Minneapolis Health Department Splits the Bill with Green Investors — Episode 121 of Local Energy Rules

Date: 13 Jan 2021 | 0 Facebooktwitterredditmail

To invest in energy conservation and clean energy generation is to invest in a healthier community.

For this episode of the Local Energy Rules podcast, host John Farrell talks with Patrick Hanlon, Director of Environmental Programs for the Minneapolis Health Department. They discuss Green Cost Share: a program that promotes public health by matching investments in solar and energy efficiency projects.

Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.

Patrick Hanlon: And I think the key for this whole program that you talked about, you know, being able to look up the data and show exactly where the money went. Exactly what you’re getting on return. Exactly how much you’re leveraging, how much investment you’re leveraging into these kinds of solutions. I think that has been a key from the beginning, you know, from the first place
John Farrell: Year 2020 hasn’t been kind to Minneapolis, but its climate and energy programs have been pushing the envelope long before it became the notorious site of the police killing of George Floyd. Patrick Hanlon, director of environmental programs for the Minneapolis Health Department joined me for this conversation in October, 2020 to talk about the city’s Green Cost Share program, one of several climate and clean energy initiatives and one that has disproportionately been focused on addressing racial inequality and energy. I’m John Farrell, Director of the Energy Democracy Initiative at the Institute for Local Self-Reliance, and this is Local Energy Rules, a biweekly podcast sharing powerful stories about local, renewable energy.

Patrick, welcome to Local Energy Rules.

Patrick Hanlon: Hey John, thanks for having me on
John Farrell: One of the things that has always attracted me to what Minneapolis is doing around clean energy, and with this cost share program, is the fact that you run it out of the Health Department, which I think for a lot of people seems sort of distantly related to clean energy. So I was hoping you could start off by explaining why does the Minneapolis Health Department care about clean energy and maybe also like what kind of brought you into this work?
Patrick Hanlon: You get that from time to time. And actually, you know, when you think about climate change, it’s maybe one of the biggest public health crises that we have on the horizon, or maybe with us now, um, from extreme weather events, uh, heat waves that are going to impact our seniors and vulnerable populations. But when you think about the spread of infectious disease or carriers of new diseases that move in as climates change or air quality, when you look at ground level ozone, that’s predicted to increase as climate change progresses, fine particulates that are going to be more common from issues like forest fires that are going on across the country, or even on the other side of the world. As you look at fine particulates and forest fires, it’s a huge public health concern. And so that’s why fortunately, you know, our Minneapolis council and the mayor really gives us that latitude to, and that drive to look at climate change with a public health lens. And so we look at it as, as part of our responsibility at a local level to be addressing climate change.
John Farrell: And what made you interested in this work? I have known you for a number of years, working with the city of Minneapolis and interacted with you around the clean energy work as a member of the city’s advisory committee to the Clean Energy Partnership, which has been covered in several other episodes of this podcast. What got you into it?
Patrick Hanlon: The Green Cost Shares program, we started this program as a way to address pollution issues at a local level, started off by actually working with dry cleaners, looking at perc (Perchloroethylene) in the dry cleaning. It’s a hazardous cancer-causing chemical that’s used in dry cleaning and we use the Green Cost Share program as an innovative approach to work with the industry. Instead of just coming up with a regulation, you look at small businesses like dry cleaners, that it, it was a tough investment for them to make the change and change their equipment away from perc. And so we use this program as a way to work with the industry and work with these small business owners to make a positive change. And we’re able to do that. We actually are the first city in the country to remove all of the perc from our dry cleaner. So all of our dry cleaners here in Minneapolis are perc free. And so that was kind of the first place that we got a victory, so to speak. And so we moved into other areas and other pollution sources working with local industry here. And then there was a natural segue into climate change and looking at energy efficiency and renewable energy and how we could address climate change. And then also the pollution, the other criteria pollution that goes along with energy use.


John Farrell: What else are you working on in 2020?
Patrick Hanlon: I was really surprised that, I thought we were going to see a lot of solar projects drop out and a lot of our energy efficiency projects drop out just with the economic crisis that we have going on. I was really surprised to see that a lot of these projects are moving forward. This is our second year of doing group purchase. So we don’t have the administrative capacity right now to be having incentives for every, to do, be doing contracts with every residential home here in Minneapolis who wants to put on solar. And so we have these group purchase programs where any solar provider can pull together a number of solar projects, residential solar projects, and then we’ll, we’ll put in incentives, incentive funding for that entire project. And so, you know, as I’m looking at, I’m kind of scrolling through our sheet here and it looks like we have close to a hundred group purchase projects that we have that are, that are going forward with a number of different solar providers. We track all of these different programs down to the kilowatt hours, production and savings and CO2 equivalent savings based on our local energy production for all of these projects. I’m looking at the sheets that we have for, for all of the projects here and kind of going through what we have going on. We have a number of multi-family energy efficiency projects in multifamily buildings, and those are typically hard projects to move forward because of that split incentive between the homeowner or the building owner and the tenants. And so we’ve been able to utilize this, uh, 4d affordable housing, naturally occurring affordable housing program that our art community planning and economic development department came up with. And we work in partnership with them.

