Senate passes several pieces of bipartisan Energy-related legislation

The Senate passed three bills related to Energy this week: the Natural Gas Innovation Act, the Energy Conservation and Optimization Act of 2021, and another smaller bill that would authorize a much-needed power purchase agreement between Xcel Energy and District Energy St. Paul.

The Natural Gas Innovation Act was seen last year but ultimately did not become law; the goal of the bill is to establish a regulatory policy to support investor-owned natural gas utilities that choose to use renewable natural gas (RNG) and pursue other innovative technologies aimed at reducing greenhouse gas emissions and increasing energy efficiency. The established framework would allow utilities to submit plans for approval from the Public Utilities Commission (PUC) that would outline how the utility plans to use innovations to meet the state’s Greenhouse Gas (GHG) reduction and renewable energy goals, which we are not currently on track to meet.

Supporters of the bill point to the bill’s goal to decarbonize natural gas, which made up 19% of the state’s energy generation as of October 2020. They also argue the bill will help meet the state’s GHG emissions reduction goals, promote technological innovation, and support rural economic development by creating jobs and helping our agricultural community with some of their proposed plans to recapture biogases from food or animal waste.

Those speaking in opposition to the bill voiced concerns that the Legislature is using precious time and state resources to focus on RNG, which is expensive and likely can only displace 3-7% of current gas consumption. They argue that while decarbonizing natural gas is a good goal, we should be focusing our efforts on building out the state’s electric infrastructure and spending resources to create an across-the-board decarbonization plan that helps the state transition to 100% carbon-free energy.

The Energy Conservation and Optimization (ECO) Act of 2021 was also considered leftover work from 2020; it is the result of three years of discussions and negotiations about the future of programs designed to use less energy and save Minnesotan’s money. The bill seeks to gain cost-effective energy savings for utilities that operate within Minnesota, including both investor-owned and consumer-owned utilities. If enacted, this legislation would bring the largest update since 2007 to Minnesota’s nearly 40-year-old energy conservation improvement program.

While Senate DFLers offered several amendments to improve the bill, including a provision to increase energy savings goals and another to increase the amount of spending on low-income programs required by the utilities, Senate Republicans instead amended the bill to make it more appealing to oil and propane companies. Discussions to work out the differences between the Senate and House version of the bill are likely to be fruitful, and DFLers are committed to taking an active role in advocating for these changes on behalf of Minnesotans.

The final bill authorizes a power purchase agreement to govern Xcel Energy’s purchase of electricity generated by District Energy St. Paul; the current agreement between Xcel Energy and St. Paul Cogeneration is set to expire in 2023. This joint effort between Xcel and District Energy would establish a unique pilot project for St. Paul’s downtown business district and the state capitol complex aimed to decarbonize heating and cooling in a targeted manner. If successful, it will also help address the waste from the state’s emerald ash borer infestation.

All three bills passed with varying levels of bipartisan support. The ECO Act is headed to conference committee with the House, and the other two pieces of legislation will be sent to the House for their consideration. (SF 421) (HF 164) (SF 1047)