A bill led by electric cooperatives to modernize and expand the state’s energy conservation program for utilities was signed into law by Minnesota Gov. Tim Walz last month.
Receiving strong bipartisan support from both the House and Senate, the Energy Conservation and Optimization (ECO) Act updates and expands the state’s Conservation Improvement Program (CIP). The CIP established energy savings requirements for all Minnesota utilities — including electric cooperatives — to realize annual energy savings equal to at least 1.5% of annual electricity sales and to spend at least 1.5% of their gross operating revenues on programs to achieve this goal.
Energy savings are typically achieved through member participation in energy savings programs such as energy audits and incentives for energy-efficiency improvements such as LED lighting and ENERGY STAR appliances. These services have helped Great River Energy’s members realize more than 1 billion kilowatt-hours in energy savings over the years.
Since CIP was adopted in 2007, the landscape of the utility industry has changed dramatically — primarily the amount of renewable energy resources that have been added to the electric grid. For example, Great River Energy is transforming its power supply portfolio in ways that will result in more renewable resources, significantly lower emissions and reduced power supply costs.
To make CIP more relevant for today, a variety of stakeholders including Minnesota’s electric cooperatives and other industry partners, introduced the ECO Act to help incentivize technologies and behaviors that lead to greater efficiency while also reducing emissions economy wide.
“Back when we first began our energy efficiency initiatives, we would say ‘The cheapest and cleanest form of energy is the energy that is never used in the first place,’” said Jeff Haase, manager of member services at Great River Energy. “But that’s not the case anymore since we’ve added, and will continue to add, affordable renewable energy resources to our generation portfolio. We now encourage the smart use of electricity and the electrification of certain end-uses because it’s become cleaner and remains cost-effective.”
A main component of the ECO Act emphasizes total energy efficiency across several sectors (e.g., transportation, agriculture) rather than focusing solely on reducing electricity use. This will allow cooperatives the flexibility to achieve their 1.5% reduction goal through programs that promote electrification technologies such as electric vehicles, electric storage water heaters and air source heat pumps.
“I am proud to sign this important energy legislation into Minnesota law,” Walz said in a press release. “We know that investing in energy conservation and beneficial fuel switching means that Minnesota’s homes and businesses run more efficiently and have a lower impact on our environment. The ECO Act will help Minnesota families and small businesses save money, create good-paying jobs, and, most importantly, protect Minnesota’s environment for generations to come.”
Another component of the bill removes the 1.5% spending requirement, unless the reduction in electricity use is not met, which will reduce consumers’ total energy bills. These updates will not only benefit the environment by reducing greenhouse gas emissions, but they will foster a more resilient grid as well.
“Not only will the ECO Act benefit consumers’ pocketbooks while contributing to Minnesota’s conservation goals, but it also will increase and expand workforce opportunities all over the state,” said Darrick Moe, president and CEO of the Minnesota Rural Electric Association, which represents electric cooperatives. “This is a win-win-win for consumers, energy providers and all sectors of Minnesota.”