lawmakers and the public to craft smart clean energy policies that support a prosperous, low-carbon economy.
The MN Department of Commerce commissioned an independent 2020 study that estimated the net economic impacts of CIP investments made from 2013-2018. The key impacts from CIP’s 2013-2018 program activity years include nearly 48,000 jobs, $11 billion in new economic activity, and a return of $3.75 in societal benefits for each dollar invested. The study's final report is now published.
On December 23, 2020, Xcel Energy (Xcel) filed a program modification request to its 2021-2023 CIP Triennial Plan with the Minnesota Department of Commerce (Department). Xcel requested to add a new indirect impact program called the CIP-Workforce Development and Education Program (CIP-WDE) to its CIP portfolio. The program would recruit, educate, and train participants for jobs in the energy efficiency sector. The program would target recruitment and training efforts specifically towards traditionally underserved communities. The program would be divided into two main offerings: a workforce training and recruitment program and a CIP Scholarship Fund. This program was approved by the Department on April 29, 2021.
Last Reviewed: November 2024
Carbon Pricing PoliciesList All
The State of Minnesota does not yet have carbon pricing policies in place.
The Department of Commerce publishes an annual report on the energy savings and estimated carbon dioxide reductions achieved by energy conservation improvement programs for the two most recent years for which data is available. The historical reports can be accessed here.
Minnesota utilities account for environmental impacts in the Societal Cost test, including SO2, particulates, CO, N2O, lead, and CO2, using environmental cost values approved by the Minnesota Public Utilities Commission. The Department also publishes an annual report on the energy savings and estimated carbon dioxide reductions achieved by energy conservation improvement programs for the two most recent years for which data is available. The historical reports can be accessed here.
Per Minnesota Statue 216H.02, Minnesota does have a statewide emissions reduction goal in place, specifically to reduce emissions 80% by 2050 (baseline year 2005).
Last Reviewed: September 2022
Building Energy Disclosure List All
There is no disclosure policy in place.
Last Reviewed: July 2022
Public Building Requirements List All
Executive Order 05-16 (2005) required state-owned buildings to reduce energy usage by 10% in 2006 and mandated the use of specific energy conservation measures to help the state meet its target. It also required the incorporation of Minnesota Sustainable Guidelines for new construction and the adoption of "prudent energy" procurement strategies.
In May 2008, Minnesota adopted "Sustainable Building 2030" standards designed to achieve energy consumption reductions of 60% in 2010 (2003 baseline), increasing 10% every five years towards an ultimate target of net zero buildings by 2030. Beginning on July 1, 2010, all Minnesota State bonded projects — new and substantially renovated — that had not already started the Schematic Design Phase on August 1, 2009, were required to meet the Minnesota SB 2030 energy standards.
On April 4, 2019, Governor Walz signed Executive Order 19-27, rescinding Executive Orders 18-01 and 17-12. In state-owned buildings, agencies must adopt cost-effective energy efficiency and renewable energy strategies to achieve no less than an aggregate 30% reduction in energy use per square foot by 2027 from a 2017 adjusted baseline, and by pursuing renewable energy strategies that ensure state agencies collectively reduce greenhouse gas emissions by 30% by 2025 from a 2005 calculated baseline.
Currently, the MN B3 Benchmarking program contains over 10,900 public buildings with over 370 million square feet in its database representing 31 State agencies, 682 cities, 69 counties, 58 higher education campuses, and 279 school districts. The B3 Benchmarking system has identified over $66 million in potential energy savings in over 1,400 identified MN public buildings.
Last Reviewed: November 2024
Fleets List All
Minnesota Statutes requires the state to reduce the use of gasoline by on-road vehicles owned by state departments by 25 percent by 2010 and by 50 percent by 2015, and the use of petroleum-based diesel fuel in diesel-fueled vehicles by ten percent by 2010 and 25 percent by 2015, using 2005 as a baseline. Per Executive Order 11-13, Minnesota’s state agency fleet now references the EPA’s Green Vehicle Guide for fuel economy and energy efficiency and requires an agency procuring a vehicle to choose one with a score of 7 or greater for leased vehicles.
Executive Order 19-27 includes updated sustainability goals that state cabinet agencies shall follow to improve their operational practices, including Reduced Fleet Fossil Fuel Consumption that specifies a 30% reduction of State Fleet consumption of fossil fuels by 2027 relative to a 2017 adjusted baseline.
