Legislative Update: What passed last session to protect Minnesota ratepayers
A point of personal privilege before getting into the meat of this post: It took a little extra time to put a legislative report together this year. Thank you for your patience.
We, along with so many others, are still reeling from the loss of Representative Hortman and her husband, and the shooting of Senator Hoffman and his wife. Both legislators have been leaders on energy, and I have been fortunate enough to know them both for more than a decade.
As House Energy Committee Chair in 2013, Melissa Hortman hired me as the executive director of the non-partisan Legislative Energy Commission; it’s because of her trust in me that I am at CUB today. Representative Hortman was a champion of clean energy and a true model of a principled and effective leader. She will be deeply missed.
After five months of hard work, the Minnesota Legislature wrapped up its 2025 session in a flurry of activity on June 9. With a significant budget shortfall to address and the House locked in a tie between the two parties, this year did not produce a lot of large policy packages. However, the legislature did adopt two significant bills to protect energy affordability for Minnesotans.
CUB had three main priorities this session. Here is how they fared.
1) Protecting Minnesotans from the costs to provide data center power: PASSED
With the exponential growth of digital data and AI, the data center industry is booming, bringing with it a potentially enormous demand for electricity. A mounting body of evidence suggests that serving data centers’ enormous electricity demands will lead to higher energy costs, and, without careful oversight, a portion of these costs are likely to be borne by other ratepayers.
CUB played a lead role in securing nation-leading ratepayer protections this session. We were happy to help build consensus support among tech companies, utilities, and other stakeholders around Minnesota’s new law. These protections were passed as part of a package of data center-related policies.
Minnesotans and Minnesota businesses are now legally protected from the costs and risks associated with meeting data centers’ enormous electricity demands. In apportioning utility costs and setting electric rates, the Minnesota Public Utilities Commission (PUC) is now required to ensure data center companies pay their full share for the life of any assets built to serve them. We’ve written more about this policy here.
2) Protecting Minnesota’s utility affordability programs from federal cuts: PASSED
The entire federal staff responsible for the Low-Income Home Energy Assistance Program (the federal Energy Assistance program, or LIHEAP) was cut on April 1, lighting a fire under us to decouple Minnesota’s ratepayer-funded affordability programs from LIHEAP.
Minnesota’s investor-owned electric and gas utilities offer income-qualified affordability programs, as required by state law or the PUC. For qualified families, these programs cap monthly electric or gas bills at an affordable percent of household income and offer forgiveness of past-due balances as long as customers maintain on-time payments. (Learn more about these programs and how to sign up here.)
Under prior state law, households were generally required to receive Energy Assistance in order to qualify for utilities’ affordability programs. Since Energy Assistance has been in place for 45 years, this has been an efficient way to verify participants’ income without additional administrative hassle. However, the Trump administration is now threatening to eliminate the Energy Assistance program. More than 125,000 Minnesota households rely on Energy Assistance to help keep their homes warm and their lights on, so ending the program would be catastrophic in its own right. Without a change to state law, it would also have had the knock-on effect of preventing participation in local utility programs.
Similarly, state law made eligibility for low-income utility conservation programs partially reliant on data from the U.S. Department of Housing and Urban Development (HUD). Prior to this legislative session, households could be deemed eligible for low-income programs if their income was no more than 80% of the median household income for their area, “as calculated by the United States Department of Housing and Urban Development.” However, multiple federal agencies have already stopped publishing or updating key databases, and there is talk of shifting responsibilities among agencies as the Trump Administration reduces the federal workforce. If HUD were to stop publishing area median income data—even if the data were moved to another federal agency—it would undermine Minnesota’s program.
On April 2, the day after the federal Energy Assistance staff was fired, CUB quickly drafted legislation that provides alternative pathways for local affordability program eligibility, and began circulating it with legislators, utilities, program implementers, and state agency staff for refinement. We were pleased to arrive at a bill that earned consensus support among stakeholders and bipartisan support in the Legislature. The changes were passed into law as part of the energy omnibus bill (SF2).
The Minnesota Public Utilities Commission (PUC) now has flexibility to set eligibility requirements for utility affordability programs, and utilities can confidently administer income-qualified conservation programs going forward. The PUC is opening a docket to put in place alternative options for program eligibility, and we are in conversations with utilities and others to consider how to ensure the programs remain in place and become easier to access for customers who need them.
3) Expanding Energy Assistance in Minnesota: FAILED
The final proposal that CUB spearheaded this year was a bill to expand Energy Assistance in Minnesota (SF486-Dibble, HF771-Kraft). Despite federal threats to eliminate its funding, Energy Assistance is an essential program that allows thousands of Minnesotans to afford their utility bills and keep the heat on in the winter months. However, even at current funding levels, the assistance available to Minnesotans falls far short of the need. And, Energy Assistance is only available to Minnesotans during the heating season months. High temperatures have become more common, and air conditioning is no longer optional in many parts of the state. Past-due bills continue to stack up. Today, Minnesotans in total owe about $150 million in utility arrears; that figure has about doubled in the past five years. And the number of utility shutoffs has skyrocketed.
To help customers maintain service year-round, CUB proposed that Minnesota expand the Energy Assistance program and provide benefits during the summer as well as the winter. You can read more about the bill here.
Unfortunately, with the state facing a budget shortfall, there was not enough funding available to support the proposal this year. With support from more than 20 organizations as well as the DFL chairs of the House and Senate Energy Committees, we believe the proposal is positioned well for a future year in which funding may be available.
Other energy legislation
The Legislature also passed a handful of other bills related to energy, including authorizing “securitization” for gas utilities, allowing the utilities to issue ratepayer-backed bonds to manage future price spikes with lower-cost financing; and cutting $2 million per year from Minnesota’s Pre-Weatherization program for fiscal years 2026-2029.