Fuel-switching improvements expenditures made to low-income households application to the low-income conservation spending requirement for municipal utilities and cooperative electric associations

A bill for an act

relating to energy; allowing expenditures on fuel-switching improvements made

to low-income households to apply to the low-income conservation spending

requirement for municipal utilities and cooperative electric associations; amending

Minnesota Statutes 2024, section 216B.2403, subdivision 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 216B.2403, subdivision 5, is amended to read:

Subd. 5.

Energy conservation programs for low-income households.

(a) A

consumer-owned utility subject to this section must provide energy conservation programs

to low-income households. The commissioner must evaluate a consumer-owned utility's

plans under this section by considering the consumer-owned utility's historic spending on

energy conservation programs directed to low-income households, the rate of customer

participation in and the energy savings resulting from those programs, and the number of

low-income persons residing in the consumer-owned utility's service territory. A municipal

utility that furnishes natural gas service must spend at least 0.2 percent of the municipal

utility's most recent three-year average gross operating revenue from residential customers

in Minnesota on energy conservation programs for low-income households.
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Except as

provided in paragraph (j),
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a consumer-owned utility that furnishes electric service must

spend at least 0.2 percent of the consumer-owned utility's gross operating revenue from

residential customers in Minnesota on energy conservation programs for low-income

households. The requirement under this paragraph applies to each generation and transmission

cooperative association's aggregate gross operating revenue from the sale of electricity to

residential customers in Minnesota by all of the association's member distribution

cooperatives.

(b) To meet all or part of the spending requirements of paragraph (a), a consumer-owned

utility may contribute money to the energy and conservation account established in section

216B.241, subdivision 2a
. An energy conservation optimization plan must state the amount

of contributions the consumer-owned utility plans to make to the energy and conservation

account. Contributions to the account must be used for energy conservation programs serving

low-income households, including renters, located in the service area of the consumer-owned

utility making the contribution. Contributions must be remitted to the commissioner by

February 1 each year.

(c) The commissioner must establish energy conservation programs for low-income

households funded through contributions to the energy and conservation account under

paragraph (b). When establishing energy conservation programs for low-income households,

the commissioner must consult political subdivisions, utilities, and nonprofit and community

organizations, including organizations providing energy and weatherization assistance to

low-income households. The commissioner must record and report expenditures and energy

savings achieved as a result of energy conservation programs for low-income households

funded through the energy and conservation account in the report required under section

216B.241, subdivision 1c
, paragraph (f). The commissioner may contract with a political

subdivision, nonprofit or community organization, public utility, municipality, or

consumer-owned utility to implement low-income programs funded through the energy and

conservation account.

(d) A consumer-owned utility may petition the commissioner to modify the required

spending under this subdivision if the consumer-owned utility and the commissioner were

unable to expend the amount required for three consecutive years.

(e) The commissioner must develop and establish guidelines for determining the eligibility

of multifamily buildings to participate in energy conservation programs provided to

low-income households. Notwithstanding the definition of low-income household in section

216B.2402
, a consumer-owned utility or association may apply the most recent guidelines

published by the department for purposes of determining the eligibility of multifamily

buildings to participate in low-income programs. The commissioner must convene a

stakeholder group to review and update these guidelines by August 1, 2021, and at least

once every five years thereafter. The stakeholder group must include but is not limited to

representatives of public utilities; municipal electric or gas utilities; electric cooperative

associations; multifamily housing owners and developers; and low-income advocates.

(f) Up to 15 percent of a consumer-owned utility's spending on low-income energy

conservation programs may be spent on preweatherization measures. A consumer-owned

utility is prohibited from claiming energy savings from preweatherization measures toward

the consumer-owned utility's energy savings goal.

(g) The commissioner must, by order, establish a list of preweatherization measures

eligible for inclusion in low-income energy conservation programs no later than March 15,

2022.

(h) A Healthy AIR (Asbestos Insulation Removal) account is established as a separate

account in the special revenue fund in the state treasury. A consumer-owned utility may

elect to contribute money to the Healthy AIR account to provide preweatherization measures

for households eligible for weatherization assistance from the state weatherization assistance

program in section
216C.264
. Remediation activities must be executed in conjunction with

federal weatherization assistance program services. Money contributed to the account by a

consumer-owned utility counts toward: (1) the minimum low-income spending requirement

under paragraph (a); and (2) the cap on preweatherization measures under paragraph (f).

Money in the account is annually appropriated to the commissioner of commerce to pay for

Healthy AIR-related activities.

(i) This paragraph applies to a consumer-owned utility that supplies electricity to a

low-income household whose primary heating fuel is supplied by an entity other than a

public utility. Any spending on space and water heating energy conservation improvements

and efficient fuel-switching by the consumer-owned utility on behalf of the low-income

household may be applied to the consumer owned utility's spending requirement under

paragraph (a). To the maximum extent possible, a consumer-owned utility providing services

under this paragraph must offer the services in conjunction with weatherization services

provided under section
216C.264
.

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(j) A consumer-owned utility's spending on efficient fuel-switching improvements made

to low-income households may be applied to the consumer-owned utility's low-income

conservation spending requirement under paragraph (a).

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EFFECTIVE DATE.

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This section is effective the day following final enactment and

applies to applicable fuel-switching improvements installed on or after that date.

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