MN DOT has an initiative to convert all state-owned sedans and SUVs to net-zero models by 2030.
Minnesota Statute §16C.135 was modified in 2023 establish a hierarchy for new vehicles purchased by the state that gives preference to electric and hybrid vehicles.
Last Reviewed: November 2024
Energy Savings Performance Contracting List All
In 2011, the state established the Guaranteed Energy Savings Program (GESP), within the Department of Commerce, Division of Energy Resources. GESP provides technical, contractual, and financial assistance to state agencies, local government units, school districts, and institutions of higher learning that elect to implement energy efficiency and renewable energy improvements through Guaranteed Energy Savings Contracts. GESP offers a list of pre-qualified contractors and model contracts. All projects implemented by state facilities must use the Guaranteed Energy Savings Program. Municipals and schools are not required to use GESP, but if they do, they receive Commerce’s technical assistance.
In April 2019, Governor Walz issued Executive Order 19-25 which calls upon state agencies with state-owned buildings to adopt cost-effective energy efficiency and renewable energy strategies to achieve no less than an aggregate 30 percent reduction in energy use per square foot by 2027 from a 2017 adjusted baseline, and by pursuing renewable energy strategies that ensure state agencies collectively reduce greenhouse gas emissions by 30 percent by 2025 from a 2005 calculated baseline. EO 19-25 calls for Commerce to evaluate agency asset preservation lists and the state general obligation bond fund requests for GESP suitability; for state agencies to identify and implement best management practices and cost-effective energy efficiency and renewable energy improvements utilizing any financing mechanism that may be appropriate; for Commerce to work in partnership with state and local government and energy service companies to advance state and local government and school district utilization of energy saving performance contacting; and for Commerce to offer technical assistance for state agencies and local government and school districts that elect to implement energy-saving and renewable energy improvements.
Last Reviewed: July 2020
Research & Development List All
To help achieve the State Energy Conservation Goal on a sustained basis, the Next Generation Energy Act of 2007 (the Act) created a Conservation Applied Research and Development (CARD) Grant Program funded through utility assessments. With a $3.6 million annual budget and over $25.5 million in funded R&D since its establishment, the CARD Program is designed to identify new technologies or strategies to maximize energy savings, improve the effectiveness of energy conservation programs, and document the carbon dioxide reductions from energy conservation projects. The CARD program currently has a portfolio of approximately 90 R&D projects that have leveraged over $6.3 million in matching funds from grantees.
The Center of Diesel Research at the University of Minnesota focuses on the energy-efficiency and environmental impact of internal combustion engines. The Center for Energy and Environment’s Innovation Exchange is a hub for researching, synthesizing and pioneering energy efficiency solutions.
The Center for Energy and Environment is a hub for independent research, analysis and pioneering energy efficiency solutions.
The Center for Sustainable Building Research at the University of Minnesota leads and supports the transformation of the regional built environment to provide for the ecological, economic, and social needs of the present without compromising those of the future. Research areas include guiding and rating systems, housing, life cycle assessment, windows and glazing, design for community resilience, and building evaluation.
Last Reviewed: July 2019
Buildings
Score: 14.5 out of 24
Buildings Summary List All
Minnesota currently has the 2012 IECC in effect for residential construction; as of March 2020, the 2018 IECC is in place for commercial construction. The state offers code training and outreach, and has completed a compliance study.
Residential Codes List All
Minnesota's residential building code is mandatory statewide. The IECC 2012 chapters 2(RE) to 5(RE) and Minnesota amendments were adopted in August 2014 and went into effect February 2015. (Minn. Stat. § 1322.0010). The Minnesota Department of Labor and Industry (DLI) is currently convening a Technical Advisory Group (TAG) to update the Minnesota Residential Energy Code. The TAG has reviewed and has recommended amendments to the 2021 IECC but are considering the 2024 IECC as the basis for the next Minnesota Residential Energy Code and also consider strengthening amendments in light of recent legislation. This next generation code will likely begin enforcement in late 2026 or early 2027.
