CUB’s report on the 2023 legislative session: Major victories for clean energy and utility consumers

By now, you’re surely aware that 2023 was the most active Minnesota legislative session in memory – and climate and energy policy was no exception. The legislature passed dozens of provisions aimed at reducing Minnesota’s greenhouse gas emissions and speeding the transition to clean energy. 

It’s not possible to summarize every legislative change that happened this year in one article. The climate and energy provisions contained in the environment omnibus bill alone are nearly 150 pages long, and that bill doesn’t include everything that was passed. However, I’d like to highlight several new energy laws that will directly impact Minnesotans and utility consumer advocacy.

100% clean electricity by 2040

The headline energy policy of 2023 was passed very early in session: a new law requiring utilities to reach 100% carbon-free electricity by 2040. You can read more about this law in my February 3 post. 

Intervenor compensation: Expanding public-interest representation in utility regulation

This nerdy-sounding bill is incredibly important for improving equity in utility regulation. Championed by Rep. Athena Hollins and Sen. Tou Xiong, the intervenor compensation bill allows Tribal nations and qualifying nonprofits to be reimbursed for costs related to participating in proceedings before the Public Utilities Commission (PUC).

The PUC determines electric and gas rates, the sources and locations of energy resources, the structure of utility programs, and much more for the investor-owned utilities that serve most Minnesotans. By law, the PUC makes decisions based only on the evidence and arguments presented by participants in each proceeding. However, proceedings are extremely complex, and it’s expensive to meaningfully participate. Utilities and other well-funded parties are well-represented, but the interests of Minnesotans are often not – especially low-income, BIPOC, and other Minnesotans who are hardest hit by energy costs and pollution. 

State law previously allowed for limited intervenor compensation in PUC cases in which utilities sought to raise their base rates. This was helpful but covered only a tiny fraction of the important decisions made by the PUC – and even excluded the majority of proceedings that raise costs on ratepayers. 

CUB has pushed for an update to this statute for three years, with help from the Energy CENTS Coalition, and we were thrilled to see it cross the finish line this year.

Unfortunately, a “sunset” (or end date) was added to the bill. In 2031, the improvements to intervenor compensation will sunset, and the program will revert to its previous state. CUB will work hard before then to make this year’s changes permanent. 

Rebates and discounts

Minnesota will soon offer rebates for residential heat pumps and electric vehicles, as well as grants to homes and apartment buildings to upgrade electric panels. (These upgrades can be needed in older homes and/or to add room to a breaker box to accommodate  new electric appliances or vehicles. The new state discounts can be combined with federal incentives to reduce – or maybe even eliminate – costs. 

Information about who can access these incentives and how to get them will be available soon from the Minnesota Department of Commerce.

Home weatherization

The legislature appropriated nearly $40 million to weatherize homes of income-qualified households. Weatherization improvements (such as improved insulation; air leakage reduction; and the replacement of old furnaces, boilers, and water heaters) improve a home’s comfort, reduce greenhouse gas emissions from wasted energy, and can lower household energy bills by as much as 30%.

State funds will supplement the federal Weatherization Assistance Program, as well as provide “pre-weatherization” services to address issues (like replacing old knob and tube wiring or removing vermiculite insulation) that prevent weatherization improvements. State funding will also support workforce training to address the need for more qualified professionals in the field.  

Reaching zero greenhouse gas emissions by 2050

It is now the goal of the state of Minnesota to reach net zero greenhouse gas emissions economy-wide by 2050. Previously, the state’s goal had been an 80% reduction by 2050. The electricity sector is off to a strong start and must reach net zero by 2040; more progress is needed to decarbonize buildings (including the use of natural gas and other fuels for heating, cooking, and other purposes), transportation, agriculture, and industry.

A new energy benchmarking program

The metro area and larger cities statewide will soon have an energy benchmarking program that will make building energy use transparent to building owners, renters, prospective property buyers, and the public. The state will create a program to report energy use information in buildings over 50,000 square feet in the seven-county metro area and in all Minnesota cities with populations over 50,000 people that are served by investor-owned or municipal utilities. The state will provide an annual ranking of properties based on their energy use intensity.

This puts into law many elements of the standards regarding access to aggregated energy use data that CUB has won at the PUC. (We’ll have an update on recent progress in this effort coming soon!) 

And much more

The omnibus also includes many other important provisions that CUB supported, such as:

• A dispute resolution process for utility customers whose complaints are not fully resolved by the PUC consumer affairs staff.
• A modification to the definition of “low-income household,” which determines who qualifies for utility low-income conservation programs. This was a needed fix to prevent currently eligible households from being disqualified.
• Funding to allow the Clean Energy Resource Teams (CERTs) to continue to help communities around the state advance local energy goals.
• Full funding for the PUC and Department of Commerce’s energy section, which is needed to implement energy-related legislation. (Relatedly, they’re hiring.) 

Gas utility infrastructure cost rider extended

Unfortunately, the omnibus bill also continued something called the Gas Utility Infrastructure Cost (GUIC) rider. This allows regulated natural gas utilities to pass the costs of new pipelines and other infrastructure onto customers through frequent rate increases. These rate adjustments are recovered through a rider (a line item on customer bills) rather than base rates. At the PUC, these rider increases are evaluated separately from base rates, so it is difficult for the PUC, advocates like us, and the public to understand the full impact of rate increases. Riders allow utilities to pass costs onto customers more quickly, lowering risks for utility companies and shifting risks to their customers. Recovering a large amount of costs through riders can make it more difficult to scrutinize whether investments are truly in the public interest. The GUIC rider had been scheduled to expire this year; it is now authorized through June of 2028. 

Proposal to increase Energy Assistance funding did not pass

A proposal spearheaded by CUB to expand the Energy Assistance program was left on the table. The bill would have provided assistance to more Minnesota households and kept the program open year round. Despite broad, bipartisan support, there were simply too many priorities competing for limited funding and attention this year. We plan to continue to work with the bill’s authors, Rep. Larry Kraft and Sen. Scott Dibble, and legislative leadership to seek some or all of the requested funding in 2024. 

Phew! Even this long list is only a sampling of the actions that the legislature took this year on climate and energy. You can view the omnibus bill in its entirety here. (The bill is HF2310; Articles 10-12 address energy and climate policy.)

CUB will continue advocating for affordable utility service, consumer protections, and clean energy for all Minnesotans. For the latest updates on our future legislative advocacy and more, subscribe to our email newsletter or find us on Facebook and Twitter.