On Thursday, Feb. 11, I presented the Energy Conservation and Optimization “ECO” bill in the Senate’s Energy and Utilities Committee.
The legislation would expand on Minnesota’s existing Conservation Improvement Program (CIP) program to include load management and efficient fuel-switching while promoting the traditional energy efficiency programs. If adopted, ECO could help save customers energy and money while supporting local businesses in the electrical, heating and cooling, ventilation, and insulation installation industries.
While Xcel Energy, Otter Tail Power and Minnesota Power have had a relatively easy time making these improvements every year, electrical co-ops and municipals have really struggled to keep up. This reform eases the requirements on them, making efficiency goals more attainable while ensuring we don’t drive folks out of business.
The changes also reward institutions that are already succeeding by giving them the financial flexibility they have earned. Coupled together, these reforms move Minnesota’s energy priorities in the right direction while also allowing us to lower Minnesotans energy bills over time.
The current CIP is a statewide program that requires all electric and natural gas utilities to provide energy savings opportunities, primarily through financial incentives and rebates, to their customers. Those activities include efficient lighting and control systems, efficient water heaters, low-flow showerheads, A/C cycling programs, home energy audits and more. The CIP incentives and rebates are meant to make energy efficiencies more affordable for Minnesotans and help them to cut their utility bills while also preventing energy waste and lowering harmful gas emissions.
Since the program began in the 1980s, the CIP program has estimated to have saved Minnesotans around $6 billion. Based on research, it is 80% cheaper to save energy than to buy energy, thus creating energy conservation as an energy resource because less money will then go into generating energy.
In fact, all those savings added up are equal to about 14% of Minnesota’s energy generation. In addition, the hiring of contractors to do efficiency-related work has led to about 50,000 jobs and support around 500 electrical contractor businesses statewide.
Overall, the ECO reform will lower customers’ costs and get Minnesota ahead of the market and an impending technology boom as society moves towards more efficient electric energy systems and away from fossil fuels. Additionally, the legislation ensures energy providers will not have to scramble to apply for statute changes each year as these evolutions occur.
Sen. Jason Rarick represents District 11 in the Minnesota Senate.