Beginning in 2026, Minnesota must adopt each new edition of the IECC or a similar more efficient standard. After 2038 any residential energy code must have energy savings of greater than 70 percent using IECC 2006 as a baseline. (Minn. Law §326B.106) Once the 2027 IECC is published, DLI will convene another TAG to review that code and make strengthening amendments.
Last Reviewed: November 2024
Commercial Code List All
Minnesota adopted ASHRAE 90.1-2019 with Minnesota amendments as the commercial energy code, and officially went into effect January 5, 2024. ASHRAE 90.1 sections 1-12, Normative Appendix A, Normative Appendix C, Normative Appendix D, and Addendums a, c, d, g, h, l, q, r, w, af, & da are mandatory statewide.
Effective August 2023 and beginning in 2024, each newly published edition of ASHRAE 90.1--or a similarly stringent code--must be adopted. Legislation also requires that the commercial energy code in place after the year 2036 achieve no less than an 80 percent savings in annual energy cost compared to the 2004 version of ASHRAE 90.1. (Minn. Law §326B.106)
Last reviewed: November 2024
Compliance List All
- Gap Analysis/Strategic Compliance Plan: Minnesota completed a gap analysis in October 2014 with the Building Code Assistance Project.
- Baseline & Updated Compliance Studies: Completed in 2018, the Minnesota Center for Energy Environment conducted a commercial code compliance study. This study is funded by CARD, the State’s R&D program that is funded through utility assessments. The project's materials can be accessed here.
- In early 2018, the MN Department of Commerce commissioned two residential and commercial energy baseline and market characterization studies which were led by Slipstream. The commercial study's final webinar can be accessed here. The residential study's final webinar can be accessed here and the final report can be accessed here.
- Utility Involvement: Utilities were active participants in an ongoing commercial code compliance study led by the Minnesota Center for Energy & Environment and completed in 2018. Utilities have provided input and assistance in determining study design and identifying areas of the code where compliance issues may exist.
- Stakeholder Advisory Group: The Minnesota Energy Code Compliance Collaborative is facilitated in large part by Fresh Energy.
- Training/Outreach: Minnesota funded a pilot program, through the CARD program, to help develop training and outreach for building officials to meet the new codes. The commercial code compliance pilot study was completed in 2018.
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2050 Partners (in partnership with Slipstream, Midwest Energy Efficiency Alliance, and LHB) is developing a Minnesota C&S Roadmap document that aims to:
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Provide the foundation for developing robust Minnesota Codes and Standards (C&S) support programs that contribute to delivering cost-effective energy savings, and
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Recommend pathways for Minnesota utilities to participate in and claim savings from C&S activities.
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Last reviewed: November 2024
CHP
CHP Summary List All
Minnesota has an interconnection standard that applies to CHP and stakeholders have recently completed a strategic process to encourage CHP deployment. No new CHP systems were installed in Minnesota in 2018.
Interconnection StandardsList All
The Minnesota Public Service Commission initiated a new docket to update its interconnection standards in June 2016. The Commission will re-examine the Minnesota Standards for Interconnection of Distributed Generation that were established in September 2004 in Docket E-999/CI-01-1023. On March 8, 2017, the Minnesota Public Utilities Commission (Commission) established a Distributed Generation Workgroup (DG Workgroup) to address updates and revisions to the Minnesota Standards for Interconnection of Distributed Generation established in Docket No. E999/CI-01-1023. The DG Workgroup has held four in-person meetings as well as a number of webinars to discuss possible revisions. The existing standards delineate uniform procedures applicable to all investor-owned utilities, apply to systems up to 10 MW in size, and include CHP systems. Several aspects of the review process are different depending on the size of system.
Last Updated: July 2018
Encouraging CHP as a ResourceList All
CHP in energy efficiency standards: The Next Generation Energy Act (NGEA), passed in 2007, established energy-savings goals through the Conservation Improvement Program (CIP), for electric and natural gas investor-owned utilities in Minnesota. H.F. 729, passed in 2013, modified the definition of “energy conservation improvement” in Minnesota Statutes 2012, section 216B.241 to include topping cycle CHP. More information is available here.
