At the Two-Year Mark, a Few Lessons from the Minneapolis Clean Energy Partnership – Episode 40 of Local Energy Rules Podcast

Date: 16 Sep 2016 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

Karlee Weinmann: The city of Minneapolis has earned wide reaching praise for its innovative, first in the nation partnership with a pair of local utilities formed to advance ambitious goals, to reduce emissions, energy consumption, and more. Two years in, the clean energy partnership is more than a novel tool to propel sensible energy policy. It offers lessons in how cities can better manage their energy futures. You’ve heard John Farrell on this podcast before, he leads the Energy Democracy Initiative at ILSR. And typically he’s the moderator on Local Energy Rules. But this time we’re flipping the script: rather than ask the questions, John will share his perspective on the historic partnership he helped to form, both what he’s learned so far and where he sees things going. I’m Karlee Weinmann, podcast editor and researcher at ILSR, and this is Local Energy Rules, a podcast sharing powerful stories about local, renewable energy.

So John, tell me what’s the clean energy partnership origin story. Where did things start for you?

John Farrell: So I sort of found out about the people who were interested in working on this way back in 2012. It was happening at the time when the city of Minneapolis was going through the final process of approving their climate action plan, as has been done in many cities, to figure out how to lower greenhouse gas emissions. And they had some very ambitious goals, including a 25% reduction in emissions by 2025 or maybe by 2030, but it was in the fairly near term. And what we noticed in that development of the plan when the draft plan came out was that about two thirds of the problem was really out of control, that it came from the usage of natural gas for heating and usage of electricity and residential and commercial businesses. And that all of that was in the hands of these two investor-owned utilities that serve Minneapolis: Center Point Energy for gas and Xcel Energy for electricity.

And so the big question for us was how can we take charge of this problem? How can the actually do something about the climate change problem and actually do something with its climate action plan? Some folks sat down and started kind of like basically brainstorming ideas. What can we do? We can beg and plead the utilities to do something more than they were already doing. But we had seen over many years that that was rarely successful. We could try to change state policy, but we had a legislature at the time that was not really amenable to improving renewable energy policies or doing climate legislation in particular. At that time, getting anything at the federal level was simply laughable. The Republican Congress was not willing to consider anything. It was only a couple years after the big failure of the climate legislation.

We thought about what was it that the city had within their power. And, you know, we thought, you know, there were some significant things that the city could do. It had control over the water bill and has its own water utility. It could offer incentives in terms of buying down loans for energy efficiency improvements. It could give money to neighborhoods to help do like revolving loan programs, which is something that they had done, but that ultimately whatever the city would do, it would be a rather lonely in terms of trying to attack this problem, but also still insufficient to meet those ambitious goals.

The two last things we talked about then where, you know, the city could take over, it could try to become a municipal utility. And in 40 years, since the adoption of legislation in the mid seventies, kind of upgrading state-based utility regulation. And not only that we knew it would be really laborious. It would take a number of years. It would be very expensive and it would involve lots of money for lawyers. Uh, and so the final thing that we came to was this notion of franchise contracts, which was this agreement between the city and the utility. Utilities were given a monopoly by state law. So we didn’t have control over that except for, with municipalization, but these franchise contracts, which were expiring in the next year or two from this perspective of 2012, governed the use of public property in order to deliver those services. And it felt like, Hey, this might be a place where the city actually could have a conversation with the utilities. So that, that’s how we started thinking about approaching this problem was these franchise contracts.

Karlee Weinmann: How did you decide what to do next?
John Farrell: Well, we were looking at all those different ideas and the franchise contract seemed the most likely place where the utilities had to sit down with the city to renegotiate these things. Even though that negotiation took place, it was usually more of a formal, but we thought it doesn’t have to be, the city really could do something with this, but if we wanted to take charge of this problem around climate for the city, if we really wanted to localize decision making and we wanted to do this through the franchise, what we needed was leverage. And that really became the name of the game for us in the end of 2012 and going into 2013, which happened to be a municipal election year. So we knew that the mayor was not gonna run for reelection. All the city council members were up for election. And so we initiated a campaign called Minneapolis Energy Options.

