5.5. ERMUSR 03-19-2013 - Laserfiche WebLink

Home Browse Search

Conservation Background Minnesota's municipal utilities support energy conservation. The wise use of energy is in keeping with the main goal of our electric and gas services — to provide good service at a reasonable price. Helping customers improve their efficiency helps the environment, helps the utility defer the need to invest in generating facilities, and helps consumers manage their energy bills. Toward that end, Minnesota's municipal utilities currently spend about $18 million per year on Conservation Improvement Programs (CIP). Municipal utilities were early leaders in developing programs to manage and control customers' peak usage. Municipal utilities have become increasingly engaged in developing and implementing conservation programs. Many have been operating energy efficiency programs for well over 20 years. AMunicipal utilities' support for energy conservation as been demonstrated by their continuing efforts to meet state energy conservation mandates, which have been evolving over the course of the last 20 years. The state mandate for CIP began in 1993, when Minnesota law required municipal electric utilities to spend 1% of their gross revenues on CIP programs. In 2001 the Minnesota State Legislature expanded municipal involvement in these programs by increasing CIP spending by electric operations to 1.5% of gross revenues, gradually reducing the amount of spending on load management that could be used to meet municipal CIP spending requirements. In 2007, the Minnesota Legislature expanded the statewide CIP mandate by adding an annual energy savings goal of 1.5% of total energy sales to the spending requirement of 1.5% of revenues. The new added requirement is very difficult to meet and perhaps impossible to meet for some small systems with little load growth. In order 0 o meet or even approach the goal, a utility must pend substantially more than the 1.5% of revenue required prior to 2007. Some utilities have picked 10/ 2013 State Position Statements 1 Position Statement much of the low- hanging fruit and are finding it more and more difficult to maintain cost - effective conservation programs. MMUA Position Minnesota's municipal utilities are serious about conservation, but we are also serious about spending our ratepayers' dollars wisely. With that in mind, we have a number of concerns regarding the CIP program as it is currently constituted. Not Sustainable. The Conservation Improvement Program in its current form is not sustainable over the long term. The legislative intent was to compel cost - effective measures, but the cost - effectiveness of measures going into the future will decline quickly. • The legislature should consider ways to clarify the cost - effectiveness provisions of the statute. - Before any new expansion of CIP is imposed, a detailed study should be made of the costs that will be incurred by rate payers to meet changing goals.