Last Reviewed: July 2019
Deployment IncentivesList All
Net metering: Minnesota's net-metering law, enacted in 1983, applies to all investor-owned utilities, municipal utilities and electric cooperatives. All "qualifying facilities" less than 40 kilowatts (kW) in capacity under the federal Public Utility Regulatory Policy Act of 1978 (PURPA) are eligible. There is no limit on statewide capacity. Each utility must compensate customers for customer net excess generation (NEG) at the "average retail utility energy rate," defined as "the total annual class revenue from sales of electricity minus the annual revenue resulting from fixed charges, divided by the annual class kilowatt-hour sales." This rate is basically the same as a utility's retail rate.
Last Reviewed: July 2019
Additional Supportive PoliciesList All
There are currently some additional supportive policies to encourage renewable-fueled CHP.
With support from the U.S. DOE State Energy Program in 2013, Minnesota conducted a significant stakeholder engagement process that resulted in the development of a CHP Action Plan to help policy makers, utilities, industries, and trade allies increase implementation of CHP in the state. In 2016, the National Association of State Energy Officials (NASEO) published a case study documenting Minnesota's experience that can serve as a model for other states.
Last Updated: July 2018
Utilities
Score: 12 out of 15
Utilities Summary List All
Minnesota has a long record of customer energy efficiency programs offered by both investor-owned and publicly-owned utilities. Minnesota has achieved significant savings from these programs, which have been in place in various forms for well over two decades. These programs and efforts have remained steadfast in Minnesota without any of the interruption or upheavals that occurred in other states that restructured their electric utility industries.
In 2007, the Minnesota Legislature passed the Next Generation Energy Act of 2007, setting up the state's first EERS with energy-saving goals for utilities of 1.5% of retail sales each year. In 2021, the state enacted the Energy Conservation and Optimization (ECO) Act, that strengthened the EERS and expanded the scope of energy-saving measures that can count toward efficiency goals. The new law increased the 1.5% electric savings goal for IOU programs to 1.75%, though it maintains the lower goal for consumer-owned municipal and cooperative utilities. The law also increases the overarching statewide energy savings goal from 1.5% to 2.5% of annual retail sales of electricity and natural gas, which encompasses savings from a wide range of policies in addition to utility programs. These include savings from building energy codes, appliance standards, rate design, and other efforts.
Minnesota allows utilities to earn performance incentives for energy efficiency programs. Minnesota’s regulated utilities are required to file integrated resource plans with the Public Utilities Commission. The plans identify the potential resources the utilities intend to use to meet consumer needs in future years, including significant energy efficiency and conservation savings.
The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.
Customer Energy Efficiency Programs List All
Minnesota's investor-owned utilities and consumer-owned utilities offer a broad portfolio of customer energy efficiency programs. The programs have benefited from long records of consistent, strong support, allowing them to evolve and improve over many years.
Minnesota’s long-running Conservation Improvement Program, (CIP) is a utility-administered program with regulatory oversight provided by the Minnesota Department of Commerce (Commerce). Utility CIP portfolios promote energy-efficient technologies and practices by providing rebates, marketing, and technical assistance to utility customers. Energy conservation programs help Minnesota households and businesses lower their energy costs by using electricity and natural gas more efficiently. Commerce reviews and approves utility CIP regulatory filings to ensure that energy savings are calculated accurately, statutory requirements are met, and programs meet cost-effectiveness standards.
CIP began in Minnesota in the 1980s with the intention of motivating utility spending on energy efficiency. The passage of the 2007 Next Generation Energy Act established Minnesota’s Energy Efficiency Resource Standard (EERS), which required utilities, beginning in 2010, to develop CIP plans to achieve energy savings equal to 1.5% of average annual retail sales each year, unless adjusted by the Commissioner to no less than 1.0%.
On May 25, 2021, the Minnesota Energy Conservation and Optimization Act (ECO Act) was signed into law by Governor Tim Walz. Notable highlights of the ECO Act include: providing participating electric and natural gas utilities the opportunity to optimize energy use and delivery through the inclusion of load management and efficient fuel switching programs ; raising the energy savings goals for the state’s electric investor owned utilities (IOUs); more than doubling the low-income spending requirement for all IOUs; providing greater planning flexibility for participating municipal and cooperative utilities (COUs); and including activities to improve energy efficiency for public schools.
The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.