And the idea behind it was that we have an intentional goal, which is we need the city to be able to pursue this climate action plan, but we’re open to the options the strategies that the city might pursue. So we weren’t saying that we thought any particular way was the right way, but that we knew that we were gonna need leverage if we were gonna get into these negotiations. What we also realized is that the only leverage we were ever gonna have was this notion of a municipal takeover. That was the only real legal leverage that a city would have over its investor-owned and monopoly utilities. And so we knew that what we wanted to do is get that on the ballot, get municipalization on the ballot, not even to say that the city should take over, but just to give it the authority to let the citizens give the city the authority to take over. And we thought that then when the city sat down with the utilities, they could really honestly say to them either give us something substantial or we’ll exercise this authority that we’ve been given to take over.

Karlee Weinmann: It’s gonna bring them to the table.
John Farrell: Exactly, exactly. It’s gonna make them realize that they, the negotiation has to be taken seriously. And so the big next step then was that we had to organize. That we went to neighborhood organizations and went to those monthly meetings. We organized in the party caucuses, mostly in the DFL party in Minnesota, because they tend to control most of city politics in Minneapolis. We went to candidate forums. We did door-to-door canvassing. We did phone banking. We were very successful. We got a number of candidates to endorse the Minneapolis Energy Options campaign, which was essentially saying the city should explore its options. It wasn’t a hard ask, frankly. And so we got a lot of endorsements, including the current mayor when she was a candidate.

But I, one of the biggest successes too, is that we also got the city to put $250,000 into what they called an energy pathway study, which was to say, we recognize as a city that we don’t actually know how we’re gonna meet this climate action plan. So we need to figure out what our, our legal pathways for getting there. And we knew in about July that we had been successful already because we got the utilities attention enough and Xcel energy, the incumbent electric utility, sent a full color opposition mailer to every single customer in the city of Minneapolis saying that this was a horrible idea to put municipalization on the ballot because Xcel was such a great company and was giving the city everything that it wanted. And it was great because there was a lot of skepticism among city officials, among electricity customers or whatever. And I think that letter, in some ways, only heightened it for them like, oh, here’s the utility just being heavy handed, who knows how they paid for this flyer, for example, you know, we sort of paid for that, but we knew that we had their attention.

But the real tension and the struggle was that we weren’t sure that we had the votes. We needed to have seven out of 13 council members willing to put this on ballot. And then we needed to know for sure that we could win having a ballot initiative for municipalization and losing wasn’t something that we thought would be very useful in the long run. So we knew that what we needed was that leverage. And we knew that we had gotten the attention of them. We’d organized well enough that the utilities were paying attention, but we weren’t sure that we could win, you know, in mid-summer there was a lot of debate within our campaign about whether or not we should really keep pushing for this, if we weren’t sure if we could win.

And what ended up happening is right around that time that that big glossy flyer went out from Xcel Energy, CenterPoint Energy gave us a call and asked us to come meet with them. And they said, we’re willing to negotiate. We would like to sign on and say, we’re willing to help the city meet its climate action goals. And as long as you guys basically remove us from the equation, say that when you’re for municipalization, you’re not talking about taking over the gas utility. So it was a huge breakthrough. We signed a memorandum of understanding with them, with their regional president or whatever, and myself and some of the other organizers of the Minneapolis Energy Options campaign that they were committed to this that broke the whole thing open because within the next couple of weeks, Xcel energy published a public letter saying they were gonna do you the same, that they were willing to work with the city on its climate action plan. Again, this was, this created some tension for us, cuz what ended up happening of course is that the city council said, well, we’re not gonna take the vote. Then if the utilities are willing to work with us, we’re not gonna go down this road toward municipalization. And there was some question among us about whether or not we had won or whether or not we had lost.