So when these buildings, they get a tax incentive for having naturally occurring affordable housing. And when they agree to hold that building to at least 20% of their building to affordable rates for a period of 10 years, we come in on the end and we provide significant energy efficiency incentives up to 90% of a project cost. We’re leveraging 90%, including the utility rebates. You also have some, some pretty aggressive incentives for multifamily buildings. So we get up to a run of 90% efficiency or 90% incentive match to the building owner to put in energy efficiency projects into their building, with the assumption that those costs get passed on to the tenants that are in that building, because that’s how they, that’s typically how energy costs are passed on in a building is that heating and electric costs are passed on to tenants in a building. And so we try to really get at that split incentive through that program.

We have a number of our buildings that are in our green zones in 2020, you know, places like Do Good Diapers. It’s a diaper washing service in North Minneapolis. North Market is a, a local market up in North Minneapolis that they’ve been really working with Pillsbury United and a number of different partners up there to get that project going. And it’s not only a grocery store, but a, uh, community center where people can come and even their parking lot in the summer has a lots of different community concerts and farmer’s markets and activities for folks. So it’s really a community center and we’ve been working with them to get a solar project going on that building, uh, really excited to see that, that moving forward. Working with a number of nonprofits and especially in those, in those green zones, we have a lot of nonprofit partners that are putting up solar projects. So in total, in, uh, 2020 here, we have 250 applications that have come in and then around 300 total projects. And so that’s a significant increase from 2019. And that’s really what we try to do that, you know, even in a down year where we have an increase in projects and that’s really what we try to do with the program every year is, you know, keep, keep scaling and keep getting more projects and then playing that balance between getting CO2 reductions and then also utilizing that money to address inequities in the system.

