Evaluating the Minneapolis Clean Energy Partnership, Five Years In — Bonus Episode of Local Energy Rules Podcast

Date: 18 Oct 2019 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

The city of Minneapolis, and utilities Xcel Energy and CenterPoint Energy, established the first-of-its-kind clean energy partnership on October 17th, 2014. Five years have passed, so it’s time to evaluate: does this anniversary deserve a celebration?

In this bonus episode of the Local Energy Rules podcast, host John Farrell speaks with Minneapolis City Council member Cam Gordon. Farrell and Gordon, with help from Alice Madden of Community Power, talk about what the clean energy partnership has —and has not— accomplished since 2014.

Listen to the full interview, read the transcript, and explore other resources below — including ILSR’s coverage of the partnership over the years.

Cam Gordon There’s been a lot of things that have been very frustrating about the partnership. It really hasn’t given us much more control over our energy future.
John Farrell Five years ago today, Minneapolis signed a first in the nation clean energy partnership agreement with its private monopoly gas and electric utilities, but was it worth it? In this bonus podcast, I was joined by Minneapolis city council member Cam Gordon to evaluate the city’s partnership with its energy utilities and to ask whether it was paying off, or if the city would be better off finding ways to go it alone toward its ambitious climate goals. I’m John Farrell, director of the energy democracy initiative at the Institute for Local Self-Reliance and this is Local Energy Rules, a podcast sharing powerful stories about local renewable energy. Cam, thank you so much for joining me.
Cam Gordon My pleasure to be here.
John Farrell So Cam, I was hoping to start our conversation about this clean energy partnership by asking you to talk a little bit about what was the hope for the partnership. This came out of a discussion about municipalization, about the city taking over its energy utilities. Back in 2013, there was a lot of negotiation and ferment and there was a city election during that time and what came out the other end, about a year later, was this agreement in October, 2014 that the utility companies would work with the city to advance toward the city’s climate action goals. And I’m just curious, what did you see as the hope for the partnership? What were you hoping would come out of that partnership between the city and the energy utilities?
Cam Gordon I really saw it as a potential test to see if such a partnership could work. I think I had mixed objectives at that time, partly because I was part of the effort to municipalize our utilities here in Minneapolis. We have an electric company and a natural gas company that work here and I was interested in seeing if we could get more democratic control over there by municipalizing and having our own system. So the partnership was kind of a fallback or a compromise when it looked like that was going to be such a big reach and maybe not possible. And so, um, I was hopeful on one front that it would show that we could work together and we could realize our energy vision and transformation to clean energy and a reduction in greenhouse gas emissions. And I was also hopeful that it might, uh, carve a path out so we could ultimately get to more, um, control over our energy production and maybe distribution as a city government and as a city entity.
John Farrell What would you see in the timeframe of this five years? How are like the biggest accomplishments of the partnership and the partners? What do you see stands out as being something that’s good that’s come out of this?
Cam Gordon I think we’ve got more public interest in how the utilities work, government interests from the utilities and also from city government itself. Prior to the partnership, I think there was very little interaction between city government and even the community at large and the utility companies, particularly around them clean energy and what we would do. I think most people saw their opportunity to influence those things occurring at the legislature because there was more state control and regulations. And I think the utility saw the city as something to work with when they needed access to the right of way when they were hooking up wires and when there was a power outage, those kinds of things. And so this really helped, I think, get communication going and we actually meet now and talk. It’s helped us to leverage different policy changes I think on the city level where we’ve been motivated just because we want to be a good partner.

So we’ve taken action to build up our efforts to move towards cleaner energy and more energy efficiency. We actually created a community advisory group that looks at it and specifically looks at our energy vision and our climate action plan and how to implement those. So from the perspective of somebody who worked hard on that energy vision and the climate action plan, I see a lot more infrastructure came to help support that work at the city level. And I also think that we have the utility companies at the table. We actually have a staff level meeting that happens at least quarterly where there’s policies, staff from the two utility companies and the city who meet and discuss the issues and haggle over things. And then we have our clean energy partnership board members where there’s representatives from the three entities that get together quarterly and also look at issues and discuss things. And I think that’s, those are all positive things.

