6.1.A. ERMUSR 04-12-2016 - Laserfiche WebLink

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074e _darer everot, r 6,4„, , n • Vol. 15, No. 1 March 18, 2016 MMUA CIP Bill Heard in House On Wednesday, the House Job Growth and Energy Affordability Committee heard HF 2486, MMUA's bill to improve to the Conservation Improvement Program (CIP). Authored by Rep. Dave Baker (R-Willmar), a former WMU commissioner, the bill aims to help the municipal utilities struggling to meet the energy-savings goal under CIP. Under the current CIP statute, the Division of Energy Resources (DER) is authorized to approve a modified goal for a utility, based on the utility's historic conservation efforts, load growth, customer classes, potential studies, or other factors. However, the DER has not been approving utility plans under 1.5%Given that municipal utilities are locally-regulated entities, the bill would make modified goals submitted by municipal utilities automatically approved. The bill also allows electric utility infrastructure projects to be used to satisfy the CIP goal without first having to meet the current 1% customer-side savings threshold. Since these demand-side projects require significant planning and investment, they are often forgone by municipal utilities due to inability or uncertainty of first achieving 1% customer savings. MMUA Government Relations Director Bill Black explained that a "one-size fits all" conservation program doesn't work for Minnesota's 125 diverse municipal utilities, which have very different customer makeup, load characteristics, and savings potential. Of the municipal utilities reporting to the DER, only 30-40% annually achieved the 1.5% energy- savings goal according to data reported for 2011-14. About 2/3 of reporting utilities meet the annual 1.5% spending goal. Several MMUA members were on hand to support the legislation. Willmar Municipal Utilities'Wes Hompe explained to the committee that WMU's early conservation efforts prior to the implementation of the 1.5% annual savings goal make that goal difficult to achieve. Wendy Meyer of Mountain Lake explained that their small utility has limited ability to meet the annual savings goal due to their low commercial and industrial loads. Brian Frandle of North St. Paul was also on hand to answer committee member questions. DER Director Bill Grant expressed concern that municipal utilities would propose a 0% goal if this bill went into effect, and therefore had concerns. Asked about his position on the utility infrastructure projects, he said DER didn't have a formal position but it was a "step in the right direction." Fresh Energy acknowledged that each utility in the state is unique in its potential, but believes the 1.5% savings goal is a useful benchmark. They expressed their desire to work with the municipal utilities and noted their past support for utility infrastructure projects. The Center for Energy and the Environment (CEE) said the CIP goals have benefited the 220