Energy campaign and CenterPoint announce agreement

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July 24, 2013
By: Dylan Thomas
Dylan Thomas
Gas utility pledged to work toward city energy goals

The citizen-led Minneapolis Energy Options campaign won a commitment from CenterPoint Energy to work toward the city’s goal of reducing greenhouse gas emissions 30 percent by 2025.

The campaign is behind a push to put a question on the ballot this November that, if approved by voters, would allow the city to launch a study of municipal utilities. When it reported the agreement with CenterPoint late Tuesday, the campaign announced it no longer considered a city takeover of the gas utility necessary.

CenterPoint spokesperson Becca Virden said the company was “in alignment” with the city’s goals, which include adding local jobs and improving the reliability of utilities in addition to achieving conservation goals and reducing greenhouse gas emissions.

“What we did is decided to have an actual physical agreement with [Minneapolis Energy Options] … so we could collaborate to help the city with specific goals and tactics,” Virden said.

Campaign Manager Dylan Kesti said Minneapolis Energy Options was still seeking a similar commitment from Xcel Energy, the city’s electricity provider. The campaign still backs a November ballot question, as well, Kesti added.

In a Tuesday morning interview on Minnesota Public Radio, Xcel Energy Regional Vice President Laura McCarten called the campaign “divisive” and said the utility’s existing conservation and renewable energy initiatives could get it to the city’s emissions reduction goal earlier than 2025. The city aims to reduce greenhouse gas emissions 15 percent by 2015 and 30 percent by 2025 using 2006 as a baseline.

Kesti said about 46 percent of the electricity currently supplied by Xcel to Minneapolis comes from coal-fired power plants. The campaign wants to see more solar, wind and other renewable energy sources in the mix.

“We’d like to see more commitments to moving things off of outdated, polluting technology,” Kesti said.

Minneapolis is gearing up to negotiate new franchise agreements with both CenterPoint and Xcel. Both signed 20-year agreements with the city in the mid ’90s that expire at the end of 2014.

The agreements generate annual fees for the city. In 2012, Xcel paid Minneapolis $16.7 million into the general fund and CenterPoint paid $5.9 million.

In April, the City Council voted to spend $250,000 on the Energy Systems Pathways Study that will consider several options for achieving its energy goals. Municipalization was one option included for study, and it is expected to prove a costly one, since state law would require the city to purchase a utility's infrastructure and compensate it for debt and future revenues. Early estimates indicate those expenses could top $1 billion.

The day after Minneapolis Energy Options announced its agreement with CenterPoint, the Minneapolis Regional Chamber of Commerce released the results of a phone survey of 403 likely Minneapolis voters. When told municipalization costs could exceed $2 billion, 77 percent of those surveyed said “having to spend that amount of money made them less likely to believe a city-owned utility is a good idea,” the chamber reported.

Asked about the survey, Kesti pointed out that the campaign had knocked on 56,000 doors in the city and collected donations from about 5,000 individual donors.

“I would say we hear a very different message,” he said.

A public hearing on the creation of muncipal utilities is set for 10 a.m. Aug. 1 at City Hall. To read more about the city’s current franchise agreements and its goals for the future, go to minneapolismn.gov/energyfranchise.