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11%%%11/1 <br /> MINNESOTA MUNICIPAL U LILT LIES ASSOCIATION <br /> 12805 Highway 55 • Suite 212 • Plymouth MN 55441-3859 • 763 551 1230 • 300.422.0119 iMN) • Fax 763 551 <br /> Conservation Improvement Programs <br /> Beginning in 1993, Minnesota law required municipal electric utilities to spend 1%of <br /> their gross revenues on conservation initiatives known as conservation improvement <br /> programs (CIP). In 2001 the Minnesota State Legislature expanded municipal <br /> involvement in these programs by increasing CIP spending on electric operations to 1.5% <br /> of gross revenues, gradually reducing the amount of spending on load management that <br /> could be used to meet municipal CIP spending requirements. The new law also imposed <br /> new CIP reporting requirements on both electric and gas municipal operations. <br /> These changes resulted in doubling the annual amount municipal electric utilities must <br /> spend on conservation improvement. <br /> Through MMUA, municipal electric utilities launched a major effort to ensure that public <br /> power systems had the tools and information necessary to comply with the new <br /> mandates. This included the creation of an education program to help municipal utilities <br /> meet the requirements of the law, and the development of nine residential and <br /> commercial programs to be used by municipal utilities to meet the new CIP mandate. <br /> It will be several years before the law is fully effective and its impact can be evaluated. It <br /> would be inadvisable to make new CIP changes in the law until we know how well it is <br /> working. MMUA will resist efforts to impose additional CIP spending requirements or <br /> mandate additional CIP responsibilities on municipal electric utilities,particularly before <br /> municipals have had the opportunity to evaluate the impact of the current CIP program. <br /> MMUA will resist any effort to transfer control of municipal CIP programs away from <br /> local communities. <br /> In addition, consideration should be given to using CIP monies to meet certain energy <br /> emergencies. For example, several years ago the Commissioner of Commerce gave <br /> permission for municipal gas utilities to use CIP funds to help low income consumers pay <br /> their unusually high natural gas bills for the coldest month of the heating season after the <br /> utility was hit with a price spike for natural gas at the wholesale level. It seems <br /> reasonable that Minnesota law should be changed to clearly authorize the Commissioner <br /> to grant permission for the use of CIP funds to meet a similar community energy <br /> emergency. <br /> Minnesota Municipal Utilities Association <br /> February 2004 <br />