John Farrell I think it’s sort of noteworthy that in your description of what’s been accomplished, there’s a lot of process things that have been accomplished, a lot more conversation happening, which I think obviously is a good thing, but I don’t hear as much about like big plans to reduce greenhouse gas emissions, you know, large solar construction, that kind of thing. Thousands of homes retrofitted. Do you feel like in terms of the outcomes, in terms of progress towards a climate action plan that this partnership is moving things along fast enough to reach the city’s goals? You know there were some ambitious things in there. For example, I remember as someone who has sat on that advisory committee, the community advisory committee that you mentioned, one of the city’s goals was to retrofit something like three quarters of Minneapolis homes by 2025 are we getting there fast enough through this partnership?
Cam Gordon No, and probably not. So there’s been a lot of things that have been very frustrating about the partnership. It really hasn’t given us much more control over our energy future, direct control, sometimes it feels like the city’s still mostly doing all the work and the lifting and we don’t have that much influence. There are certainly examples where we think maybe we’re making some progress, but one of the utilities will simply go and work at the state legislature and do things directly opposite of what we think are our goals in terms of our energy here. Typically what we see is more interest in having the city cooperate with utilities in implementing the programs they’re already required to do. And we hear this pushback from the utilities about, Oh, we can’t really do more because everybody’s in our rate base and we have to implement these programs across the board. We’ve had resistance even to go to the public utilities commission to ask for uh, opportunities or pilot programs or some special things we could do in Minneapolis as demonstration projects that could work well and that that resistance has come from the utility companies more than anything else. And so, um, it hasn’t necessarily gotten us there faster and I’ve had certainly had my moments where I’ve wondered is it even worth all the energy that we’re putting here or is that keeping us from maybe doing more in other areas?
John Farrell I wanted to take a moment to expand on your comment about the legislature because we interviewed Alice Madden from community power, an advocacy group that’s been very involved in this city’s climate efforts, and she had a laundry list of ways that Xcel energy, the electric utility has been asking for things contrary to the partnership. Let’s listen to a bit of that interview.
Alice Madden When you see them at the legislature, you see them at the PUC, you know, I can’t help but notice introducing legislation that’s anti-rate payer, that’s asking rate payers to foot the bill for things like a nuclear plant cost overrun or a new fracked gas plant or going outside of the agreed upon process to purchase another fracked gas plant or replace the coal plant with the fracked gas plant. Launching a time of use pilot that’s within Minneapolis but without being in consultation with the city to determine, you know, what the protection needs to be for vulnerable neighborhoods or which one should even be included in the pilot. Testifying in front of energy committees to gut a clean energy program that they really love in all of their marketing materials, which is a community solar garden program.
John Farrell That’s a pretty big list of things the utility’s been doing contrary to the city’s climate goals. In contrast to the many efforts, the city has been leading it mostly on its own. So there’s this study on the clean energy workforce, kind of looking at how it can be more inclusive for people of color and for low income folks. There’s the city’s investment in a feasibility study for inclusive energy financing. There’s the city’s new energy disclosure policy for making sure that when people buy a home or rent a property, they’re learning about the energy costs associated with that. There’s a benchmarking program for multifamily properties and there’s of course there’s this big thing which is the franchise fee increase of a half percent, which has created this two and a half million a year fund to invest in local climate solutions. And I guess are there more things other than that that you see the city doing or the city has that it’s been working on? Gee, I just think it’s a fairly impressive list and I’m curious like what more does the city already have that it’s thinking of doing, uh, as part of this effort that they’re doing on their own?
