Energy Efficiency Resource Standard (Minnesota)

Last modified on February 12, 2015.

Rules Regulations Policies Program

Place	Minnesota
Name	Energy Efficiency Resource Standard
Incentive Type	Energy Efficiency Resource Standard
Applicable Sector	Investor-Owned Utility, Retail Supplier
Eligible Technologies	Custom/Others pending approval, Heat recovery, CHP/Cogeneration, Unspecified technologies, Biomethane
Active Incentive	Yes
Implementing Sector	State/Territory
Energy Category	Energy Efficiency Incentive Programs, Renewable Energy Incentive Programs
Electric Sales Reduction	1.5% reduction of average retail sales beginning in 2010
Natural Gas Sales Reduction	1.5% reduction of average retail sales beginning in 2010
Website	http://mn.gov/commerce/energy/topics/conservation/How-CIP-Works.jsp
Date added to DSIRE	2010-12-15
Last DSIRE Review	2012-11-07
Last Substantive Modification to Summary by DSIRE	2011-12-07
References	DSIRE

Summary

In 2007, the Minnesota legislature passed the Next Generation Energy Act (NGEA), which requires both electric and natural gas investor-owned utilities to reduce energy sales by 1.5% of average sales. Average sales are calculated based on the most recent three-year weather-normalized average. The NGEA requires investor-owned utilities to invest the following amounts of their revenue in energy conservation improvements (including waste heat recovery but not utility infrastructure projects):

• Natural gas utilities: 0.5% of gross operating revenues (GOR) from service provided in the state
• Electric utilities: 1.5% of GOR from service provided in the state
• Electricity utilities that operate nuclear plants: 2% of GOR from service provided in the state

For all utilities, the following spending requirements apply:

• At least 0.2% of GOR must go toward programs for low-income customers
• A maximum of 10% of the minimum spending requirement may be spent on research and development projects
• A maximum of 10% of the minimum spending requirement may be spent on solar energy projects
• A maximum of 5% of the minimum spending requirement may be spent on other renewable and distributed generation projects
• All electric utilities must include programs that encourage customer use of efficient lighting

Each utility must develop a Conservation Improvement Plan (CIP) every three years and file it with the Energy Division of the Department of Commerce. Actual spending and energy savings must be reported on an annual basis. Waste heat recovery (converted into electricity) and utility infrastructure projects may count toward the energy savings goal. S.F. 550 allows for natural gas utilities' purchases of biomethane to count toward the energy savings goal. Energy savings in excess of 1.5% may be carried forward for up to 3 years, except in the case of savings from infrastructure projects, which may carry over for 5 years. NGEA allows for electric utilities and natural gas utilities to apply to the Commissioner of Commerce for a lower spending requirement. Certain large facilities may petition to have their revenues excluded from calculations determining investment and expenditure requirements.

The Office of Energy Security must provide reports on the annual energy savings achieved through the CIPs. The 2012 Energy and Carbon Dioxide Savings Report covers 2009-2010.

Incentive Contact

Contact Name	Information - Conservation Improvement Program
Department	Minnesota Department of Commerce
Division	Energy Division
Address	85 Seventh Place East, Suite 600
Place	St. Paul, Minnesota
Zip/Postal Code	55101
Phone	(651) 296-4026
Email	cip.info@state.mn.us
Website	http://mn.gov/commerce/energy/

Authorities (Please contact the if there are any file problems.)

Authority 1:	Minn. Stat. § 216B.241
Date Effective	2007-02-22
Date Enacted	2007-02-22

• Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.