Last reviewed: November 2024
Energy Efficiency as a Resource List All
On May 25, 2021, the Minnesota Energy Conservation and Optimization Act (ECO Act) was signed into law by Governor Tim Walz. The ECO Act primarily serves to modernize CIP to provide a more holistic approach to energy efficiency programming. The ECO Act was the result of multiple years of stakeholder discussion and development. Notable highlights of the ECO Act include: providing participating electric and natural gas utilities the opportunity to optimize energy use and delivery through the inclusion of load management and efficient fuel switching programs ; raising the energy savings goals for the state’s electric investor owned utilities (IOUs); more than doubling the low-income spending requirement for all IOUs; providing greater planning flexibility for participating municipal and cooperative utilities (COUs); and including activities to improve energy efficiency for public schools. Minnesota’s EERS remains one of the most productive energy efficiency policies in the nation, helping utilities, residents and businesses optimize their energy usage.
Minnesota’s regulated utilities are also required to file integrated resource plans with the Public Utilities Commission. The plans identify the potential resources the utilities intend to use to meet consumer needs in future years. The plans include significant energy efficiency and conservation savings.
Last reviewed: November 2024
Energy Efficiency Resource Standards List All
Summary: Electric - 1.75% gross incremental annual savings from IOU utility energy efficiency programs. Natural gas – Minimum of 1% incremental annual savings from IOU programs. Savings from fuel-switching improvements and load management can also count towards these goals.
The 2007 Next Generation Energy Act (NGEA) established the state’s first EERS, which had been the primary policy driver for utility-sector energy efficiency, mandating specific energy savings goals of 1.5% of annual retail sales for electricity and natural gas. Municipal and cooperative utilities are also subject to efficiency requirements, though a 2017 law modified the applicability requirements to exempt small utilities under a certain customer threshold. About 13% of electric load and gas sales are also exempt from efficiency programs due to the state’s opt-out provision for large customers.
In 2021, the state enacted the Energy Conservation and Optimization (ECO) Act, that strengthened the state's EERS and expanded the scope of energy-saving measures that can count toward efficiency goals. To start, the new law sets higher utility savings targets, increasing the 1.5% electric savings goal for investor-owned utility programs to 1.75%, though it maintains the lower goal for consumer-owned municipal and cooperative utilities subject to CIP requirements. The legislation also increases the overarching statewide energy savings goal from 1.5% to 2.5% of annual retail sales of electricity and natural gas, which encompasses savings from a wide range of policies in addition to utility programs. These include savings from building energy codes, appliance standards, rate design, and other efforts. Also, and importantly, while the DOC previously had not tracked or regulated progress toward the broader statewide savings goal, the ECO Act now directs the department to provide reasonable estimations of progress in annual reporting.
The law also allows load management measures that reduce a customer’s net annual energy consumption to count toward utility savings goals. These include services that enable customers to shift load to reduce peak demand and lower their energy bills, and measures that enable the utilities to optimize the infrastructure and generation needed to service customers and facilitate the integration of renewable energy.
The ECO Act also opens a critical door for promoting beneficial electrification by allowing fuel-switching incentives under certain conditions. This will give the state and utilities an important pathway for accelerating adoption of high-efficiency electric heat pumps.
Last reviewed: November 2024
Utility Business Model List All
In 2007, the Minnesota legislature enacted Section 216B.2412, directing the Public Utilities Commission to allow one or more rate-regulated utilities to participate in a pilot program (of up to 3 years) to assess the merits of a rate-decoupling strategy. In June 2009, the PUC issued an Order adopting criteria and standards for pilot proposals for revenue decoupling (Docket No. E,G-999/CI-08-132, Issue date June 19, 2009). The Minnesota Commission has approved full revenue decoupling for three gas utilities, CenterPoint Energy, Minnesota Energy Resources Corp, and Great Plains Natural Gas (Docket Nos. Docket Nos. E008/GR-13-316; G007,G011/GR-10-977; and G004/GR-15-879). In addition, the Minnesota Commission approved full revenue decoupling for one electric utility, Xcel Energy (Docket No. E002/GR-13-868.)