Cam Gordon Well, we’ve also made some investments in community solar, our own community solar in terms of community solar gardens and being a major stakeholder or customer of those we’re talking about. Um, also helping support more gardens that will make it possible for low income folks. And we started some of those already that have been set up so that they can access that clean energy source. So we’ve definitely done that. We’re talking about what we could do with our infrastructure in terms of making charging stations more available in our parking ramps or maybe even in our right of way for uh, electrification of more vehicles, those kinds of things. I think we’ve actually got a pretty successful green cost share program where we’ll go out to businesses and we’ll try to give them some help in terms of financing if they’re gonna do installation or move towards kind of greener technology when some of that isn’t necessarily about climate. It might be about air quality and those things. But some of it is about energy efficiency, but maybe the benchmarking and disclosure things are some of the potentially bigger things that we’re doing. We are looking at possibilities of making it easier for people to do some kind of district energy. We have an interesting project and a um, we call it the tower side area of the city where we’re looking at a large district wide geothermal project. Um, so we are definitely moving in those directions and there’s probably more that we’re trying to move forward on as well. I think some day we’ll hopefully have a city owned solar project on our “water plant” we call it, out in Fridley, and potentially other places.
John Farrell We’re going to take a short break. When we come back we’ll ask what Minneapolis should do next and what advice the council member has for folks in other cities that may be choosing between a similar partnership or a city takeover.
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John Farrell So we’re at this interesting anniversary. It’s been five years since the agreement was signed, which of course just like this nice round number. But if I recall correctly, there was also kind of an agreement as part of the franchise discussion that was happening at the same time. So this whole conversation was really catalyzed by the expiration of the 20 year franchise agreements between the city and the utilities. And in the discussion about creating the partnership that 20 year agreement was signed as like a 10 year agreement. But I think there was a five year opt out. And so I guess I’m kind of curious, given your perspective on how the partnership has been working and maybe what sounds to me like a little bit of an imbalance between how much the city has been investing in progress versus the utilities. What do you think the city should do next? I mean, for example, should it consider coming back to this franchise conversation and this partnership agreement and revisiting it?
Cam Gordon Well, I think that we should, I think there’s opportunity that we could be doing a lot more. And I don’t know, it’s a hard call. And one of the things I don’t think we’ve done is figured out for ourselves and maybe as a community, not necessarily as a partnership, but for the city is what would we think would be the trigger when we’d say this is a failure. It took us a long time just to develop a set of clear metrics, which we put out in our last annual report and we can clearly see on the metrics that were failing in some areas, particularly in terms of reducing emissions from natural gas, but we could be failing without the partnership. It could be irrelevant to that, but at least we’re saying, well, we’re not making enough progress there, but I think this is a good time for us to be talking about as a community. How do we know that the partnership’s worth it and what do we need to change to make it worth it if we’re worried about it and when would the time be for us to say that it’s not working out and maybe we should consider municipalize again or some form of that. I actually think we’re much closer now where we could be our own producers of our own power and that could be acceptable, with this municipalization thing because right now, uh, especially with the electric [utility], as you well know, they handled the distribution and they also the production of the energy and they control all that in terms of their monopoly. But there’s been a little bit of inroads made since our first effort to municipalize in terms of community solar and solar gardens and these things. So we can build on those potentially. And also I talked about the district energy idea, but it’s a tough call.

