Minnesota Utilities Facing New Energy Conservation Law

Minnesota utility companies are facing an ambitious challenge: Under new state law, they will be required to reduce their energy retail sales by 1.5% annually starting in 2010. A policy forum held last week by the Minnesota Environmental Initiative looked at how this new state law – called the Next Generation Energy Act – will bring both great potential and some hurdles.

"People are starting to get it,” said panelist Dan York, acting director of utilities programs from the American Council for an Energy-Efficient Economy. (View York's slide presentation here.) With much of the world focusing on energy, energy efficiency is the area where real progress can be achieved, he said. U.S. states are starting to set their own energy conservation goals; Minnesota has stepped forward to make their goal of 1.5% annual savings official.

The panel included energy experts, utility representatives from CenterPoint, Great River Energy and Xcel Energy, and the business energy manager at Medtronic Inc. For the most part, the panel was optimistic that utilities could meet the 1.5% annual conservation goal with consumers’ help. (The state law will require that two-thirds of the 1.5% reduction will have to come from consumer energy savings, while the remaining third can come from utilities’ own production efficiencies.)

One hurdle for utilities, however, will be measuring customer energy savings, said Gary Connett from Great River Energy. They can measure expected energy savings when a business or consumer claims a rebate for an energy upgrade from them – but it’s much harder when the customers take steps to reduce energy usage without informing their utility. (Energy Smart is trying to solve this problem: We follow up with businesses we help and track of all sorts of energy changes they make – even low- and no-cost ones.)

To help meet the goal, utility representatives said they are looking at a variety of strategies, including offering more financial incentives, such as customer rebate programs, or giving better rates to customers who use electricity at off-peak hours. They also hope to educate customers on easy, no-cost ways to save energy. York estimates that 2% to 15% of energy conservation can come from consumers changing their behaviors.

A big part of achieving these goals will be making energy savings options easy and understandable for both consumers and businesses. Programs like Energy Smart help get the word out about rebates and other financial incentives and walk businesses and consumers through the process of reducing energy savings. It will also require that consumers see the vast financial and environmental benefits of reducing their energy usage.

(A shameless plug: If you need any help finding out what energy-efficiency incentives are available – would like a courtesy site walk-through, Energy Smart is happy to help! Give us a call: (651) 292-4653)