Minnesota has had a shared benefit incentive in place since 1999. For gas and electric utilities, the percent of net benefits awarded increases as a utility achieves a higher level of energy savings measured as a percentage of retail sales. For gas utilities, the threshold is set at 0.7 percent of retail sales. For each energy savings increase of 0.1% of retail sales, net benefits awarded increase by 0.75% until reaching the net benefits cap of 10 percent at energy savings equal to 1.2 percent of retail sales. For electric utilities, the threshold is set at 1.0 percent of retail sales. For each energy savings increase of 0.1% of retail sales, net benefits awarded increase by 0.75% until reaching the net benefits cap of 10 percent at energy savings equal to 1.7 percent of retail sales. In addition, the incentive levels are capped at 30 percent of a utility’s Conservation Improvement Program (CIP) expenditures.
Gas utilities may exceed the 30% CIP Expenditures Cap, up to a maximum of 35%, if they meet or exceed energy savings equaling 1.2% of retail sales; electric utilities may exceed the 30% CIP Expenditures Cap, up to a maximum of 35%, if they meet or exceed energy savings equaling 2% of retail sales. (See Minn. Stat.§ 216B.241, subd. l(c) and Docket No. E,G-999/CI-08-133).
Last reviewed: November 2024
Evaluation, Measurement, & Verification List All
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Primary cost-effectiveness test(s) used: societal cost test
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Secondary cost-effectiveness test(s) used: utility cost test, participant cost test, and ratepayer impact measure test
The evaluation of ratepayer-funded energy efficiency programs in Minnesota relies on legislative mandates (MN Statutes 261B.241). Evaluations are mainly administered by the utilities. However, the Division of Energy Resources and staff from Minnesota Department of Commerce also assists in the evaluation administration. Evaluations for each of the utilities are conducted. Minnesota has formal requirements for evaluation articulated in MN Statutes 261B.241 and Rule 7690.0550. The state maintains the Minnesota Technical Reference Manual as a set of standard methodologies and inputs for calculating the savings impacts and cost-effectiveness of energy efficiency programs.
According to the Database of State Efficiency Screening Practices (DSESP), Minnesota specifies the SCT to be its primary test for decision making. The primary assessment level is the segment. The rules for benefit-cost tests are stated in MN Statutes 261B.241 and Rule 7690.0550. Minnesota’s SCT test accounts for environmental benefits from reduced emissions. Minnesota’s SCT also includes non-energy costs and benefits associated with asset value and productivity.
The National Efficiency Screening Project (NESP) recently conducted a study for Minnesota to examine how it might consider development of a cost-effectiveness framework for efficiency that incorporates the key principles in the National Standard Practice Manual (NSPM).
Further information on cost-effectiveness screening practices for Minnesota is available in the Database of State Efficiency Screening Practices (DSESP), a resource of the National Efficiency Screening Project (NESP). Further information on health and environmental benefits is available in ACEEE’s Overview of State Approaches to Account for Health and Environmental Benefits of Energy Efficiency.
Last reviewed: July 2019
Guidelines for Low-Income Energy Efficiency Programs List All
Requirements for State and Utility Support of Low-Income Energy Efficiency Programs
To help ensure that low-income customers have the opportunity to participate in CIP, Minnesota Statutes §216B.241, subd. 7(a) establishes minimum low-income spending requirements for electric and natural gas utilities and associations. The Energy Conservation and Optimization Act (ECO) was signed into law during the 2021 legislative session. ECO contains many changes and updates to CIP, including more than doubling the low-income spending requirement for all IOUs. Beginning in 2022, the minimum low-income spending requirement for gas IOUs will be equal to 1% of three-year average residential GOR. The minimum low-income spending requirement for electric IOUs will be equal to 0.4% of three-year average residential GOR beginning in 2022; then, it will increase to 0.6% of residential GOR beginning in 2024. Source: “HF 164: Energy Conservation and Optimization Act of 2021.” May 25, 2021.
Utilities track specific performance metrics such as spending and participation of low-income customers in their energy efficiency programs. The following link to a program modification regulatory Decision includes a set of example approved low-income program performance metrics.
Some utilities also have low-income spending goals for EE multifamily programs that target commercial property owners and that offer enhanced incentives for affordable housing properties that are verified according to the Department's low-income multifamily policy guidance. The Department considers these investments in affordable housing properties to be low-income spending because eligibility is determined according to a reasonable standard, the multifamily policy guidance, and affordable housing properties are “directly served” through the enhanced incentives.