So I’m trying to listen to the community and listen to others, listen to our own sustainability staff and also push the partnership board a little bit on some of these things to see if we can get more cooperation out of them. Some of the things that we’ve already talked about today, like energy disclosure in terms of when you’re buying a home or when you’re a renter or getting caught up because utilities are concerned about sharing information and what can landlords see and what could this city see and what’s good to others about energy use. And we saw at our last meeting for example, that they were pushing back on commitments we thought they’d made last year in terms of finding a way to share this kind of information so we could do the benchmarking accurately and people could be smarter about where they choose to live based on energy usage. So I think maybe what will happen in the next year or so will even be more telling, but it’s time for us now to be thinking about that really seriously. One thing about the franchise, we also said if we decide we want to revisit it, we have to give a year’s notice so that people have a chance to understand and maybe begin negotiating. And so right now at this point I think we should talk about changes that we’d need to make to keep going and we should be doing a serious evaluation of it. Probably each of the individual entities should be doing their own evaluation of it and seeing if they think that it’s worth it to them. And I hope that the city will be engaged in that and even the broader community in the months ahead.

John Farrell What advice would you have for other cities about doing a partnership like this? I know for example, one of my inspirations in the work that I’ve done as an advocate with the Minneapolis energy system, and as a resident, was in Boulder, Colorado, where they had a ballot initiative way back in 2011 to take over the utility company and they just got a recent, a ruling in the last couple of weeks that would allow them to move ahead with this process. But it’s still not a done deal. They’re going to still have I think, one more community wide vote in 2020 so it sounds like it takes almost 10 years in this example, and it’s the same electric company, ironically, Excel Energy that serves both Boulder, Colorado and Minneapolis, Minnesota and I was asked about a year ago to give feedback. They asked me to write a letter to the editor in the local paper there because there were some discussions about a clean energy partnership and I wrote something essentially saying, I’m not so sure you’re going to get what you want out of that. Municipalization gives you all of the choices and power and that a partnership is limited. And I guess I’m curious Cam, if you would have a similar perspective to offer folks in Boulder came to you and said, do you think the partnership is worth that or in other cities, because we’ve heard of other cities very interestedly asking about Minneapolis is clean energy partnership and saying, Hey, is that something that we should pursue if we have ambitious climate goals that we want to reach but we don’t own our utility company?
Cam Gordon Yeah, I’d say it’s very interesting and when we were looking at municipalization here, we were looking at Boulder and actually it was exciting that they were making some progress. I’ll say it’s kind of discouraging that there are still dealing with this 10 years later. One of the things I think people should think about when they’re creating these partnerships is how they make it an actual independent entity. So right now the clean energy partnership exists as a written agreement between the three entities. We’re not an entity in itself. We don’t have any staff, we don’t have any budget and so it’s not even really an independent thing. I think one of the steps we could take is if each of the members would contribute something or we could get some funding somewhere. So we actually had a staff person that was concerned about the partnership and the partnership being successful and that we as partners could help direct and hold accountable and guide. And if we had an a budget we could actually work with, I think it would be more effective. And that’s a piece I think we should have somehow worked in originally because right now, we meet and we all have our own staff that we go back to and until it, so even at the staff meetings, everybody comes with their own organization behind them, but there’s nobody coordinating and facilitating the work of the partnership itself. So I think that’s an issue. I also think that there isn’t any reason why both things couldn’t happen at once. So we obviously that here the partnership was a fallback for, for some of us when it looked like we weren’t going to be successful or it was going to be too expensive or too time consuming to pursue ownership of the utilities as a city. Um, I think we maybe, could have kept looking at that better.

Uh, and moving forward we have obstacles here because of state law and other things that would be impacting that decision. And in a sense, I’m concerned a partnership distracted us a little bit from that and said, Oh, we’re going to put all our resources here and work on this to realize our energy vision. And I would advise people that if they’re entering into the partnership and maybe they should, cause I’ll also note that having the partnership might’ve helped us make more progress than if we were just kind of battling in court and looking at, you know, what do we do to get control of over here and not taking a lot of action. But I would say that could look at it as something to do as well as continuing other good options and other ways to pursue things as you go forward. I will say that the city, what we’ve done is we’ve still marched forward building up our own staff, looking at how we could fund things and trying to address the climate crisis independently of the partnership as well as working in the partnership area.