Karlee Weinmann: Where do you go from there? It’s not what you were hoping for, certainly, but it’s something. How did you negotiate that and navigate the next steps?
John Farrell: Well, there was a lot of naval gazing about whether or not what we had done was the right thing and whether or not the outcome was what we wanted. We didn’t get the municipalization vote on the ballot. We felt in a way, like we had lost the fight for the leverage that we wanted. On the other hand, we had actually already gotten something that we wanted, which was, we’d gotten this public commitment from both utilities. We actually got a really lovely letter of response from the current mayor, R.T. Rybak, to Xcel saying essentially, I hope you mean what you say because you’ve made lots of promises before. It was the perfect response to say that yes, we would love to work with you, but it’s gonna have to be more meaningful than it has been in the past.
Karlee Weinmann: How significant was it to have an ally like the mayor being so public about his demands for accountability, or at least follow through in that context?
John Farrell: It was really crucial. You know, it was sort of an accident. We were really focused on the sort of incoming candidates. Like I said, we had worked hard to get into endorsements from candidates in the election. And the fact that the incumbent mayor was willing to step out there and say, no, we are gonna have to pay close attention to what you do was, was really big. We already had a number of allies on city council who were really helpful and really good at pushing for us and whatnot. But I think that really made it clear that the city is on our side in this fight and that the utilities were gonna have to please the city in some ways to get them off their back. And frankly, I think that’s another element to this is the leverage that we had was sort of the public image of the utilities, having municipalization on the ballot, in the hometown of Xcel energy, their headquartered in downtown Minneapolis, was something that they didn’t wanna have to contend with.

At the same time they were through a municipalization fight in Boulder, Colorado. It was starting to look kind of ugly for them. And as I recall that the, CEO of Xcel actually was invited to the Star Tribune editorial board and apparently was very, very emotional and very angry about what was happening about the idea that the city would consider municipalization. They were in the process actually building a new headquarters building downtown and he was angry enough to talk about them all, you know, picking up and leaving town and whatever. So we got under their skin.

And the good news is that the city still had that pathway study I had mentioned earlier and the results of that came out in February. So there were a couple months where we kind of went back and forth about, are we getting what we want? Are we not getting what we want? And that pathway study came out and it had four options that the city had explored, starting with municipal and kind of dismissing it as under the state law that we had very expensive and time consuming. And even if we could in the end, because we had controlled the utility do what we wanted, it would take five to 10 years to actually start down that path because we would have to fight the incumbents to take over for that long. Another thing they looked at was a policy called community choice aggregation, which would’ve involved changing state law. And as I mentioned before, the state legislature was not a hospitable place. And so we thought that that was fairly unlikely. And then the last two things were kind of a modified franchise agreement that included some of these policy ideas, which we weren’t sure was totally legal.

And then this novel idea, this Clean Energy Partnership, which none of us had ever heard of before. And it’s a credit to the Center for Energy and the Environment that in doing the study, the pathway study, that they kind of came up with this concept, but we felt like this was the pathway that we had open to us that we could use and, and the best chance that we have for continuing our campaign. What that meant then was we’re now several months after our aborted attempt to put municipalization on the ballot, the franchise contracts were set to expire at the end of 2014. We’re now in February or March and was to figure out, okay, how do we get an agreement before those franchise contracts have to be signed around this partnership idea? And how do we make sure that that structure gets set up in a way that doesn’t just give the utilities the ability to roll us over? So how do we make sure there’s lots of city power and authority in that group? How do we make sure that there’s a role for community members to have input in this process? So that even if we really believe that the folks at the city are doing the right thing, that if they should all change five years from now that we’re not stuck without a way that we can give input and that we were successful.

And so in October, 2014, the city signed and created this first in the nation clean energy partnership, including a substantive role for community participation called an Energy Vision Advisory Committee, which I actually am still sitting on in my first term, and also a shorter franchise contract. So instead of the 20 year contract that had signed previously, the contract was 10 years, but with an optout provision after five years, which maintained the city’s leverage then over this contract, so that if something went wrong, if we felt like the utilities were not in fact living up to their promises, the city would have some leverage short of municipalization that they could use in a reasonable timeframe.

