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How a City Can Get More Clean, Local Energy

| Written by John Farrell | No Comments | Updated on Feb 19, 2013 The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/city-clean-local-energy/
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Like many cities attempting to solve climate change at a local level, Minneapolis is finding the prospect more challenging that it may have imagined. The lion’s share of emissions (two-thirds in the case of Minneapolis) come from electricity and gas sold by two monopoly, corporate utilities. Minnesota’s state-level policy is helping: a renewable energy standard pushes the electric utility to 30% clean energy by 2020 and a conservation standard aims to reduce the growth in energy consumption. But state (and federal) policies aren’t enough, and Minneapolis has had no leverage to force its utilities to de-carbonize.

But an opportunity is coming soon.

In a short time, the city’s “franchise” contracts with its electric and gas utility will expire, giving the city a once-in-20-years chance to negotiate new terms for its energy services. These contracts are largely focused on right-of-way agreements, discussing an annual payment to city coffers in exchange utility use of city right-of-way to deliver energy services (in other words, payments for poles and wires in the alleys). But the contracts need not be limited to such mundane matters, especially when the city has a commitment to a climate-safe future and a populace strongly supportive of more clean, local energy. Already, the city’s franchise working group – a select four city council members – is examining alternatives to the status quo, options for energy services that reduce greenhouse gas emissions.

But there’s a catch. State law gives the utilities a monopoly on serving Minneapolis customers, regardless of their interest in negotiation. In other words, there’s not much incentive for Xcel Energy or CenterPoint Energy to talk turkey with Minneapolis when their citizens are a captive audience.

That’s the motivation behind Minneapolis Energy Options, giving the city an option and giving residents and businesses a choice for more control over their energy future. To do it, the city needs to put a municipal utility on the ballot this fall. If passed, it would authorize the city to create a municipal utility but only if it could be cleaner, more affordable, more reliable, and generate more local energy than the incumbent utilities. (see the video below for more about Minneapolis Energy Options).

It’s been done before, in Boulder, Colorado. After many years of fruitless negotiation with their monopoly electric utility (Xcel Energy, by coincidence), citizens in Boulder narrowly approved authorization of a city-owned utility in fall 2011. It hasn’t closed the door to negotiation; in fact, Xcel continues to ply the city with alternatives to forgo losing tens of thousands of customers and millions in profits. The utility’s motivation should not be lost on Minneapolis or other cities with an eye on meeting ambitious climate and energy goals:

If you want investor-owned, for profit, monopoly utilities to work on reducing greenhouse gas emissions, they need a financial incentive. And there’s no better incentive than losing customers.

In the next two years, Minneapolis will have a once-in-a-generation opportunity to take charge of its energy future in its utility franchise negotiations. But it’s only likely to make a difference if they have options on the table. Here’s hoping city council gives citizens that chance.

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About John Farrell

John Farrell directs the Energy Self-Reliant States and Communities program at the Institute for Local Self-Reliance and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. More

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