John Farrell: Great though. Thank you so much, Patrick. I just think it’s so important. I think about a city like Denver has passed this sales tax and they’re thinking about now we’ve got this money that we’ve committed to do this work. How do we spend it? And to have a great example of how do we spend it is really important. And this is a great example of how they can do that in a way that it can make people across the political spectrum feel good about the money is being taken through a tax through a franchise fee, but it’s being returned to folks and helping to reduce energy bills and to reduce racial inequalities, all of this, I feel like super important. So I’m, I’m excited because when I publish this, I’m going to be like, Hey, Denver folks, listen to this podcast.
Patrick Hanlon: Absolutely. Yeah, that’s a, I think that’s the key to it is getting, get it back out into the community and get it invested into community solutions.
John Farrell: So yeah, let me offer a little context and that, you know, over 150 U.S. cities have made these pledges around clean energy to reach a hundred percent renewable electricity by some certain date, maybe it’s 2030, 2040, but a lot of them really struggle about how to get there. We’ve covered that a lot on this podcast and talk to folks from a lot of different cities. With this green cost share program, you’ve, like you said, you gave, I think a nice history there of the start of the program. I guess what I’m kind of curious about is could you talk a little bit more about how it’s helping city residents and businesses reduce their energy costs, but also address the city’s climate change pledge and renewable energy pledge?
Patrick Hanlon: So I don’t want to oversell this and say that this program alone is going to get us there. You know, the whole, the whole basis of the Green Cost Share program was really to leverage relationships and leverage other resources that are out there to help solve problems like pollution reduction. And then we’re using that same tool to help address climate change. And so we were fortunate to be, you know, that we have a utility partner through the clean energy partnership in Excel and Centerpoint who, um, you know, Excel, especially is setting some pretty ambitious, renewable energy goals and carbon-free goals, uh, that I think you’ve probably covered in some of your other podcasts and then working with the providers that they help support. And so like an energy smart or Center for Energy and Environment. So we work with all of our partners to really bring resources to the table, to help support small businesses, to support tenants and multi-family buildings by helping the, the owners improve the equipment. I’m sure you talk about that. Some of that split incentive that happens in multifamily buildings to help make improvements there. And especially in our low income buildings in Minneapolis, and then especially in our environmental justice communities or our BIPOC communities. And I can talk a little bit about that if you’d like me to.
John Farrell: Could you give a couple of examples of things that the green cost share program is funded just to give some people a sense. And then I suppose I should, just for folks that aren’t immediately familiar with that idea of the split incentive, you’re talking there about a situation where, for example, the landlord might be the one who owns the HVAC system, but the tenant is the one who pays the energy bill. And so you have this problem of the, landlord’s not really incentivized to upgrade it because they’re not going to see the savings from making investments in more efficient equipment. But yeah. Give us a couple of examples about, about how you’ve helped businesses or our residents do some of these changes, like how, how has the Green Cost Share program helping folks pay for these things? What kind of money is on the table for that? What are folks doing?
Patrick Hanlon: It’s off the top of my head, like projects that are going on right now. There’s a project in North Minneapolis. It’s a largely African-American community in North Minneapolis. They had a cooperative market built and we’ve been working with a nonprofit who helps put some of that together, Pillsbury United and a solar developer to get that project, to get a solar development up on that roof. We came into the Green Cost Share program and the developer has stated that that additional incentive funding, and I don’t have that number. I can actually grab it, but that additional funding that we brought in with the Green Cost Share program helps get that off the ground quite literally on top of their roof. And so they’re going to have solar on that, on that market, up in North Minneapolis, that market out there has been a great project to have. There was a, uh, called, uh, considered a food desert in that area for a lack of having a grocery store in that location in, in North Minneapolis. And so that’s going to bring some additional funding to the market, to the, to the cooperative up there.
John Farrell: I love that you are jumping right to, I can get you that exact number. And I think that’s one of the great things about the work that you’ve been doing with Green Cost Share is the fact that you track very closely how the money is spent and kind of what it’s leveraging in terms of greenhouse gas emissions, and other pollutants. Could you talk a little bit about that, actually? I don’t know if you have numbers handy, you always seem to, when I see you in some of the other public meetings, but kind of give us a big picture about like in a given year or maybe over several years, like what kind of impact is the Green Cost Share program?
Patrick Hanlon: Sure. So I’m trying to leave out the 2020 numbers cause we don’t have all of that data back in, but I were to add up 2019 through really through 2016, when we started doing energy efficiency and solar, we have about three and a half million dollars invested in projects. And then that’s leveraging about $30 million in projects and that’s giving us around $10 million in kilowatt hours of savings and then another additional 10 million kilowatt hours of solar production. And it’s around a thousand on low-income units served.
John Farrell: You talked about how the Green Cost Share program is funded. Like what, how is the city putting money into this program? And has that changed over time, either the source of the funding or the amount of the funding?
Patrick Hanlon: Initially the Green Cost Share program was, we have what’s called a pollution control registration that we charge businesses here in Minneapolis based on the potential impact or impact of the pollution that they contribute to the air, ground or, or water here in Minneapolis. So the funding for the program for the Green Cost Share program started through an innovative change that we made with our pollution control annual registration. In 2015, we started charging for, um, we started charging by the ton of criteria pollution here in Minneapolis based on the potential social impact of those pollutants. And so that was authored by then council member Jacob Fry brought that forward and authored that, that change in that initiated more funding to be addressing pollution here in Minneapolis with a justification of using those fees that we were collecting to help solve some of those pollution problems that we had in the city. So we had the program in pilot form since, uh, 2012, but that really gave us the justification to expand the programming. And then a few years later, we were able to work with, through the recommendations of the clean energy advisory committee. That is an advisory committee to our clean energy partnership. That’s a partnership between the city of Minneapolis and our utility partners Excel in center point. So this clean energy advisory committee had recommended a dedicated fee through our franchise fee. So we have a fee that we charged to both utilities that comes into the city and that we collect through the city for doing business here in Minneapolis, and they recommended using that as a tool to accelerate that the climate change funding even more and the Green Cost Share program was one of the programs that they recommended be scaled up or increased through the use of those, those fees. So that was another point at which our program accelerated.
John Farrell: How have you seen the Green Cost Share program help the city make progress on its goals, both in its climate action work and otherwise of eliminating racial and economic disparities and energy bills?
Patrick Hanlon: With the Green Cost Share program, when we were working on pollution reduction that that work kind of lend itself, lends itself to working in environmental justice communities, because typically where industry and residential neighborhoods were existing together is where you have a lot of those environmental justice issues. When we started moving into energy efficiency and solar, we take a step back every year and take a look at what are the weaknesses in the program? What do we, what are we not doing well? And one thing that we saw that we were not doing well with energy efficiency and solar is getting into those environmental justice communities. And there’s two communities, both in North Minneapolis and South Minneapolis that were, community groups came together, uh, facilitated with the city of Minneapolis and helped identify them as our environmental justice communities and those are called green zones. So we looked at our green zones and we noticed that we didn’t have a lot of projects in those areas. So we took a step back and said, well, you know, those are areas that have been recognized as having intentional under investment for decades here in Minneapolis. And if you go across the country, every major city is going to have areas like this with the red lining, the lease covenants that affected people’s ability to build wealth and own property in those areas. And so we looked at this as one small program where we could start making intentional investments in energy efficiency and renewable energy in those communities.