Karlee Weinmann: Where does the clean energy partnership stand today?
John Farrell: We’re getting to the end of the first two year work plan. The process that was agreed upon was that they would do two year work plans that would be developed about six months in advance of each two year cycle. Most of the first two year work plan was really just kind of a lay of the land pulling together, kind of all the information on what the utility are already offering in terms of energy services, what the local and state based programs were getting some data sharing, going between the gas utility, the electric utility in the city, helping to overlay the utility data with census tracked information. So we could start tracking service delivery by socioeconomic status or by race to get to some of those equity issues that we cared.

And to be honest, in terms of the output, they released the first annual report on the partnership about a month ago for the calendar year 2015, there’s not much in there to brag about. It’s a good comprehensive review of the programs utilities were already offering that overlap with the goals of the first work plan, but it’s not really showing a lot of substantive difference in the way that we’re doing things. And in some cases it’s just sort of a puff piece for things utilities were doing. Xcel, for example, has a program called wind source where you can pay a premium to get all of your electricity from wind energy, and you can buy it in, I think a hundred kilowatt hour blocks. Well, wind energy is the cheapest resource there is when you build new power generations. So why we should still be paying a premium for wind is beyond me. And then the second thing was that there just wasn’t a lot of evidence that other new things were happening.

And so, the key right now is gonna be, what does this next work plan look like? What’s gonna be put into it. What’s gonna come out of it. The one last thing hanging over from the first work plan is this notion of community engagement, which is how do we pivot utilities from simply marketing and like putting in bill inserts and sending out flyers and sending out emails about conservation programs or renewable energy programs to doing serious community engagement, where we are taking folks who are trusted members of communities of color or in low income communities and having them out, going out there and carrying the message of here are the kind of services that can help you reduce your energy costs. And, and the tension is of course that we don’t even have the programs designed in the right way to do that. That’s kind of the key to this next work plan then is what are we gonna put in there that’s gonna accomplish some of those goals.

Karlee Weinmann: So with that sort of coming down the pike, what do you see as the partnership’s main goals and, and how do you measure its success going forward?
John Farrell: There’s sort of two or three hats I wear in this, in answering this question. I think speaking as someone who is working with the partnership on this community advisory committee, measuring success and identifying the goals as easy they’re in the documents, the city’s climate action plan, and also a document called energy vision 2040. And that includes now an 80% reduction in greenhouse gas emissions by 2050, eliminating disparities in energy access and cost by socioeconomic status, by race, and home ownership status, getting 10% of our electricity from local sources. One of, I think the most important goals, and one of the most challenging is reaching 75% of households in the city with some sort of energy efficiency retrofit within the next nine years. Just to give you some context for that, we currently have reached maybe about 10% of households with all of the programs to date historically, and we do about 1% per year.
Karlee Weinmann: Ambitious.
John Farrell: Yes. And then the, the final goal that’s kind of articulated there is to reduce energy use by 17% between 2013 and 2025. So not just shaving off energy growth, but substantially reducing energy consumption. And I think that really ties into that previous one, ambitious target about the 75% of households. If you can’t reach that many people, you probably can’t make that kind of dent in energy consumption. So that’s really how I see the partnership as measuring success. And I think by those scores, we’re really making very little progress with the caveat there’s a lot of learning that needs to go on in terms of what are the tools that we have at our disposal and what are the new ones that we need.

I also wear in this conversation my hat with Minneapolis Energy Options are now, we’ve called our group Community Power and Minneapolis Energy Options is the campaign that we’re running. And our goals are more ambitious in that we wanna see a hundred percent renewable energy in the city of Minneapolis. We wanna see 75% of it coming from local sources or locally owned sources, but we also share a lot of the city’s goals in terms of eliminating disparities and reducing energy consumption. So I think we measure success under both of those things. So our goal at Community Power is to kind of push the city and the partnership to be even more ambitious, but primarily to make sure that they can even live up to the goals that they have in the existing plan.