Cost-Effectiveness Rules for Low-Income Energy Efficiency Programs
The rules for benefit-cost tests are stated in MN Statutes 261B.241 and Rule 7690.0550. The benefit-cost tests are required for portfolio, market segment, and at the program level. Due to their unique purpose and the spending requirement for low-income programs, the Department of Commerce has not required low-income programs to pass cost-effectiveness tests. Subd 7(e) of 216B.241 directs that “costs and benefits associated with any approved low-income gas or electric conservation improvement program that is not cost-effective when considering the costs and benefits to the utility may, at the discretion of the utility, be excluded from the calculation of net economic benefits for purposes of calculating the financial incentive to the utility. The energy and demand savings may, at the discretion of the utility, be applied toward the calculation of overall portfolio energy and demand savings for purposes of determining progress toward annual goals and in the financial incentive mechanism.”
Coordination of Ratepayer-Funded Low-Income Programs with WAP Services
The Minnesota Department of Commerce is responsible for administration of the federal Weatherization Assistance Program (WAP). The department’s Division of Energy Resources includes not only WAP but also the State Energy Program (SEP), Low Income Energy Assistance Program (LIHEAP), as well as the Conservation Improvement Program (CIP), a statewide program funded by ratepayers to help Minnesota households and businesses use electricity and natural gas more efficiency. Close proximity of these programs within the department allows for coordination of services for low-income households. The Department of Commerce Energy Assistance Program (EAP) offers a simple one-stop shop for applying to EAP, WAP, and CIP.
APPRISE Incorporated recently completed a State-commissioned three-year study on the Low Income CIP. One of the primary objectives was to assess the current performance of the utility LI CIP programs and identify opportunities for increasing the efficiency and effectiveness of those programs. Overall, the study found that the LI CIP is meeting or exceeding most of the statutory and regulatory requirements. The study also identified ways in which program performance could be enhanced through additional collaboration among the utilities to share program experiences, and between the Minnesota Department of Commerce and the utilities to consider the adoption of low-income program best practices.
Last Updated: November 2024
Self Direct and Opt-Out Programs List All
Minnesota offers a self-direct option, with a full exemption from assigned CRM fees, to customers with 20 MW average electric demand or 500,000 MCF of gas consumption. Customers must also show that they are making "reasonable" efforts to identify or implement energy efficiency and that they are subject to competitive pressures that make it helpful for them to be exempted from the CRM fees. Participating customers must submit new reports every five years to maintain exempt status. The utility is not involved in self-direct program administration; the state Department of Commerce functions as the manager of self-direct accounts and is the arbiter of whether a company qualifies for self-direct and is satisfying its obligations.
Commercial gas customers served by a gas utility with less than 600,000 gas customers in Minnesota that do not meet either threshold may opt-out if they can demonstrate that they have acquired or can reasonably acquire the ability to bypass use of the utility's gas distribution system. They must file a report every five years for up to ten years demonstrating that they are continuing to make reasonable efforts towards energy efficiency improvements. If the majority ownership of the facility changes, that period can be extended another ten years. Minnesota Department of Commerce staff will evaluate their spending and savings claims. As of July 2019, 56 customers currently self direct energy efficiency fund, accounting for 13% of eligible electric load and 22% of natural gas volume.
Last reviewed: September 2020
Data AccessList All
There is no policy in place that requires utilities to release energy use data to customers or third parties.
Guidelines for Third Party Access
For individual meter data, the MN PUC has approved a model data release consent form to to be used by all rate regulated utilities in Docket E,G 999/CI-12-1344 PUC ORDER.
For aggregate data, a utility shall not disclose customer energy use data without the customer’s consent unless the utility has adequately protected the anonymity of the customer energy use data. Each utility shall file its aggregation and release policies with the Commission within 30 days of the order or 30 days prior to implementation. See the 2017 order in Docket E,G 999/CI-12-1344.
While utilities are not required to provide energy use data to building owners and to public agencies, several utilities do make this data available.
Requirements for Provision of Energy Data
Minnesota does not require utilities to provide energy use data to owners of multi-tenant buildings or public agencies.
Energy Use Data Availability
Minnesota does not have a standardized system through which access to aggregated energy use data may be requested. Rate regulated utilities are required to use the approved data release consent form concerning individual meter data. This form must be signed by the customer.