So we have additional incentives that go into those in North Minneapolis, South Minneapolis, they get higher priorities. So when we send them out to, we have a third party that reviews all of our applications and when we send them out to that, third-party part of their weighting criteria is if those, if those applications are in the green zones, they get higher priority and then they get a higher percentage match. And so going back, you know, after having those intentional investments and then doing intentional outreach, and those are really the two things that we at is our key to getting more projects in environmental justice communities or in BIPOC communities is having those relationships. And then also having that intentional investment in those communities. And so when we did that, we actually found that the projects were twice as likely to happen in those communities versus the rest of the city. And so we got a reversal on, on how the projects came into us.

John Farrell: Could you talk just briefly about the outreach component, just because I did an interview recently with someone from Portland, Oregon about their engagement strategy for the Portland Clean Energy Fund that was recently created to do, I think a lot of similar work as the Green Cost Share program, but there are a lot of other cities that have really struggled with figuring out how, how can you be intentional? Like, what does intentionality look like? How are you able to be successful at outreach to make sure these projects actually happen in the places where you want them to happen?
Patrick Hanlon: Right. Um, well, you know, I’d probably go along with, with some of that and I’m always critical of our own work. And so I would say we have a lot of work to do in that space. We have had a lot of success in working with our local community partners in South Minneapolis, working with the Lake Street Council in North Minneapolis and working with the West Broadway Business Association. And working with, I had mentioned before a project that’s going on in North Minneapolis with Pillsbury United is really just going out and meeting, you know, I have this motto of like being able to meet anytime, anywhere with an organization or with a group. And so, especially if they’re connected to other small business owners or, or other people in the community where they’ve built relationships. So really working with people who have already built those relationships and getting the resources in their hands.
John Farrell: We’re going to take a short break. When we come back, I ask how the Green Cost Share program intersects with other city climate and health initiatives, how the program has grown its funding, and what advice Patrick has for city leaders feeling cash strapped in their climate work. You’re listening to a Local Energy Rules interview about Minneapolis’s Green Cost Share program with Patrick Hanlon, Director of environmental programs for the Minneapolis Health Department.


