The first-in-the-nation city-utility partnership has been framed in Minneapolis, but can the city and its utilities really deliver substantive movement toward an equitable energy economy in the next two years?
It all depends on the workplan, and the grassroots team at Minneapolis Energy Options has delivered. (Disclosure: I serve on the board of Community Power / Minneapolis Energy Options).
Outlined in their draft proposal (to be discussed and improved by the city-utility partnership board) are nine ambitious yet achievable strategies for the next two years. The strategies will involve new city ordinances and utility program changes, and an unprecedented level of coordination between the partners, energy program delivery entities, and the residents and businesses of the city. It will mean one of the biggest coordinated grassroots efforts to mobilize the city to seize control of its energy future, individually and collectively.
What’s the best part of this plan? It’s all about local action. No state law or regulation made this partnership, just grassroots organizing. So why isn’t your city doing the same thing?
The Big 9 Two-Year Strategies from Minneapolis Energy Options
1. Residential Energy Efficiency
2. Rental Energy Efficiency
3. LED Streetlights
4. Affordable Community Solar
5. On-Bill Financing
6. Buying Rural Renewable Energy
7. Commercial Building Energy Challenge
8. Incentives for Green New Buildings
9. Residential Energy Bench-marking
Build off of the existing Home Energy Squad program, the Sustainable Resources Center low-income weatherization program, a pending CenterPoint Energy pilot project, and existing community energy projects to create a single, coordinated residential energy efficiency program that includes:
- Community-based outreach that uses targeted social marketing led by community groups with a long-term stake in sustaining engagement to secure broader and deeper participation
- A single home energy assessment program with direct-install components, recommendations for next steps, a standardized bid for recommended work, and support with implementation
- A set of quality contractors who will perform work on standardized bids with a quality assessment process
- Integration of funding sources so residents can go through one program and access funding sources based on income eligibility
- Integration with rental property programs (see item 2) and new financing strategies (see item 5)
Develop an integrated rental and multi-family energy efficiency program that will improve electrical and gas efficiency of both commons energy usage (whole building) and for individual units. This would include developing a strategy to engage landlords and tenants, a delivery program, changes to ordinances to require landlord action to improve efficiency, and incentives and financing (see item 5) to make action easy and affordable. Overcoming the split incentive problem (the landlord is responsible for building upgrades, the tenants often pay the bills) is a key consideration. For rental properties 1-4 units, program delivery should tie into the standard residential program (see item 1) with specific ordinance, financing, and incentives supporting action in rental properties.
While the City of Minneapolis is already transitioning to LED street-lighting on many of the streetlights it owns, the majority of the streetlights in Minneapolis are owned by Xcel Energy, with the City paying electricity and maintenance costs. Xcel and the city would develop a new relationship in which Xcel Energy would transition to LED bulbs with a new servicing agreement for the city based on reduced energy usage and maintenance costs. Other cities have found even greater reductions in street-lighting costs by matching LED streetlights with pole-mounted solar, and some utilities have used pole mounted solar as a peak demand reduction method. The partners would collaborate to identify if and how solar mounted on existing streetlight poles would benefit the city and Xcel.
The current Community Solar Gardens (CSG) model offers the potential for large numbers of Minneapolis residents and businesses to subscribe to community solar arrays and cut their long-term energy costs, but high upfront subscription costs or credit requirements for monthly subscriptions may limit participation to those with existing wealth. City-utility collaboration can ensure that this model benefits everyone by ensuring that subscriptions are affordable to low-income families with low upfront costs and that job training and economic development in solar energy benefits communities of color, which face severe disparities in employment. Components of a Minneapolis CSG program that ensures community benefit and equity include:
- Promotion and support to community groups representing low-income communities and communities of color helping them understand the opportunity, ID sites, and screen developers.
- On-bill financing of subscriptions through Xcel Energy (see item 5) so subscribers can both pay a subscription fee and receive their credit on their utility bill without a credit check.
- Engaging public finance partners, community banks & credit unions, real estate tax equity partners, and other capital sources to make lower-cost financing available to CSGs developed with community support, rates that generate savings, and engagement of economically marginalized subscribers.
- Requiring that CSGs in the city partner with on-the-job training programs and hiring equity groups to ensure representation by people of color on job sites.
Develop an on-bill repayment system for residential and commercial customers through the utility bill (gas side for insulation and air sealing, water heater and furnace upgrades, electric side for community solar, residential solar, and appliance upgrades) that does not require a credit check for improvements whose average monthly savings is greater than the monthly payment. Partner with public finance sources, community banks, and other capital sources to develop a lending source for this program. For projects that require long-term management by a service provider (such as community solar gardens (see item 4) or solar loans with servicing agreements), this system should allow direct repayment to the service provider through the utility bill. It would also be valuable to have a central loan fund administered either by the city or an existing energy loan manager like Center for Energy and the Environment that can manage loans for direct services paid back on-bill.
Develop a transmission and distribution rate and parameters through which the City of Minneapolis can contract with outside renewable energy suppliers to buy bulk renewable energy to cover city operations through Xcel Energy’s grid. The City’s contracting for such services should have a strong bias towards community-based economic development through clean energy, and partner with projects that directly benefit disadvantaged groups, such as tribal reservations or economically distressed rural communities. Xcel Energy should structure its rate as a role model for its emerging innovative business model as a platform for energy service delivery as opposed to monopoly electricity supply. As such, Minneapolis should be expected to pay the fair cost of transmitting and distributing clean energy and back-up power that it needs, but not the cost of dirty energy supply that is no longer needed because of this model.
The Commercial Building Challenge would engage all downtown buildings in a highly visible program that would encourage participation from all businesses. The program would ensure that all buildings owners are aware of all utility program offerings, would highlight successful buildings, would share best practices between buildings, and would use peer to peer marketing to more effectively motivate owners to take action. This program would use the city’s existing benchmarking process, data to track progress and incentives to motivate action from the utilities, and program support from local organizations. This could start as a pilot program similar to Duke Energy’s pilot in North Carolina.
Additionally, this and all programs targeting commercial property should include a program for coaching to help businesses successfully implement energy savings measures. This will address a current challenge that there are a great many incentives, financing programs, and service providers available for various business energy solutions, but many businesses, particularly small and medium-sized businesses, often lack the bandwidth to navigate these programs. A direct business energy coaching pilot program has been tested out as a partnership between the Lake Street Council, Latino Economic Development Center, and Metro Clean Energy Resource Teams and has been found helpful to get Lake Street businesses saving energy.
While buildings funded with State bond money are now required to meet the Sustainable Building 2030 standard (which requires buildings built in 2015 to use 70% less energy than standard), participation by private developers is voluntary, and developers are often unable to finance these improvements. The partnership could align city zoning and ordinance authority that can create incentives for improved building performance (for example Sustainable Building 2030 standards) with financing methods (see item 5) and utility incentives to make it easy for developers to build high-efficiency. St. Paul is already taking this on.
Minneapolis is one of a dozen or so leading cities in the nation to develop a commercial benchmarking ordinance, which over time has the potential to transform energy efficiency in the commercial sector. Minneapolis could do the same for the residential sector. Information about a home’s energy performance is sorely lacking in the market today, and few homeowners even know if their own homes have wall insulation, either at time of sale, or even after they’ve owned the home for years. Better information and bench-marking for homes could ensure that energy efficiency is incorporated into the market for homes, as well as provide critical information to new home-buyers, even before they buy the home, in order for them to plan energy retrofits from the initial stages of home-ownership. Such a bench-marking program could provide a systematic platform for Minneapolis to measure and achieve its goal of improving the efficiency of 75% of its existing housing stock.