Council to vote on purchasing more electricity through Xcel Energy program
The Minneapolis City Council is considering a proposal that would double its purchase of electricity from renewable sources.
The council may increase the city’s participation in Xcel Energy’s Renewable Connect program, which provides customers with locally sourced wind and solar energy without them needing to invest in equipment. The council approved an initial contract for the city’s participation in the program in June.
Approval of a second contract would mean that about three-quarters of the electricity purchased by city government would come from renewable sources by the end of the year.
The proposal comes as the city looks for ways to reduce citywide greenhouse gas emissions, the largest source of which is the burning of fossil fuels. Mayor Betsy Hodges in August proposed to help fund these efforts by increasing the franchise fee charged to utilities for their use of public land.
Renewable energy creates little to no carbon dioxide and air pollution emissions and has less impact on water and the environment than fossil fuels. Sources of renewable energy include wind, solar, geothermal, hydroelectric and biomass.
In Minnesota, state law requires utilities to provide 25 percent of their electrical generation from renewable sources by 2025. Minneapolis’ Climate Action Plan, approved in 2013, calls for generating 10 percent of the city’s electricity from local and renewable sources by 2025.
Already about 38.7 percent of the approximately 102 million kilowatt-hours of electricity used by city government is from renewable sources. That includes about 17.8 million kilowatt-hours from the first Renewable Connect contract.
The city would need approval from the state Public Utilities Commission to increase its participation in the program, but city energy manager Brian Millberg appeared confident that would happen.
Slightly higher cost
Increased participation would come at a slightly higher cost for the city. Xcel charges Renewable Connect customers a 3-cent fee per kilowatt-hour in lieu of the fuel charge it typically imposes. The alternative fee could cost the city 6 to 12 percent more for the electricity, depending on the price of fuel, according to Millberg.
The city would potentially pay for that with an increase in the franchise fee, which Hodges has proposed increasing 0.5 percent in 2018. The move would bring in an additional $2.6 million in revenue, she wrote in her budget message.
Revenue from the fee increase would go into the city’s general fund and wouldn’t be tied to any program or service, according to Eric Fought, the mayor’s communications director. However, Millberg said $500,000 of that would go toward the second Renewable Connect contract.
The fee could also go toward programs that help with other climate change efforts, such as increasing participation in energy-savings programs, according to John Farrell, a member of the city’s Energy Vision Advisory Committee. The funds could also go toward multi-family residential energy-efficiency programs and to the city’s Green Business Cost Share Program, Farrell said.
That program funds businesses willing to invest in cleaner, greener or more efficient technologies.
100 percent renewable?
The second Renewable Connect contract coincides with the release of a city report that details the steps Minneapolis would need to take to obtain all its energy from renewable sources within five years.
The report says the city would need to increase its participation in Xcel’s renewable energy programs and install more solar installations on city-owned land.
The report also found that the technology exists today to reduce the city’s electricity consumption 15 percent by 2022. The city’s Climate Action Plan calls for reducing energy use 17 percent by 2025.
City Council Member Cam Gordon said there’s growing interest in seeing how city operations could be powered exclusively by renewable electricity. Gordon said he’s hopeful the second Renewable Connect contract would encourage Xcel and the PUC to provide more renewable energy.
The City Council was scheduled to vote on increasing city participation in the program on Sept. 7.