Last reviewed: July 2019
Transportation
Score: 8 out of 13
Transportation Summary List All
Minnesota adopted legislation for California's clean vehicle standards, complete streets policies, VMT targets, transit funding, and EV rebates for efficient vehicles.
Tailpipe Emission Standards List All
Minnesota has adopted clean car standards. The policy will implement two clean cars standards to reduce vehicle emissions. The low-emission vehicle (LEV) standard requires vehicle manufacturers to deliver passenger cars, trucks, and SUVs that produce lower greenhouse gas emissions and other pollutants for sale in Minnesota. The zero-emission vehicle (ZEV) standard requires automobile manufacturers to deliver more vehicles with ultra-low or zero tailpipe emissions for sale in Minnesota, including electric vehicles (EVs) and plug-in hybrid models.
Sources :
https://www.pca.state.mn.us/air/clean-cars-minnesota
https://mn.gov/governor/news/?id=1055-491262
Last updated: November 2024
Transportation System Efficiency List All
Transportation and Land use integration: Complete Streets MnDOT Policy #OE004: The Minnesota Department of Transportation (MnDOT) must follow a Complete Streets approach in all phases of planning, scoping, project development, construction, operations, permitting, and maintenance activities
VMT Targets: Section 174.01 Subdivision 3 in Minnesota Statutes 2020 establishes the goal of reducing vehicle miles traveled by at least 20 percent by 2050 on a statewide basis. The statewide plan recognizes established national transportation policies and includes matters of local or regional concern to ensure a comprehensive, statewide, perspective on transportation policies and priorities.
FAST Freight Plans and Goals: Minnesota’s Freight plan has the following relevant policies and strategies: Implement Sustainable Freight Efforts: Actively lead on transition to low and zero emission freight vehicles, incentives for fleet replacement and coordinate with key public and private sector partners on electric, hydrogen and other motive power systems.; Address the statewide truck parking shortage and electric truck charging by working with public and private sector partners to identify truck parking needs, invest in new and existing sites and maintain truck parking availability information systems; Support the implementation and advancement of connected and automated electric vehicles, truck parking information management systems, work zone in cab safety messaging and others; Encourage modal balance and redundancy within key trade corridors so that businesses have access to a variety of cost-effective and competitive freight modes to ship their goods; Incentivize intermodal and multimodal facility development to allow goods to shift between modes to promote more competitive shipping rates, efficient use of vehicles, and minimize potential conflicts between freight and passenger modes
Last updated: November 2024
Transit Funding List All
Minnesota Statutes 174.21 and 172.24 establish public transit programs that include providing financial assistance from the state, including the greater Minnesota transit account. The purpose of the program is to (1) provide access to transit for person who have no alternative mode of transit available; (2) increase efficiency and productivity of public transit systems; (3) alleviate problems of automobile congestion and energy consumption and promote desirable land use where such activities are cost-effective; (4) maintain a state commitment to public transportation; and (5) meet the needs of individual transit systems to the extent they are consistent with the other objectives state above.
In 2023 Minnesota signed into legislation HF2887 a bill aimed to expand and improve transit services statewide with critical investments and policy changes including:
- Long-term, dedicated transit funding to dramatically improve transit across the Twin Cities metro.
- Cutting-edge policy to curb climate pollution from new transportation projects.
Last updated: November 2024
Incentives for High-Efficiency Vehicles List All
EV Rebates:
In February 2024 Minnesota launched an EV rebate program for eligible cars and motorcycles provided by the MN Department of Commerce. The owners or leases of new EV vehicles are eligible for up to $2500 and used EV owners up to $600. Complete information is available at the program page.
Toll credits of $125 for a PHV and $250 for BEVs is available for vehicles purchased between November 1, 2019-October 31, 2025.
Last updated: November 2024
Equitable Access to TransportationList All
Public transit: Minnesota incentivizes the creation of low-income housing near transit facilities through the Land Acquisition for Affordable New Development (LAAND) Program, and it considers the proximity of transit facilities when distributing federal Low-Income Housing Tax Credits to qualifying property owners.
EV Programs: Electric School Bus Program
For school districts with a priority classification by this program- defined by being above a 7.5% low-income threshold, rural, or districts serving Tribal land—are eligible for a grant covering 95% of the cost incurred by purchase an EV bus.
Last updated: November 2024
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