Karlee Weinmann: So how effective, in your view, is the partnership at supporting renewables and responsible energy policy versus what might have been done with municipalization?
John Farrell: Well, I think the key here is that municipalization is a really time consuming and expensive process. It’s not to say that it wouldn’t be worth it in the end, but even if we had passed that ballot initiative in 2013 and the city had then done a feasibility study of municipalization and then decided to go ahead with it, we’re probably talking 2020 before the city effectively has control over the grid and was making the decisions. So that’s a lot of years that would pass, you know, years that we need to reach some of these goals that we wouldn’t really be doing anything other than fighting with Xcel and Centerpoint. So I guess the answer to that is we don’t know what would’ve worked better at this point.

I’m optimistic that the partnership will prove more effective because we have more time to work with it. Although the key is whether or not some of the programs that have already launched are gonna be ambitious enough and whether or not the new items that we add can be successful. They just launched a multifamily energy efficiency program to get to renters in a way that they haven’t been able to before. It’s only been active for maybe six months, they’ve got a couple pilots for community engagement, but they haven’t yet even put out the RFP, the request for proposals to deliver those services yet. And what we are really lacking is what, what we like to call inclusive financing, which is to say that probably half or more of the residents of Minneapolis couldn’t get a loan based on their credit score in order to finance renewable energy or energy efficiency in their home, or their apartment. And so we need a tool that allows them to participate if we’re gonna reach 75% of, of households. And so those are kind of the key issues I think, that I think the partnership can allow us to do a lot of that stuff and it can even do that on a better time scale than municipalization, but it remains to be seen.

Karlee Weinmann: So from where you sit, what happens next, what opportunities does a unique partnership like this one create for further policy action? Like the ones you’ve described?
John Farrell: I think the most important thing is just how inspiring this work has been for people in other places. So when we created this partnership, Minneapolis was recognized by the White House as an innovator on climate. This utility partnership has gotten a lot of attention. It’s been something that Xcel and center point have talked about around the country. When they go to conferences, I’ve been invited to go speak in a lot of places. I mean, I can list off five cities right off the top of my head that have all been inspired. Madison, Wisconsin, Tucson, Arizona, Santa Fe, New Mexico, Salt Lake City, Utah, and Duluth, Minnesota, all places where there are either official efforts through public agencies or through the city government or groups of activists who have taken inspiration from the campaign here and are trying to do something similar in their communities.

I also think that there’s a lot of really fascinating and interesting things that we can do that combine sort of city policy and utility resources. One of the things that we’re looking at is the city currently has what’s called a truth and sale of housing form. So it’s this boring five page document that you get when you are buying a house and it discloses all sorts of things about the presence of lead paint or asbestos or whether or not the water comes from a well or all those sort of things that you probably need to know in buying a house. But what you don’t learn anything about is whether or not that house consumes a lot of energy or not, or whether or not the house has insulation. You know, many Minneapolis homes actually have none, which is sort of startling in that it’s 2016 and in this climate that you could have a property without insulation. The city, however, has authority to change that they can require that a seller provide information about the energy consumption in that prop.

And so what we’re looking for is that the seller of a home would have to have an energy audit conducted that would give the person who’s going to buy that home an idea of what it would cost month to month to pay the energy bills. So that instead of just talking with their realtor about what kind of house they can afford, based on the mortgage payment, that they’re factoring in energy costs, which can be very substantial. And we hope that’ll do two things. We’ll one is it will create a market for more energy efficient homes, cuz people will be shopping for that alongside the cost of the property, but also that it will, if we tie it together with other things like inclusive financing, allow us to give tools to people to make changes. So maybe in one case, the seller will say, well, my energy score was really bad. Well, I’ll make some improvements before I sell of the house with what some folks call on-bill repayment, the improvements are done immediately. The property is now much more energy efficient. The energy savings will accrue to whoever’s gonna live there and with on bill repayment, the payments actually stay with the property. And so that seller knows that they don’t have to put in a bunch of money and somehow recoup that in the sale price, they can make those improvements and know that their house will look efficient to the person moving in. And that the person who moving in will also assume responsibility for paying for those improvements. So I think there are a lot of interesting ways in which the city and utility resources can combine in the partnership to do some pretty impressive things.

