Source: Newsletter for the Central & Midwest Regions of the U.S. DOE CHP TAPs
Date: December 15, 2021
On May 25, 2021 Minnesota Governor Tim Walz signed the Energy Conservation and Optimization Act (ECO Act) into law. The legislation seeks to modernize the Conservation Improvement Program (CIP), which has governed utility efficiency in Minnesota for nearly forty years. Key updates include increased utility spending on programs serving under-resourced customers and fuel switching incentives for Minnesota’s investor-owned utilities and co-ops. In order to implement the many different measures in the ECO Act, the Minnesota Department of Commerce convened a ECO Act coordinating committee and three topic specific sub-committee working groups. The three working groups include the EV Sales Guidelines Working Group, the Efficient Fuel Switching Guidelines Working Group, and the Load Management Guidelines Working Group. The Coordinating Committee (CC) functions as the group that receives and discusses input from Working Groups and produces advisory guidelines for Department consideration. The MN Dept. of Commerce chose the Mendota Group to manage and oversee the coordinating committee and the various working groups.
Out of the three working groups the EFS working group has direct input in how Combined Heat and Power (CHP) and Waste Heat to Power (WHP) will be able to participate in the CIP. The Efficient Fuel-Switching aspects of the ECO Act are one of the most expansive aspects of the Act. The law eliminates the fuel-switching prohibition in CIP, and explicitly authorizes (through CIP) the following:
- Electric IOUs can promote electric measures that replace measures powered by natural gas, propane, or any of the other listed fuels.
- Natural gas IOUs can promote electric measures that replace natural gas measures.
- Electric consumer-owned utilities can promote electric measures that replace measures powered by natural gas, propane, or any of the other listed fuels
The EFS working group has to determine whether and how other approaches to fuel switching may be included under the scope of the EFS working group and subsequent regulations. Specific issues that need to be explored include whether electric utilities can promote projects that switch fuel use from electricity to natural gas; whether investor owned natural gas utilities can promote projects that switch fuel from gas to electricity; and whether utilities can implement a project that reduce the fuel use other than the one they sell?
In order to qualify as an efficient fuel switching measures a project must,
- Replace a fuel used by a customer with electricity or natural gas delivered at retail by a utility subject to section 216B.2403 or 216B.241
- Result in a net increase in the use of electricity or natural gas and a net decrease in source energy consumption on a fuel-neutral basis
- Require the installation of equipment that utilizes electricity or natural gas, resulting in a reduction or elimination of the previous fuel used.
- Fuel” means energy, including electricity, propane, natural gas, heating oil, gasoline, diesel fuel, or steam, consumed by a retail utility customer.
- An efficient fuel-switching improvement does not include, and must not count toward any energy savings goal from, energy conservation improvements when fuel switching would result in an increase of greenhouse gas emissions into the atmosphere on an annual basis.
The Working Group will develop materials to send to the Department of Commerce for consideration in crafting proposed guidelines that can be reviewed by the public and considered by the DOC Deputy Commissioner for adoption. The EFS Guidelines Working Group has a tight timeline –for the Deputy Commissioner to issue a Decision by 3/15/22, this group will need to submit draft advisory language to Department by mid to late January 2022.