Minnesota’s Conservation Improvement Program Needs Modernization

It might be hard to recall what technology was like in early 2007. The iPhone was rolled out for the first-time, replacing flip and keyboard phones. Amazon’s Kindle became available and Facebook had only been a public platform for a few months. We didn’t have the Apple Watch, Amazon Alexa, iPad, Android phone or consumer drones. Technology has dramatically advanced in 13 years. That’s why North Star is continually adapting to meet our member-owners’ changing needs while being conscious of our commitment to environmental responsibility.

In 2007, Minnesota’s Conservation Improvement Program (CIP) was established, creating goals for all utilities – including electric cooperatives – to reduce their annual electricity sales by 1.5% and to spend at least 1.5% of revenues to achieve this goal. North Star is proud that we’ve consistently met or exceeded these goals.

When CIP started, select energy efficient purchases were incentivized including Energy Star® rated appliances and LED lighting. Some of these items were making their entry into the marketplace, and it was a win-win to encourage co-op member-owners to use these new products. Today, these energy efficient measures are more common. For example, LED lighting is increasingly not only the preferred consumer option but the only option. We’ve reached a point of saturation with many of the energy efficiency incentives introduced more than a decade ago.

While CIP has been beneficial in meeting its goals, it has become outdated, lacks an emphasis on innovation and doesn’t support many advancements that have positive environmental impacts. For instance, the program discourages the adoption of electric vehicles (EVs) because they would increase the use of electricity, yet these vehicles significantly reduce carbon in the atmosphere. The transportation sector now emits more carbon than electric power generation. For every vehicle that is converted to electricity, it results in a net reduction in emissions, which is positive for the environment.

To modernize the program, Minnesota’s electric cooperatives, along with other industry partners, drafted the Energy Conservation and Optimization (ECO) Act of 2020. This bill emphasizes total energy efficiency across many sectors – energy, transportation, agriculture and others – to encourage diverse improvements. Under the ECO Act, the goal to reduce electricity use by 1.5% annually will remain intact. However, a portion of this may be achieved with efficient electrification programs such as incentivizing EVs. The 1.5% spending requirement would be eliminated unless the reduction in electricity use is not met.

North Star supports this bill because we believe it provides more long-term, sustainable benefits for our members. The benefits include:
• Allowing North Star more flexibility to meet our annual energy savings goals by enabling us to count EV incentives, electric storage water heaters and air source heat pumps toward part of the goal.
• Helping the environment by reducing greenhouse gas emissions and fostering a more resilient grid.
• Encouraging innovation by supporting continuously advancing technologies.
• Reducing consumers’ total energy bills by eliminating the mandated 1.5% spending requirements while providing better tools for reducing carbon.

The bill passed in the Minnesota House while the legislature was in session. It now needs Senate approval. We encourage our member-owners to join us in advocating for this legislative change by contacting Senators Paul Utke, Mark Johnson, and Tom Bakk.

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