House’s final climate, energy bill explores more carbon-free options

What’s new in renewables? A 2023 law requires Minnesota residents be using entirely carbon-free electricity sources by 2040. Meanwhile, electrification is afoot, with an increasing emphasis on electric heat and cooling sources and transportation.

And now the House Climate and Energy Finance and Policy Committee has scanned the horizon for other renewable energy sources and settled upon geothermal energy and anaerobic digesters as the state’s next big investments in that area.

Geothermal and anaerobic digester projects are the two biggest-ticket items in the committee’s finance and policy bill, which was unveiled on Tuesday. Sponsored by the committee’s chair, Rep. Patty Acomb (DFL-Minnetonka), HF4177 was replaced by a delete-all amendment. Plans are for it to be (perhaps further) amended and approved by the committee on Wednesday.

Kent Sulem, director of government relations for the Minnesota Municipal Utilities Association, testifies April 16 before the House Climate and Energy Finance and Policy Committee regarding HF4177 sponsored by Rep. Patty Acomb. (Photo by Michele Jokinen)

“It’s a modest bill that has a large impact,” Acomb said. “When I look at the provisions in the bill, I put them in two buckets. The first bucket has the tools to accomplish our 100% clean energy goals. First among those is [House] Majority Leader [Jamie] Long’s permitting reform bill [HF4700]. … The second bucket is really about decarbonizing buildings, in which geothermal plays a big role.”

Among the bill’s appropriations is $14.2 million from the Renewable Development Account. That state-administered account is designed to support renewable energy projects and is made up of money that Xcel Energy pays to the state for being able to store nuclear waste at its Prairie Island and Monticello nuclear power plants.

For fiscal year 2025, that account would allocate:

• $5 million for a geothermal energy system at Minneapolis’ Sabathani Community Center;
• $5 million for an anaerobic digester energy system for Ramsey and Washington counties;
• $2.5 million for a geothermal energy system grant program; and
• $1.7 million for implementation of the U.S. Department of Energy’s SolarAPP+ software program by local permitting authorities.

The bill also includes General Fund appropriations for fiscal year 2025 of $1.1 million to the Commerce Department and $433,000 to the Public Utilities Commission. Among those appropriations are:

• $500,000 for pilot thermal energy network projects;
• $500,000 for a rebate program to help achieve higher energy ratings in buildings and residences;
• $250,000 for a grid enhancing technologies plan;
• $166,000 for permitting reform;
• $111,000 to develop a cost-sharing process for distribution system upgrades for residential solar and storage users; and
• $39,000 for a utility thermal energy work group.

A special revenue fund would provide $155,000 to establish an ombudsman position to help resolve interconnection issues. It would be funded by a surcharge on interconnection applications.

In addition to providing planning grants of up to $150,000 for cities, counties, towns, and the Metropolitan Council to determine if they can install geothermal energy systems, the bill would also require natural gas utilities with more than 800,000 customers to spend at least 15% of their total incremental plan costs on thermal energy network projects.

[MORE: View the spreadsheet]

Electric transmission

The permitting reform in the bill is designed to speed up the process for new transmission projects and improvements to existing facilities, including grid-enhancing technologies that could alleviate congestion in transmission systems. Provisions in the bill amend state regulations and requirements for:

• certificates of need for large energy facilities;
• the state’s transmission and distribution plan;
• federally approved transmission lines;
• designating sites and routes; and
• reviews of environmental assessments, costs and economic impact.

The bill would also require electric transmission line owners to file a report with the Public Utilities Commission on congestion and plans to use grid enhancing technologies.

Fuel switching

Several items in the bill relate to fuel switching, the process of replacing one form of technology for another for such things as home heating, cooling, water heaters and electricity sources. The bill would:

• authorize the Public Utilities Commission to order utilities to develop conservation incentive plans that include fuel switching;
• authorize the commerce commissioner to recommend a consumer-owned utility to implement an efficient fuel-switching program;
• allow a consumer-owned utility to allocate up to 10% of its total conservation spending for research and development on efficient fuel-switching projects; and
• authorize a public utility to include a goal for efficient fuel-switching improvements in its energy conservation and optimization plan.

Other changes

The bill would also:

• reduce the annual energy savings goal required of a consumer-owned natural gas utility from 1.5% to 1%;
• broaden the scope of the commercial Property Assessed Clean Energy loan program and increase the maximums for loan terms and amounts; and
• establish a rebate program for housing developers for the costs of certification under the U.S. Department of Energy's Zero Energy Ready Home Program.

What’s in the Bill?

The following are selected bills that have been incorporated in part or in whole into the climate and energy finance and policy bill:

• HF3704 (Kraft)
• HF3946 (Carroll)
• HF3949 (Hollins)
• HF4177 (Acomb)
• HF4242 (Kraft)
• HF4423 (Stephenson)
• HF4574 (Stephenson)
• HF4688 (Hemmingsen-Jaeger)
• HF4700 (Long)
• HF4759 (Acomb)
• HF4938 (Hollins)
• HF4975 (Acomb)
• HF5097 (Acomb)
• HF5171 (Carroll)