Legislative Update: Bills advance to protect renters and expand clean energy options
The legislative session is well underway, and as always, CUB has been tracking energy-related bills to ensure ratepayers’ interests are represented.
Last Friday was the legislative “deadline for committees to act favorably” on policy bills in both the House and Senate. (Major appropriation and finance bills face a separate deadline, on April 19. This will include spending from Xcel’s Renewable Development Account but little else in the energy sphere this year.)
Here are updates on some bills that we are watching this year.
Protections for renters whose utilities are billed through third-party companies
Many renters are billed for electric, gas, and water service by their landlord or a rebilling company, rather than directly from the utility service provider. Those renters do not have the protections guaranteed to utility customers under the law, such as shutoff protections and the right to reasonable payment arrangements.
A bill championed by the Legal Service Advocacy Project of Mid-Minnesota Legal Aid provides many of those protections (HF4558-Hollins, SF4579-Dibble), including:
- A landlord cannot charge a rate to tenants that is higher than the rate charged by the utility.
- Tenants pay only for electricity they use, and may not charge more than a small ($8) administration fee, which is in the range of the monthly residential service charge from Xcel and CenterPoint.
- Landlords are required to offer payment plans for the payment of arrears. Those plans must take into account each renter’s financial circumstances and any extenuating circumstances of the household.
CUB has been working with Legal Aid on related issues for several years, and we support this bill.
The bill received hearings in the House and Senate and met the deadline.
Updates to the Energy Conservation and Optimization Act
By law, utilities are required to offer energy conservation incentives to their customers. (This is the origin of the appliance rebates, discounted energy audits, and similar measures provided by utilities that many people are familiar with.) In 2021, the legislature made major updates to this program, including allowing utilities to promote fuel switching: helping customers switch to more efficient, lower-emission sources of energy.
This year, the Center for Energy and Environment (CEE) has worked with utilities and others to put forward a package of mostly technical updates to that law (HF4574-Stephenson, SF4562-Rarick). The bill also allows, for the first time, investor-owned electric utilities to receive a financial incentive for helping people switch from fossil fuels to electricity. CUB is very supportive of this “beneficial electrification;” we advocate for increased opportunities through the PUC, and we frequently consult with homeowners considering making the switch from fossil fuels to electric heating and appliances. However, electric utilities already have an inherent financial incentive to increase electric sales, and we were concerned an additional incentive would be unjustified.
CUB worked with CEE to find a compromise that puts reasonable parameters on these incentives and ends them after 2032, and we support the bill.
The bill received a favorable hearing in the House. At the author’s request, it was laid over in the Senate energy committee to provide more time to work through a disagreement related to the participation of pipeline pumping stations in the ECO program.
Support for thermal energy networks
A number of bills this year would explore or advance the use of thermal energy networks to heat and cool homes and businesses. Thermal energy networks connect buildings via underground pipes that circulate water to provide heating and cooling to buildings, like the district energy systems in downtown St. Paul and Minneapolis. Existing thermal energy networks are sometimes heated by combustion (such as burning natural gas or wood), but powered by waste heat (e.g. heat recovered from a wastewater treatment facility) or geothermal energy, thermal energy networks can meet buildings’ heating and cooling needs with zero-carbon energy. They also require substantial infrastructure that a utility might own and manage, similar to gas utilities’ current pipe systems, as well as similar construction and maintenance jobs.
HF4688-Hemmingson-Jaeger, SF4687-McEwen directs the Public Utilities Commission to convene a working group and produce a report on opportunities and barriers to the deployment of thermal energy networks. CUB supports this bill, and we expect to serve on the working group if the bill passes.
HF4423-Stephenson, SF4760-Mitchell adds requirements for thermal energy network pilots into future Natural Gas Innovation Act plans. It also directs the Department of Commerce to conduct a study regarding sites that are suitable for such networks. This bill is being spearheaded by the 100% Campaign. CUB supports the effort, has provided suggestions to the 100% Campaign on bill language, and expects to continue to be involved with ongoing discussions if the bill moves forward.
Both bills received hearings in the House and Senate and met the deadline.
Ratepayer protection and limits on utility executive compensation
Representative Emma Greenman and Senator John Marty are carrying a pair of bills to protect Minnestoans from charges that are likely to advance a utility’s business interests over the interests of ratepayers.
The Ratepayer Protection Act (HF4292, SF4426) prohibits for-profit utilities from charging ratepayers for the costs of lobbying, political contributions, nonprofit sponsorships, costs associated with investor relations, and several other categories of spending.
SF3959, HF4851 caps the amount that Minnesota ratepayers will contribute to the compensation of utility executives. This bill puts in law a standard similar to that imposed by the Public Utilities Commission (PUC) in Xcel’s most recent electric rate case. In that case, the PUC capped Minnesota ratepayers’ contributions to top-executive compensation packages at $150,000 per year, roughly equal to the Governor’s salary. (Xcel is now challenging this decision in appeals court.)
CUB has spoken with the authors to offer our suggestions on bill language and support for the efforts. However, neither of these bills have received hearings in either the House or Senate, so they appear unlikely to advance this year.
Providing summer Energy Assistance
Last year, CUB spearheaded a proposal to expand the Energy Assistance program and make assistance available through the summer (HF2493-Kraft, SF2267-Dibble). Typically, Energy Assistance is only available during winter months (between October and May) to ensure Minnesotans can heat their homes. This bill did not pass in 2023, and we had hoped to revisit it this year. Unfortunately, providing summertime assistance requires supplemental funding from the state, and there is not sufficient funding to expand the program in 2024.
Summer assistance is becoming more important as we face hotter summers, and CUB continues to look for opportunities to address this need.
Expanding PUC participation with a new 2023 law
Additionally, away from the state capitol complex, the new participant compensation law that CUB championed last year is now being put to use. Also known as intervenor compensation, this statute aims to increase participation by ratepayer advocates and underrepresented communities in important PUC proceedings. It allows Tribal governments and qualifying non-profits to receive reimbursement for their costs of participating in a larger number of PUC proceedings than previously, and it sets strict parameters that must be met for a participating group to qualify for funding. This new statute was used for the first time by members of the Just Solar Coalition, who earned compensation for part of their costs of participating in Xcel’s electric rate case.
Stay tuned for more updates between now and legislature’s adjournment, set for May 20, and feel free to contact me (annielf@cubminnesota.org) if you have comments or questions.