Karlee Weinmann: Looking back on the partnership to date, what are the biggest challenges in informing it and what are its biggest challenges now?
John Farrell: The utilities are always reluctant to do something different. It’s a product of the rules that they operate under that encourage them to kind of be responsive to state regulation and not to individual cities. And also it’s kind of a cultural one in that because little has changed in their business model or their way of operation in decades, that they’re not really used to coming out and trying something new and innovating. And so it was very clear. And, and you could, I think sense that from the fact that we didn’t bother trying to really sit down with the utilities at the beginning of this conversation, we sort of recognized those conversations have been had before and the utilities weren’t particularly helpful. And so we knew that we were gonna have to move em by making them feel like they needed to move rather than just cajoling them along.

I think the second thing though, too, was also making energy an issue that folks in the city and candidates would care about. So making Minneapolis Energy Options a campaign issue was important because it let folks know that it was something that their constituents would be responsive to. I think those were the big challenges informing the partnership and in kind of getting to where we are in terms of the structure and the biggest challenges now are overcoming the inertia that utilities have still toward like doing the same old thing. So, you know, energy conservation is a marketing strategy and not as a community engagement strategy, still wanting to make money by selling more energy and, and also not being very open to new and innovative program designs.

So for example, we’re interested in ways that the city could potentially own renewable energy generation outside of city limits kind of out in rural areas, wind turbines or solar panels, and sell that power to the utility and also keep the renewable energy credits. So keep the renewable attributes to be used for, you know, meeting the city’s climate action goals. Well, that’s kind of a challenge to the utilities way of doing things. They wanna build the power generation and sell it to somebody they don’t wanna lose their market share. So that I think that continues to be an issue that we have to struggle with. And then also pushing people to city, you know, like the city has a franchise fee that’s part of their franchise contract, which is money the city collects on utility bills. They could raise that fee and collect more revenue that could go toward this partnership. You know, you talk to people in the city finance department though. They’re not usually very enthusiastic about you finding ways to dedicate revenue that have been going into the general fund. So it goes both ways. I think both the city and the utilities continue to be pushed to think about new and different ways of doing things.

Karlee Weinmann: You’ve mentioned that this effort has inspired action elsewhere across the country. What lessons should other cities take away from the process that you were a part of?
John Farrell: Well, I think two things. One is that if you really wanna move utilities and elected officials, you need leverage, you need to make them feel like they have to respond to you. So whether that’s making it a campaign issue, as far as getting city officials to pay attention or for the utilities presenting a credible alternative to their business plan, like municipalization, I think the second thing though, is that you always have leverage in a way that you might not imagine. So, you know, I’ve been impressed with folks in Madison, for example, who have kind of taken up the charge in Wisconsin. One of the ways that they have fought their investor owned utility is to get people who are shareholders to do shareholder resolutions and to go to shareholder meetings and to demand change from the inside. And I think that’s a really interesting and innovative strategy and one that we didn’t have to use here. It’s probably one that we could use here in Minneapolis, and that we’ll learn from if we need it. But to me it suggests there’s always a lever somewhere that you can move. And so it’s just a question of identifying where those levers are and how to pull on them.
Karlee Weinmann: That was John Farrell, ILSR’s director of Energy Democracy speaking about the accomplishments of Minneapolis’s Clean Energy Partnership so far, and the challenges that lie ahead. You can find a wealth of information on the partnership at ilsr.org and at mplscleanenergypartnership.org. More Local Energy Rules podcasts are available at ilsr.org as well. Until next time, keep your energy local and thanks for listening.