John Farrell Yeah, and I think that’s definitely reflected in the both the financial and policy investments that the city has been making. It’s been impressive to watch all of the changes that have been made and in some ways a little disappointing that there hasn’t been more that has come out of deliberate collaborative efforts around those. I think you mentioned that energy disclosure piece in particular as one where it sounded like the utility was walking back a little bit. It’s promises to help the city with the inaction of that ordinance and that data, which is of course disappointing. I really appreciate what you said about this notion of kind of continuing to consider the options. Franklin Roosevelt famously said that municipalization was the Birch rod in the cupboard to discipline a utility that was behaving badly. I wouldn’t want to extend that too much to the partners here in Minneapolis, but merely to say, I think that your advice is one that has been passed down over generations that we don’t simply rely on the folks that we have, but we think about what the choices are that we have and that, so I think that’s very helpful.
Cam Gordon I’ve got one more bit of advice.
John Farrell Yes, please.
Cam Gordon Something I think we could have worked harder on and pushed harder on here is also as you’re developing the partnership, try to get allies in the state regulatory authorities and I think that we could’ve done a much better job of getting buy in from the public utilities commission and we’ve started getting some progress there. Now two years later, I’ve actually met with the commissioners individually, but I had them come to the city to learn more about it and when we did forum we did go over make a presentation and they were even interested and wanted to hear more. But we never kept pushing on that partly because our utility partners didn’t seem to want to and were nervous about it and resisted and perhaps we were being too kind or are willing to wait as things matured. But I think if we had had more support and then more pressure from the state regulators, that would have helped the utility companies take it more seriously and work harder.

And also I think it’s hard with large utility companies like that to get a real decision makers to the table. And I’m always confused about what level person are they getting to be on our partnership board and what kind of authority do they actually have. So the city has been sending the mayor and the chairs of committees in what we would consider our top level policymakers, the city planner is one of our members as well. And we’re getting um, vice-presidents or maybe second vice presidents from the utility companies. Sometimes people who are starting, they should try to get the CEO in the room or some high level and maybe higher levels. And we’re getting in our room to serve on the boards of these partnerships and that’s something I haven’t that we could still work on.

John Farrell Well Cam, thank you so much for sharing your perspective on this partnership. It still stands out as the only really prominent example of a partnership between utilities and a city around climate action. And it has been a lot of interesting stuff happen even if it’s not necessarily making the giant strides that maybe folks hoped for initially. But thank you for your continued work to give us more progress on that climate action.
Cam Gordon Well, you’re welcome and thank you very much for all your work on energy issues and all that you do.
John Farrell This is John Farrell, director of ILSR’s Energy Democracy Initiative. I was speaking with Minneapolis City Council member Cam Gordon about the five year anniversary of the nation’s first clean energy partnership between the city and its private monopoly energy utilities. Check out the show page for links to more coverage of the Minneapolis clean energy partnership and learn more about how cities drive local climate action and clean energy with the interactive community power map and community power toolkit. Both available from the Institute for Local Self-Reliance at ILSR dot org, that is I L S R .org while you’re at our website, you can also find more than 80 past episodes of the local energy rules podcast. Until next time, keep your energy local and thanks for listening.

A Desire for Change

In 2013, the Minneapolis Energy Options campaign began to question where hundreds of millions of energy dollars were going. Could the city keep more of this money in the community? Their campaign (which Farrell was a part of) fed into to talk of municipalization: taking over the private utility company. Residents of Boulder, Colo., had voted to municipalize Xcel Energy in their city in 2011 — so perhaps Minneapolis could take on that battle as well.

Although municipalization never made it to the ballot, the community-wide desire for energy democracy paved the way for the clean energy partnership. City Council member Cam Gordon, of Ward 2, was on the council when they signed the agreement in 2014. This partnership is an agreement between the city of Minneapolis, Xcel Energy, and CenterPoint Energy to work toward a climate action plan for Minneapolis.

The clean energy partnership was a compromise to the more ambitious municipalization route, but it is still revolutionary in its own right. It is the first partnership of its kind and pioneered a way for cities and utilities to collaborate. 


Read this post by John Farrell, written in 2014, for more on the beginnings of the partnership.


Successes of the Clean Energy Partnership

As Gordon describes, the biggest success of the clean energy partnership was getting people involved. Given the exposure from political candidates and news outlets, the community became more interested in local energy. The city created a community advisory group to maintain this involvement. The utilities, which Gordon said only came to the city for infrastructure and right-of-way issues, now have to sit down with the city four times a year. 

