ECO triennial filings show Minnesota's commitment to energy efficiency

Jul 5, 2023

Georgia Barnes, 2023 Chuck Green Fellow

On June 30, Minnesota’s energy utilities released their long-awaited triennial plans under the new guidelines in the Energy Conservation and Optimization Act (ECO). ECO is the new and improved version of the Conservation Improvement Program (CIP) and was passed during the 2021 legislative session, after six years of hard work and bipartisan collaboration.

The filing of triennial plans is a regulatory obligation for utilities operating in Minnesota and plays a crucial role in outlining strategies and objectives for energy conservation, optimization, and greenhouse gas reduction. Under the watchful eye of the Minnesota Department of Commerce, the ECO triennial filings embody the state's unwavering commitment to energy efficiency and sustainability.

ECO preserves the core policy from CIP, protecting the framework that has allowed Minnesotans to save $8.2 billion since its enactment in 1983. Under CIP, utilities were limited in their ability to help customers achieve energy-saving goals as they were restricted to traditional energy efficiency — gas utilities could only help customers save gas and electric utilities could only help customers save electricity — but ECO ushers a new era. With ECO signed into law, utilities can now offer a harmonious blend of traditional energy efficiency practices alongside efficient fuel switching (electrification) and load optimization (demand response). This expanded scope opens the doors to a more comprehensive approach to energy conservation.

While fuel-switching initiatives permitted under ECO offer more flexibility to utilities, they must also adhere to strict criteria. Fuel-switching must effectively reduce energy consumption and greenhouse gas emissions while demonstrating cost-effectiveness. Additionally, these initiatives must be installed and operated in a manner that optimizes the electric utility's load factor system. By ensuring that electrification resulting from efficient fuel-switching does not contribute to peak demand, Minnesota avoids the need for additional investments in peaking resources.

During the most recent legislative session, CEE was able to work with legislators to clarify the definition of low-income within the ECO framework. The new definition states that a household will qualify for low-income incentives from ECO if their annual income is 80% or less of the area median household income for the geographic location, or if it meets the income eligibility standards as determined by the Commissioner. This clarification holds significant importance as it effectively raises the income eligibility threshold, allowing more to access energy efficiency programs that will assist them in saving money and reducing emissions.

Additionally, ECO requires gas and electric utilities to spend 1% and 0.6% of their gross operating income from residential customers on low-income programs, respectively. This mandated increase in spending on low-income programs provides utilities with new ways to utilize their funds. Utilities can now direct their dollars to pre-weatherization programs, which encompass the necessary home improvements that must be completed before a residence becomes eligible for federal weatherization funding. Pre-weatherization programs primarily focus on enhancing health and safety measures, with projects such as roof repairs and the removal of mold or asbestos. This expanded range of utility spending for low-income residents facilitates a way for energy savings and efficiency programs to be inclusive of all, regardless of economic status.

Here is the list of Investor Owned Utilities (IOUs) and links to each of their triennial filings. Within each plan, you will find descriptions of their programs, compliance statistics, participation and energy savings goals, estimated budgets, and cost-effectiveness scores.

Minnesota's ECO triennial utility filings undergo a rigorous review process to ensure that the proposed programs are cost-effective, technically feasible, and capable of delivering meaningful energy savings to all customers. The Minnesota Department of Commerce encourages public participation in this process in the form of stakeholder engagement, public comments, input, and suggestions. We expect stakeholder comments to be due mid-August and will be carefully reviewed by the Department of Commerce and utilities, allowing for potential revisions or further commentary. The ECO triennial plans are slated to take effect on January 1, 2024. Click here to find a guide for submitting public comments.

Minnesota’s energy landscape is set for a significant transformation under ECO, and as stakeholders, we have the opportunity to contribute to this journey by actively engaging in the review process. Together, let's shape an energy efficient and sustainable future for Minnesota.