John Farrell: So the city of Minneapolis has a lot of kind of interconnected sustainability work beyond this program. How does the Green Share fit in with other health department or city initiatives that are happening both around climate, but also around public health?
Patrick Hanlon: We look at this program is we’re always trying to leverage relationships out in the community with other programs that are the energy smart program that’s being supported by Xcel and the chamber of commerce, you know, and getting out and building relationships and leveraging resources. We, and anyone that works in the city or, or a bureaucracy knows you’ve got to do that internally as well. And so we’re always looking at ways that we can work with our CPED, which is our community planning and economic development group. They are well connected in with the business community. And so making sure that they’re aware of how we’re changing the program each year and what our timelines are every year. The sustainability office here played a crucial role in that clean energy partnership program that I talked about in organizing that and coordinating that and making sure that we’re aware of what’s going on from a legislative level, what kind of offerings that utilities are putting forward. And so keeping us in the loop and coordinating across the city, we really count on them to help us with that and connecting with other efforts that are going on around the city. And then also connecting out with, I mentioned that clean energy advisory committee, making sure that they’re facilitating those meetings and then getting that feedback to us on our, on our programming. So yeah, we’re all trying to work hand in glove and really play the right niches within the city. And then within the community, another program that we do for our low income residents is through our Lead and Healthy Homes program. That’s a HUD funded program for addressing lead poisoning in children and childhood asthma. Through that program, you know, when I came on board in 2014 or after 2014, 2017 HUD grant, we had around 136 homes that had cold hazards here in the Minneapolis area. And as you know, it gets very cold here and the HUD incentive wasn’t enough to be able to get any of those projects to move forward. We had people come through with assessments and through the Lead and Healthy Homes program, we serve predominantly majority low income households. I think it’s around 87% of the households that we work with are low income. And so another program that we started is to ensure that every one of those homes, or our goal was to eventually get to every one of the homes that go through that program. We do deep energy retrofits and through the use of the franchise fees, we’ve been very fortunate to be able to use those fees, to address other issues that utility programs can’t typically cover. Like if we go into some of these older homes and there’s not been to wiring, we’re able to help use some of this funding to address those issues as well. So it’s allowed us to be able to get deep energy retrofits in these low income homes that ordinarily would get would not get any of this work done, just because of the folks that don’t have any, any money to be working with to do this. And then of course, it’s saving them on their utility bills on the backside.
John Farrell: So there are a lot of cities, as I mentioned before, that have made a 100% renewable electricity pledge and Minneapolis has that goal by 2030 city-wide. So that includes residents, businesses, and municipal buildings, as well as a goal to generate 10% of its electricity locally. You kind of alluded to this before that it’s not enough, but, you know, can the Green Cost Share program meet that demand? Or what more do you see as needed in order to help the city get to those ambitious goals?
Patrick Hanlon: You know, I would say we’ve, the green cost share program alone cannot can’t hit those goals. Um, you know, like we need to be working like I’ve said in partnership with the utilities and having them pull a lot of, a lot of that weight, however, the Green Cost Share program can be scaled up fairly significantly. Every year we are out of, we are oversubscribed for the program. We have more people wanting to get projects in than we have funding to be able to support projects and demand that’s out there. Um, and so, especially as you know, the utilities they’re talking about putting additional investments in 2021 on the rebuild and recovery that’s going on. Yeah. There is definitely, uh, an ability for us to scale this program up and so that we can play a significant role in helping to hit that 10% of renewable electricity and locally, and to help hit that a hundred percent renewable electricity pledge, especially as you know, there’s going to be a lot of electrification going on as you well now with vehicles and possibly and heating of homes. And so as that electrification happens, that Green Cost Share program can play a role, a significant role in helping to meet that, that demand. And to meet that change. The prompt for this bigger question here was can the Green Cost Share program meet the demand of the city’s goals of a hundred percent renewable electricity and 10% locally, Right? So, you know, it has to be in partnership with the two utilities. We need them to pull a lot of weight. Um, but the program could be scaled up very significantly. It’s already oversubscribed.
John Farrell: So Patrick, could you explain a little bit more about when, you know, when you say the program is oversubscribed, what are some of the things that you imagine that you could do if it was funded more substantially?
Patrick Hanlon: I think about, you know, when I, when I say the term significantly, but we could use this program to significantly impact those goals. I always try to think of that in real terms is by using today’s examples of where we’re at and how we can scale to hit some of those larger goals. So to give you an example, I’ll use 2019 as a good example of just because 2020 is a difficult year to, uh, for anyone to use as a benchmark. Although we are still moving forward with a lot of projects here in 2020, but in 2019, we had 173 project sites applications, and we invested $2 million of investments. And that was between the city of Minneapolis funding, with this franchise fee funding, department of energy funds, We have leveraged some grant funds. We really try to scrape together whatever funding we can bring together to make all these projects happen when they come in. And then we had about 15 million, almost $16 million in total projects that, and that includes rebates and federal credits, the state solar incentive that matched some of the private investment in these projects. And that gets us to about 5,483 tons of CO2 annually. So that’s taking, uh, offsetting a significant amount of carbon emissions with, uh, electrical in with kilowatt hour savings.

And then with therms, those funds that we use, and I believe I mentioned this, but those funds that we use are predominantly focused in BIPOC communities. Those are the highest priorities. That’s where we have the highest matches. And we call those areas green zones here in Minneapolis. Those are environmental justice communities. In 2021, where we’re looking at, as you’re talking about moving this program forward, we’ve always got to be conscious of the situation that we’re moving into. And so we’re going to be dedicating our 2021 funds on rebuilding and recovery efforts from the pandemic and the unrest due to the killing of George Floyd. A significant number of buildings that were damaged in that process. And then also that the unrest around black healing came from a lot of inequity issues here in, in Minneapolis. And so how do we use, as this is a small program, but how do we, how do we start focusing that money intentionally in those communities? And so, you know, in this time as we’re, re-investing these funds, as we’re redirecting these climate action funds, how do we, how do we use that money to reduce the energy burdens and how do we use that money to help build wealth? You know, as we talk about the different solar projects and energy projects, how do we ensure that the workers who are part of those projects and the BIPOC-owned businesses that do solar installations and do energy efficiency projects can access these funds to benefit their, their communities. And so that’s the intention in 2021. And from those projects that I mentioned, those, so those 2019 projects that I mentioned, those will create about $20 million in lifetime energy savings for homeowners, renters, and businesses. So we’re leveraging lifetime savings and that, you know, makes those, not only saves those communities money, but also makes them more resilient to some of the economic changes when events like 2020 happen. And so those projects that I’m mentioning, those 173 projects that happened in 2019 are those are only solar direct investments in solar installations, energy efficiency projects from projects like combined with smart controls. And that’s utilizing those franchise fees to leverage those projects here in Minneapolis. But we also have other projects going on. We work in partnership with our other city departments, like the sustainability office and Center for Energy and Environment, who’s a local service provider. So they have home energy squad visits, low interest loans. We’re doing intentional evaluations of our low performing energy benchmark buildings, is our large commercial and our large residential buildings here in Minneapolis. And those buildings make up about 50% of our city’s commercial carbon and residential footprint. So those are huge carbon potential savings in, in those buildings. We have gap financing programs, we’re looking at innovative approaches and low-income passive housing.