Despite how the partnership has brought the city together, Gordon says it’s unclear what other progress has been made.

The Partnership Fails to Deliver

Though Minneapolis has the utilities on its side, it is not on track to reach its climate action goals. One major hindrance is the city’s dependence on fracked gas. In an evaluation, Minneapolis staff found that the city’s greenhouse gas emissions were greater in 2018 than in 2017. Without the support of the utilities, however, there is only so much the city can do to kick its gas habit. In light of the evaluation, and reflecting on the clean energy partnership, Gordon says:

It really hasn’t given us much more control over our energy future… sometimes it feels like the city is still mostly doing all the work, the lifting, and we don’t have that much influence

When the city presses the utility to do more, Xcel claims that it can’t because of how widespread its rate base is; whatever it does in Minneapolis, it has to do for its ratepayers across eight states. Consequently, the utility has largely done only what is required. 

Alice Madden, of the advocacy group Community Power, chimes in on the subject. As she describes, not only are the utilities doing the bare minimum, but many of their actions at the legislature and regulatory committee directly contradict the clean energy partnership:

I can’t help but notice [the utility] introducing legislation that’s anti-rate payer, that’s asking rate payers to foot the bill for things like a nuclear plant cost overrun, or a new fracked gas plant, or going outside of the agreed upon process to purchase another fracked gas plant, or replace the coal plant with the fracked gas plant


See this video for ILSR’s testimony to the Minnesota Public Utilities Commission, who were reviewing Xcel Energy’s proposed purchase of a gas plant — outside of the integrated resource planning process.


All of this inaction, and even adverse action, leaves the city to reach its goals on its own. 

Together, Farrell and Gordon list many ways the city has worked to advance clean energy: a study on the clean energy workforce, a study on inclusive energy financing, the 2019 energy disclosure bill, the energy benchmarking ordinance, subscriptions to community solar gardens, and the half percent franchise fee increase in 2017. Gordon adds many programs he would like to see, including charging stations for electric vehicles and a district geothermal project.

So, if the city has done all of these programs on its own, has the partnership been a success? Gordon says that the city is struggling to draw any conclusions.

We can clearly see on the metrics that we’re failing in some areas, particularly in reducing emissions from natural gas, but we could be failing without the partnership.

Without any way to measure what would have happened without the partnership, at what point can you designate it a success or a failure?


Check out this 2016 post for ILSR’s analysis of successes and failures of the clean energy partnership on its two year anniversary.


What to Learn from Minneapolis

Gordon has many suggestions for cities looking to create a clean energy partnership of their own. 

Firstly, he suggests that the partnership should be its own entity with a staff and a budget. 

Second, he argues that work still needs to be done outside of the partnership. A clean energy partnership is not the end all be all, but rather one of many paths forward. He wishes that Minneapolis would have kept the option of municipalization on the table. 

Additionally, Gordon says that upper level executives from the utilities must be involved. As it stands, the city does not know who the utilities will send to the meetings. 

Finally, the city should find allies on the state regulatory committee from the beginning. Gordon regrets not involving the Minnesota Public Utilities Commission further, since they expressed interest at the start.


Listen to this 2016 podcast episode to look back at lessons learned in the first two years of the partnership


Episode Notes

The Energy Democracy Initiative’s prior coverage of the clean energy partnership:

For concrete examples of how towns and cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.

Explore local and state policies and programs that help advance clean energy goals across the country, using ILSR’s interactive Community Power Map.


Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.

This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update

Featured Photo Credit: Eric Wilcox via Flickr (CC BY-NC 2.0)

 

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Maria McCoy
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Maria McCoy

Maria McCoy is a research associate with the Energy Democracy Initiative. In this role, she contributes to blog posts, podcasts, video content, and interactive features.

Maria McCoy
Follow Maria McCoy:
Maria McCoy is a research associate with the Energy Democracy Initiative. In this role, she contributes to blog posts, podcasts, video content, and interactive features.