Minnesota’s electrification efforts expand

Minnesota is in the process of electrification, which is transitioning to technology that relies on electricity rather than fossil fuels. Minnesota is ahead of other Midwest states in this effort thanks to the passage of the Energy Conservation and Optimization Act (ECO) last year, which updates and expands the state’s bedrock energy efficiency policy, Conservation Improvement Program (CIP). CIP helps households and businesses use electricity and natural gas more efficiently – conserving energy, reducing emissions, and lowering the need for more utility infrastructure. 

Thanks to the passage of the ECO Act, there is more flexibility for electric utilities and cooperatives to help make changes that will reduce reliance on fossil fuels.  

Despite the progress, the electrification process is still in the early stages and challenges remain around how to do this in a way that will not put too much pressure on communities and the electric grid. 

The Minnesota Department of Commerce (DOC) has been engaged in a two-year stakeholder engagement process to determine how to make this transition in an equitable way. The DOC commissioned a series of white papers regarding electrification and equity. The white paper authors shared their findings, and insights on how to move forward in the process at Environmental Initiative’s “Insights and Impact Forum: Electrification and Equity.”  

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The act is a big milestone 

The passage of the ECO Act last year created more opportunities for electrification in the state. It increases government support for efforts such as weatherizing buildings, replacing gas stoves, and installing heat pumps to warm homes. It also increases the amount of money utilities must spend on energy efficiency improvements for low-income households, which will help reduce disparities in who is able to afford these upgrades. Guidance was provided by the DOC to Minnesota utilities last month to help with the implementation and design process of this work.  

The forum panelists all expressed hope about the potential the ECO Act creates and for where electrification is headed.  

The strong energy infrastructure in the state can now be leveraged for this process, said Kevin Lawless, principal for Forward Curve. 

“There have been a ton of lessons learned over decades in energy efficiency that we can now apply in the electrification direction,” he said. “Electrification is getting support in the policy and regulatory world, and technology is increasing energy efficiency and price points, making electrification palatable to the population as a whole.”  

Even before the ECO Act was passed, some have been pushing ahead with electrification.  

Tribal nations are leaders in this space, with the Red Lake Nation working towards energy sovereignty through the incorporation of solar, microgrids, and a tribal-run utility. Other nations have also been implementing solar and electric charging stations on reservations.   

Matt Grimley, who co-authored a white paper on electrification in Ojibwe nations in northern Minnesota with Winona LaDuke of Honor the Earth, said these initiatives are not necessarily going on because of state policy, they are happening because of the agency tribes have. 

“Electrification was happening before ECO passed and will continue to happen outside the parameters of it,” Grimley said. “The players in this sphere have a lot of ability to make new programs, new situations, new infrastructure for people to participate in the system.” 

Progress, but barriers remain 

The upfront costs of replacing fossil fuel-powered technology presents a large barrier to adoption. Replacing gas stoves, installing heating pumps, and purchasing electric vehicles are expensive undertakings, and many can’t afford the upgrades. Even with the financial support now required through the ECO Act, there are still costs that will be placed on households.  

“The cost barriers are really intimidating,” said Maddie Wazowicz, a policy manager for Midwest Energy Efficiency Alliance. 

Wazowicz said in these early stages of electrification it is important to figure out how to deploy in a way that doesn’t raise bills and put a strain on Minnesota’s most vulnerable communities. 

In housing, it is important to ensure that renters are not the ones who end up bearing the brunt of these costs, said Mari Ojeda, a senior policy associate for Fresh Energy.   

She said governments need to move beyond just offering rebate programs and find new ways to relieve some of the financial burden from residents.  

The entire process is a massive undertaking 

Businesses and individuals are starting to transition to greater electrification, and Lawless said it is important for the government to move quickly, especially in the transportation sector because the market for electric transportation is expanding, and governments need to keep the pace with regulation. 

“EVs and charging infrastructure to support them are growing fast. If we don’t keep up on the regulatory side, it’s going to be harder to manage the electric loads in the state,” Lawless said. 

Panelists said the new legislation is a step in the right direction, but that changing the technology people use and putting more reliance on the electric grid is a massive undertaking that will take a long time to implement. Especially with upgrading technology in homes. 

 “One of the issues that’s hard for people to fathom is the scale of this industry and the scale of our energy use,” Lawless said. “This is a massive effort and in order to make it happen, we are going to have to learn how to scale up from pilot programs to very large activities.” 

Environmental Initiative would like to thank Dorsey & Whitney LLP for their generous sponsorship of this event and the 2022 Insights & Impact Forum series.