And so I say all this to say, you, you asked about, you know, what’s the ability of this program to scale up. So if you add all those programs together, we have around 5,500 tons of CO2 emission reductions annually. And then with those other programs, I’d say you could conservatively say we have another thousand tons in reductions that we get from those other programs. So that’s an additional 5,000 to 6,000 tons of CO2 that you’re getting annually. And if we look at these at this program and we’ve looked at ways that, you know, how is this, how is this money and how are these programs leveraging change in behavior? And unfortunately for, and you can decide to keep this or not, but unfortunately we’ve done some, uh, some comparisons with, you know, our local well neighbor here who is in the same market, working with a lot of the same utility programs. And so looking at when we started these programs and specifically looking at solar, we’ve seen a 290% increase in the difference between ourselves and St. Paul from the time that we started these intentional investments in solar. So you can really see, and I wish I could share a graph on a podcast. You can see the, as soon as we started these programs, how Minneapolis took off in a different direction in the number of solar installations that are going on in Minneapolis. And really the only difference is these intentional incentives directed towards solar investments. And so that’s one example in one area of how these, how this money is reinvested, and then, you know, that 6,000 tons, that’s all, 6,000 tons CO2 reduction, That’s all working with only a 0.5% increase in the franchise fee that we’re reinvesting. And so let’s hypothetically say that you were to increase that, that franchise fee amount from 0.5% to 3%, when you’re talking about a six fold increase in the reductions that you’re going to get, and let’s say conservatively, that you could get 25,000 tons of CO2 reductions annually.

Well, that’s more than just significant, that’s game-changing for a city the size of Minneapolis. You really start to bend the curve down towards hitting your 80% reduction goals by 2050, if you can maintain that level of reduction. And of course, that’s going to take changing what that program looks like as technology changes as where you can get your CO2 reductions change. But if you’re going by what, we’re, what we’re currently getting in our reductions, in the work that we’re doing here in Minneapolis, a slight increase in this programming and I say slight, because you’d be going from 0.5% to, uh, something like a 3% increase. And this is all hypothetically speaking, but just to give the idea of how this program could be leveraged up. And then we also see that this program is, has so much demand every year that we can grow this program pretty exponentially and, and fairly quickly that we’d be able to we’re we’re out of funding. You know, the, our, our application process starts in, usually in December, we’re going to be working in January this year for the 2021 schedule, but we’re usually out of money by February and March of every year. And we have lots of projects and we have to do intentional outreach to contractors to let folks know that we don’t have any more funding in this program. Another area that will help this, all of this work in energy efficiency and solar, the ability for us to scale up is to be creating the workforce that can do this work. We already have backlogs in our home energy squad visits. We have the amount of contractors and, and evaluators that are available to do this work. So that’s one of the challenges that we’re going to be working with. A lot of our, our local partners here and our utilities to help address what does that, how do we increase that workforce? But when that workforce is there, we’ll be able to move forward with a lot of programs. And there’s a lot of potential out there in, in Minneapolis to get energy reduction, to get CO2 emission reduction.