 


Minneapolis garnered national attention when it formed a first-of-its-kind partnership with local utilities to advance sustainable, efficient energy policy. Now, as communities across the U.S. increasingly push for influence over their energy futures, the Midwestern city offers a blueprint for what works and a taste of the challenges that come with cooperation.

John Farrell, who leads the Energy Democracy Initiative at ILSR, was a key player in forging the hard-fought Clean Energy Partnership in 2013. He’s still involved as a member of the advisory committee formed to steer the city and its two investor-owned utilities toward policies that favor renewable energy and efficiency.

Officially two years in, the Minneapolis model offers deeper insight to other communities chasing meaningful change. Farrell outlined the key takeaways in the latest episode of Local Energy Rules, the ILSR podcast that highlights innovative pathways to local, renewable energy.

A Historic Partnership

The Clean Energy Partnership, as it’s known, marked a pioneering approach to responsible energy policy. It united the City of Minneapolis and its two investor-owned utilities, electricity provider Xcel Energy and natural gas provider Centerpoint, to advance the city’s goals for shrinking its carbon footprint and promoting a healthy energy economy.

By the time the partnership formed in 2013, Minneapolis had already set ambitious targets for reducing emissions by 30 percent by 2025 — a benchmark out of reach unless households and businesses significantly cut their electricity and natural gas use. That energy consumption was central to the effort, placing utilities at the heart of the issue.

Still, the utilities hopped on board only after a fierce campaign to shake up their outdated business models, including a threat to put power exclusively under the city’s control. Ultimately, the focus shifted away from municipalization toward the unique three-way framework in play today. The compromise guaranteed a change in how the city treats energy.

“We didn’t get the municipalization vote on the ballot. We felt in a way like we had lost the fight for the leverage that we wanted,” Farrell said. “On the other hand, we had actually already gotten something that we wanted, which was we had gotten this public commitment from both utilities.”

The months-long saga spotlighted the need for innovative strategies, like raising municipalization as a viable alternative, to push reluctant utilities and enterprising cities toward better energy policies.

Building Alliances

Organizers in Minneapolis mounted their Minneapolis Energy Options campaign at a key time, when each city council member and the mayor were up for election. Several sitting policymakers had aligned themselves with the city’s Climate Action Plan, but the election season brought a bigger platform to raise energy issues — including municipalization — and demand accountability.

Multiple candidates, as well as the outgoing mayor, threw their weight behind plans to shake up how Minneapolis approaches energy. Against the backdrop of growing community interest, the organizers nailed down commitments from officials and in turn cemented vital alliances at City Hall. Still, as labor-intensive as it was, drumming up support from voters and candidates was the easier part.

The utilities, locked into a decades-old business model that shortchanges renewables and energy efficiency, were tougher sells. Ultimately, they buckled under rising pressure to join forces with the city. They promised to evaluate how they could fit into the city’s aggressive energy plan, and then-Mayor R.T. Rybak made clear the city expected distinct results.

In a letter to Xcel’s brass, Rybak set a bar for the partnership to produce a payoff more significant than the utility’s lackluster past efforts to support Minneapolis in going green.

“It was the perfect response, to say that, ‘Yes, we would love to work with you, but it’s going to have to be more meaningful than it has been in the past,’” Farrell said. “That really made it clear that the city was on our side in this fight, and that the utilities were going to have to please the city in some ways to get them off their back.”

Finding Leverage

Pressure from the city exposed new opportunities to prod the utilities to do more. Rybak’s letter put momentum behind the Minneapolis Energy Options campaign, but it also invited officials — and the public — to closely monitor exactly how far the utilities went to propel city goals forward. That particularly stung Xcel, whose headquarters sits in downtown Minneapolis.

A budding fight for municipalization, or at least a notable overhaul, in MInneapolis fanned tensions already brewing in Boulder, CO. There, Xcel was mired in a long-running, messy fight over whether the city should squeeze it out to form its own electric utility. As Farrell remembers it, Xcel’s CEO was so defensive that he hinted the company would move to a different city.

