Published July 31, 2023
On Thursday, the Public Utilities Commission (PUC) ordered utilities to maximize the benefits of the federal Inflation Reduction Act (IRA) in future planning and cost recovery proceedings.
When the IRA was signed into law nearly a year ago, it became the most significant energy investment in U.S. history, providing nearly $400 billion in grants, loans, rebates, and tax incentives to help accelerate clean energy investments, create energy jobs, and lower ratepayer costs. Following the passage of the IRA, the Minnesota legislature enacted sweeping changes to require carbon-free electricity by 2040 and set a goal for a net-zero emissions economy by 2050. IRA funding for energy storage, transmission, distributed energy resources, and renewable energy infrastructure investments could significantly offset the costs of meeting the state’s energy goals.
In order to achieve these cost reductions, the PUC recognized that utilities must integrate the benefits, incentives, and cost-savings available under the IRA into their plans for the future. This does not mean Minnesota’s utilities need to utilize every aspect of the IRA, but it will require utilities to carefully consider whether and how the IRA might render certain actions or investments more cost-effective for ratepayers. Ultimately, the PUC will determine whether investments should proceed and whether utilities have met their burden to maximize IRA benefits.
The PUC also required utilities to submit additional filings on how the IRA interacts with utilities’ energy conservation offerings. Through their Energy Conservation and Optimization (ECO) programs, utilities provide free or discounted services to help customers make their homes more energy efficient. Rebates are often available to offset the costs of energy efficient appliances and other energy saving measures. As Minnesota continues to implement the IRA, additional rebate opportunities will become available to households beyond what utilities have traditionally offered. In many instances, IRA incentives could “stack” on top of existing rebate options to further reduce the costs associated with making energy upgrades.
CUB will continue to share information on these opportunities as they become available. For now, Minnesotans can access IRA tax credits for heat pumps, water heaters, insulation materials, home energy audits, and more. Information on these incentives can be found at the Department of Energy’s Energy Savings Hub, as well as on the White House website. You should also contact your utility to see what ECO rebates and programs are available to you.
CUB is thankful that the PUC is taking a proactive approach towards maximizing the benefits of the IRA for Minnesotans. This decision by the PUC is a major stepping stone in clarifying how the programs and resources made available through the IRA will be used by utilities and benefit consumers. Incorporating the cost savings of the IRA into utility planning will result in a cleaner, more affordable energy future.