John Farrell: More than happy to keep the section about the, uh, advantage that Minneapolis has over St. Paul as a Minneapolis resident. But also it’s a, you know, let’s juice it a little bit over there in St. Paul and see what we can do to catch up. I mean, the beauty of this franchise fee is that it is in the power of the city to address. And, you know, we’re seeing other cities find resources and lots of difference in interesting ways, you know, Seattle’s taxing high payroll employees at big companies, Portland is taxing the large retail companies, Denver, Colorado. They just had a ballot initiative and passed the sales tax increase for $40 million a year for climate initiatives. And, you know, you talk about making a six fold increase in the franchise fee, and that would just get you to, you know, 15 or 20 million. And here’s Denver coming out of the gate with twice as much as that already. So I think they’re, you know, really big opportunities there.
Patrick Hanlon: Right? Well, and I mean, and that’s why I want to do this podcast. I mean, that’s why I was, I was really excited to sit down is I would love to see other cities, I’d love to see St. Paul doing something like this, where they can be. And I think the real key is investing that money back into the community, right? Is like getting that money and investing it back into the, into solutions In ways that people can build wealth and save money.
John Farrell: What is the size of the budget for the Green Cost Share program right now? And when you talk about it being oversubscribed, how much money do you think it would take to meet the current need? Like what you’re getting in terms of applications and oversubscription, but is there any limit to how much you could put into this and still find it useful?
Patrick Hanlon: It’s always tough when I don’t want to be making it, we’re right during budget time here. And so I don’t want to like put myself in an awkward position, like I’m requesting this, but hypothetically as we’re, you know, or we had a funding source to be able to assist all the projects, I think that Green Cost Share program could easily, easily be doing three or four times what it’s doing right now, you know, and we’re operating. And when you say, what is the budget each year, each year, we’ve got to go back and make that request to working with around 1.5 million. I would say we could probably be doing easily five or 6 million a year in projects leveraging that probably seven or eight to one.
John Farrell: That seems to be the key element of this. That is, you know, the city is getting a lot of bang for its buck because you’re getting all sorts of private investment that is matching the public investment. And I think it speaks really highly to of the program. As you said, it’s a work, always a work in progress, but the fact that you already have kind of a two to one focus on serving folks in the green zones suggest that, you know, you’ve, you know, you were, you just referenced for example, that utilities are interested in scaling up their investments around rebuilding, which of course is the rebuilding from the property damage that was caused, uh, concurrent with the protests about George Floyd. So obviously racial equity was very much on the minds of folks in Minneapolis. So it really does speak highly of this program that scaling up that investment could be disproportionately serving these communities that have been underserved, which I think is pretty important with that in mind. I, Patrick, I’m kind of curious what advice you would have for cities that are trying to address the same challenge, right? They’re trying to think about racial equity. They’re trying to think about economic stimulus in a time of COVID. They’re dealing with climate change and renewable energy targets, but they often think they don’t have the financial resources to do things. What would you say to that given the structure of the green cost share program and how it’s been financed?
Patrick Hanlon: When we started this program, or maybe even just a little bit before we started this program, I think the only piece of equipment we had in the office, or even, you know, resources to be able to use was a non-data logging noise monitor, and that we hadn’t, that we could go out and, you know, regulate off of, uh, noise pollution in Minneapolis. And so we did not have a lot of resources to be working with. And so we were in that spot and I think the key for this whole program that you talked about, you know, being able to look up the data and show exactly where the money went, exactly what you’re getting on return, exactly how much you’re, how much investment you’re leveraging into these kinds of solutions. I think that has been a key from the beginning, you know, from the first project that we did for $20,000 with a local dry cleaner, who took, really took a chance on us. And it’s in this program too, that we’re able to show that we got rid of 1200 pounds of perc in their facility and we’re able to clean the air. And then we’ve just taken that concept each time and being able to measure the results and really show it’s about helping people to meet these challenges, helping having everyone in our city be helping us work towards meeting these challenges. And so it’s been about being good stewards of that funding and really working with people in our community to help solve this, this problem of climate change and, and helping them overcome the challenges that they have.
John Farrell: Anything else that you would want to share with folks from other cities who are kind of struggling through some of these same challenges, public health crises, climate crisis, all at the same time?
Patrick Hanlon: One thing that’s surprised me this year, I was anticipating a lot of our projects to, or all of our projects and solar to drop out. The solar industry is still going ahead and we still have a lot of projects going. So that’s given me a lot of hope through this pandemic. You know, when this started, we were doing a lot of mass distribution, getting hand sanitizer out, getting, setting up, we’re still setting up testing events right now. I have 60% of my staff working on that. So this whole program has given me a lot of hope for what’s on the other side of this is. Being able to look at the horizon, I’ve said this before, but being able to look at the horizon and look to the future and see that, you know, not to sound corny, but it’s bright, but it is the solar industry is still moving ahead and renewable energy is still moving ahead. We have the energy efficiency projects are still moving ahead. And so it just gives me a lot of hope for what’s 2021 and beyond.

Another thing I just wanted to add into this is I said, we took a step back every year and take a look at our program and say, you know, like, what are we, what are we missing? What are, what aren’t we doing well? And I think that you, you talked about environmental justice. That’s always an area we have to pay special attention to and be really intentional about. And I think we still have a ways to go to be really good at that. But the other area that I would say is workforce. You know, we went up on the, a lot of the roofs in North Minneapolis and South Minneapolis, and we were really happy that we’re getting projects in those environmental justice communities, but the workers on those routes didn’t represent the community that they were, that they were in, you know, that having these pretty well paying jobs up on those roofs. So that’s one area that we’re working on right now is setting up a solar training program. And we’ve been working with our local electricians union 292 to working with Summit Academy, working with a local entrepreneur here, uh, Jemez Staples in working out of his building and setting up the training. So to ensure that we have people from the community that are, that are taking part in this wealth building, that you look at a job on a roof or solar, a solar project at, you know, if it’s $19 an hour, $25 an hour, that’s twice the area median income of North Minneapolis. And so we can get even a handful of people each year added to those jobs, those well-paying jobs, that’s, that’s going to make a good difference in, in the community. And this will help make this Green Cost Share program more of a wealth building tool as well, not only a climate action tool.