“We got under their skin,” Farrell said, noting that a utility’s public image can be a valuable tool to force change. The specter of ratepayers frustrated with Xcel for doing too little to support the city’s Climate Action Plan became a pressure point in getting the utility to deepen its focus on those goals.

Advocates eyeing similar shakeups in their cities can borrow from the growing crop of cities eyeing similar outcomes, but there’s no one-size-fits-all approach. Organizers in Madison, WI, for example, have followed Minneapolis’ lead to motivate meaningful changes in local energy policy. But their approach is decidedly different — it starts in the boardroom.

Shareholders in Madison’s investor-owned utility have called for tweaks through resolutions that outline better long-term strategies. The “activist shareholder” approach has become increasingly common in U.S. boardrooms, and the technique can be useful in bending utilities toward policies and programs that favor customers, renewables and energy efficiency.

“If you really want to move utilities and elected officials, you need leverage,” Farrell said. “You need to make them feel like they have to respond to you.”

Thinking creatively about the individual dynamics at play in each community is key to crafting the solutions that make progress possible. Cities like Madison and Minneapolis both showcase the potential for novel tactics to shape the fight for more sensible energy policy.

“To me, it suggests there’s always a lever somewhere you can move,” Farrell said. “It’s just a question of identifying where those levers are and how to pull on them.”

Charting Progress

Minneapolis’ unique approach to addressing significant gaps in in energy mix offers a loose blueprint for other cities, but the partnership is far from a ready-made solution. While it itself offers a platform for delivering results, growing pains and slow progress showcase the ongoing work needed to capture the opportunity.

The citizen advisory committee, on which Farrell sits, is an important check on the partnership’s progress and priorities — especially considering the inertia prevalent among utilities that leaves them reliant on an old-school business model that hinges big profits on hefty consumption and dirty power generation.

As it stands, Farrell says, the Minneapolis framework through its first years has yet to reach its potential. The group is approaching the end of its inaugural two-year work plan, designed mainly to set a foundation for future efforts. Reports so far highlight existing programs that dovetail with the partnership’s goals, but the utilities have yet to introduce new, bigger approaches.

“That’s kind of the key to this next work plan,” Farrell said. “What are we going to put in there that’s going to accomplish some of those goals?”

Going forward, advocates want to see richer data collection and a focus on equitable access to initiatives that support access to renewable energy and efficiency-oriented upgrades. They also want greater community engagement, a callback to an important piece of the Minneapolis Energy Options campaign.

Measuring some progress is easy, because benchmarks are spelled out in city documents. That includes emissions reductions of 80% by 2050, a plan to reach 75 percent of Minneapolis households with an energy retrofit by 2025, and an overarching effort to reduce energy consumption. But none of those will happen — and no more ambitious goals will surface — if the utilities don’t debut wider-reaching programs with access in mind. The initial work plan also failed to set any interim goals, making it harder to evaluate efforts in the short run, an issue Farrell is interested in solving for the upcoming two-year plan.

While municipalization would have guaranteed the city more flex over how it achieves its goals, the partnership offers advantages. Rather than wrangle over a city utility takeover for several years, the three-pronged partnership can get to work now.

“I’m optimistic that the partnership will prove more effective because we have more time to work with it,” Farrell said. “Although the key is whether or not some of the programs that have already launched are going to be ambitious enough and whether or not the new items that we add can be successful.”

For further reading, check out Farrell’s review of the first two years of the Clean Energy Partnership and proposals for the next work plan from Community Power (the successor to Minneapolis Energy Options).

This is the 40th edition of Local Energy Rules, an ILSR podcast with Director of Energy Democracy John Farrell that shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion. Other than his immediate family, the audience is primarily researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies.

Local Energy Rules is published intermittently on ilsr.org, but you can Click to subscribe to the podcast: iTunes or RSS/XML.

This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter or get the Energy Democracy weekly update.

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Karlee Weinmann

Karlee Weinmann was a research associate for ILSR’s Energy Democracy initiative. She produced reports that spotlighted best practices in an evolving energy economy.