Energy efficiency: How Minneapolis is teaming up with utilities to reduce emissions

When the city of Minneapolis set out to cut greenhouse gas emissions 80 percent by 2050, it soon became clear the goal couldn’t be met without substantial help from the area’s two investor-owned energy companies.

Xcel and CenterPoint Energy provide their customers the electricity and natural gas that powers, heats, and cools the city’s commercial and residential buildings, which accounts for two-thirds of city emissions. Energy efficiency had to be part of the equation.

Utilities are largely regulated at the state level in Minnesota but cities do negotiate franchise agreements that allow utilities use of public property for transmission lines and pipelines. Under new 10-year franchise agreements with the city, the utilities agreed to establish a partnership to help the city reach its goal.

Now in its third year, the Clean Energy Partnership has drawn national attention. It won a Climate Leadership Award from the U.S. Environmental Protection Agency (EPA). The Department of Energy recognized its software program that helps building owners understand their energy use. Several cities – including Salt Lake City; Santa Fe, N.M.; and Madison, Wis. – have looked to Minneapolis as a model for their own emissions-cutting efforts.

The partnership has set a series of ambitious goals, including reaching 75 percent of households with energy efficiency retrofit services and cutting energy use 17 percent by 2025, and achieving a carbon-free electricity supply by 2040. Steps the partnership has taken include encouraging commercial property owners, landlords, and individual homeowners to conserve energy – as well as continuing efforts to cut the electric and gas usage of city-owned buildings, streetlights, and vehicles.

“The first two years really were a learning experience,” said Luke Hollenkamp, a sustainability program coordinator for Minneapolis. “One of the biggest accomplishments was just getting it up and running.”

Initial work included building databases of energy usage and energy conservation efforts throughout the city and creating a community Energy Vision Advisory Committee (EVAC) – two steps that both proved crucial.

Measure first

The databases, which are managed by the city, were a key early accomplishment, giving the partnership a way to measure progress as well as track participation in its energy conservation programs down to the neighborhood.

“We had known that parts of the city weren’t participating as much in energy efficiency programs as others, but we didn’t know to what scale,” Hollenkamp said. “This gave us a way to track our progress at a more granular level.”

The city in 2013 adopted a benchmarking ordinance requiring all private commercial buildings larger than 50,000 square feet to report their natural gas, electricity, and water usage. Meter readings are automatically uploaded by the utilities and compiled into a publicly available online tool that uses EPA’s Energy Star measures to rate buildings. Overall, the Minneapolis buildings score 74 out of 100, well above the median national score of 50.

Low-performing buildings identified by the benchmarking can be targeted for assistance and all benchmarked properties are encouraged to conserve energy. The city has established a “Minneapolis Building Energy Challenge” to reduce energy consumption by 15 percent by 2020. Participants receive public recognition for their efforts and the city will help connect owners with the technical resources they need to achieve the goal. So far, 15 of 429 eligible buildings have signed up for the challenge.

Audrey Partridge, local energy policy manager at electric utility CenterPoint, said the partnership’s current two-year plan calls for more intensive outreach to tell property managers and owners about programs they may be eligible for to lower their energy usage -- and their bills.

Engage the community

The 15-member community advisory committee – which includes representatives from the community, environmental advocacy groups, major industrial energy consumers, and technical experts – has proved crucial to the program’s success.

“One of the great things that EVAC has done was provide a template for community engagement,” said Bridget Dockter, manager of policy and outreach for natural gas utility Xcel. “That ended up being the source for a pilot program we are actually engaged in now.”

Under the outreach pilot program, the partnership is enlisting neighborhood organizations to test the best ways to reach the two populations that have historically lagged in participating in energy-efficiency programs – lower-income neighborhoods and multi-family buildings.

More than half of Minneapolis residents are renters, making multi-family buildings a key area to target. But how do you persuade property owners to invest in energy efficiency when tenants typically pay the utility bills?

In October 2015, Xcel and CenterPoint began offering free energy audits through the partnership to owners of buildings with at least five units and set up financial incentives ranging from 15 to 25 percent of upgrade costs for efficiency improvements in market-rate buildings. Rebates are available through the utilities under a state requirement.

Dockter said it’s too soon to measure the results, since it can take months after an energy audit to secure the capital for efficiency improvements. But, she said, “we’ve had a handful of buildings actually make the formal investment.”

Setting goals

Early results include an increase in Home Energy Squad visits from 731 in 2014 to 1,198 in 2015. These home energy audits include installation of energy-saving devices such as LED lights, weather-stripping, programmable thermostats, low-flow shower heads and faucet aerators. For a limited time, the city offered no-interest financing to participants making insulation and air sealing upgrades.

In 2015, residential electric use decreased by 4 percent and natural gas use dropped 22 percent from the previous year. Reductions were in part due to energy efficiency improvements as well as a mild heating season, according to the partnership’s 2015 annual report.

Keys to Success

For municipalities looking to Minneapolis as a model for collaboration, Dockter says a key is having strong commitments from every partner to put in the time and resources needed for success.

“It’s important early on to recognize you aren’t going to find some bright shiny object that is the answer,” she said. “It’s a long, systemic answer that you need to build on to really change the direction and the results.”

Al Swintek, government relations officer at CenterPoint, agrees that the partners need to be committed and that the partnership be formal, with regular meetings, documented goals, and work plans so that it produces results. He recommends directly involving “those at the highest levels to help push this forward.”

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