John Farrell: Patrick, thank you so much for taking the time to talk to me about Minneapolis’s Green Cost Share program and for your work and, and making it racially equitable as well as a successful climate program.
Patrick Hanlon: Thank you, John.
John Farrell: Thank you so much for listening to this episode of Local Energy Rules with Patrick Hanlon, director of environmental programs for the Minneapolis Health Department recorded in October, 2020. On the show page, look for links to the Green Cost Share program dashboard and interview with city council members Cam Gordon about the city’s clean energy partnership with its utilities and links to other interviews and stories about cities using their local authority to generate more funding for equitable clean energy work. On our website, you can find our community power map of all cities with 100% renewable energy goals like Minneapolis and an interactive community power toolkit for stories on how cities have advanced toward their goal with new funding and new strategies. Local energy rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear more powerful stories of communities taking on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.

Clean Energy, the Environment, and Public Health

Green Cost Share was established “to create a cleaner, healthier, and more sustainable City of Minneapolis.” Hanlon directs the program out of the Minneapolis Public Health Department. Previously, he has advised the city’s Clean Energy Partnership.

A sustainability program run by the health department may seem like an odd match, but Hanlon explains how climate change poses a serious risk to public health. Whether it’s heat waves, air pollution from wildfires, or an expanding territory for disease carriers, the consequences of climate change are dire.

The Minneapolis Green Cost Share program helped dry cleaners eliminate “perc” (Perchloroethylene), a cancer-causing pollutant, from their operations. Now, Green Cost Share funds are directed toward clean energy generation and reducing energy consumption. This includes solar group buys, installing solar on community centers, and energy efficiency audits for affordable housing.

How Does Green Cost Share Work?

As described by the City of Minneapolis, “Cost Share offers matching funds for commercial, industrial, multi-family, and single family properties undertaking an energy efficiency, solar, or innovative pollution reduction project.”

The Green Cost Share program collects funds from two sources: a fee on pollution and the utility franchise fee. The pollution fee is an annual fee companies must pay according to the social impact of the pollution they create. The franchise fee, assessed on customer bills, is the fee Minneapolis collects from the utility to do business in the city. In 2017, the city increased the franchise fee by half a percent.

Cost Share, when combined with other rebates and federal incentives, may cover up to 90 percent of project costs. This deal is crucial for retrofitting rental housing; since tenants pay the heating and electric bills, property owners have very little incentive to invest in efficiency.

We work with all of our partners to really bring resources to the table, to help support small businesses, to support tenants and multi-family buildings by helping the owners improve the equipment.

Read more about the Minneapolis franchise fee and the Clean Energy Partnership in this blog post.

Public and Private Partners

Hanlon hopes that Green Cost Share can build on work that is already underway. For this reason, his department works with other city departments, like the sustainability office, clean energy advisory committee, and the community planning / economic development department. 

Green Cost Share also works with community partners in Minneapolis, including Lake Street Council and the West Broadway Business and Area Coalition.

We’re all trying to work hand in glove and really play the right niches within the city.

Concentrating Impact Where it Counts

Between 2016 and 2019, Cost Share invested 3.5 million dollars in energy efficiency and solar. These investments have built 10 million kilowatt hours of solar capacity and served 1,000 low-income households.

Serving low-income households is not enough. Reducing pollution means working in environmental justice communities, says Hanlon, where pollution is most concentrated. This is why Green Cost Share is honing in on the Minneapolis Green Zones: communities identified as facing “the cumulative effects of environmental pollution, as well as social, political and economic vulnerability.”

As we’re redirecting these climate action funds, how do we use that money to reduce the energy burdens and how do we use that money to help build wealth?

After prioritizing Green Zone investment through the Cost Share application process, projects in Green Zones now have twice the approval rate as projects elsewhere.

Cost Share Could Do More

Green Cost Share alone won’t get Minneapolis to its ambitious 100% clean energy and 10% local clean energy goals. Still, Cost Share could be scaled up. The program often runs out of funds by February or March, says Hanlon.

In 2019, Cost Share contributed to 173 projects and 5,500 tons of reduced carbon dioxide emissions. If the franchise fee were increased from .5 percent to 3 percent, says Hanlon, the benefits would also multiply by six. There is more than enough demand, but not enough money.

That’s more than just significant, that’s game-changing for a city the size of Minneapolis. You really start to bend the curve down towards hitting your 80% reduction goals by 2050, if you can maintain that level of reduction.

Episode Notes

See these resources for more behind the story:

Other cities with innovative climate action funding:

For concrete examples of how 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.

This is episode 121 of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.

Local Energy Rules is Produced by ILSR’s John Farrell and Maria McCoy. Audio engineering for this episode by Drew Birschbach.

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: Bilanol via iStock

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Maria McCoy

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