Energy Incentive Programs, Minnesota

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Updated June 2015

Minnesota utilities collectively budgeted over $180 million for energy efficiency and load management programs in 2014.

What public-purpose-funded energy efficiency programs are available in my state?

Minnesota has no public-purpose-funded energy efficiency programs.

What utility energy efficiency programs are available to me?

State law requires regulated electric utilities to invest 1.5% (2% for Xcel) of their in-state revenues in the Conservation Improvement Program (CIP). Regulated gas utilities and cooperative and municipal utilities are required to invest 0.5%. Each utility develops its own CIP programs, and the cost of the programs is charged to customers of the utility via a bill surcharge.

Xcel Energy offers prescriptive incentives for a wide range of energy-efficient equipment, and the flexible Custom Solutions program covers many other measures. Other resources available include energy efficiency studies and the Business Energy Advisor tool.

Minnesota Power (MP)'s PowerGrant program provides incentives for energy-efficient equipment including lighting, air conditioning, motors, energy management systems, refrigeration, and electric cooking equipment. Rebate amounts are based on the peak kW reduced or kWh saved over the lifetime of the equipment. Maximum incentive amount is $50,000 per customer for facilities with average peak monthly demand over 300 kW; $25,000 for those between 100 and 300 kW; and $10,000 for those with a demand less than 100 kW.

Otter Tail Power Company provides numerous incentives as part of the Minnesota Conservation Improvement Program (see above), including several that might interest federal customers:

  • Rebates are available for a variety of energy-efficient equipment including lighting, motors, air- and ground-source heat pumps, refrigeration, thermal storage technologies, compressed air systems, and electric cooking equipment.

  • Grants are available through a competitive bidding process for commercial and industrial customers to undertake energy efficiency projects. Proposals are reviewed individually and there are no restrictions on the types of projects considered.

  • Design Assistance is offered for new construction projects over 5,000 square feet. Required energy savings is 5% below a baseline building.

  • Recommissioning & Retrocommissioning incentives are offered for up to 30% of the total study cost, plus $400 per kW of reduced demand ($20,000 maximum).

CenterPoint Energy offers rebates for efficient natural gas-fired equipment including heating systems and components (new and retrofit), boiler tune-ups, water heaters, steam traps, energy recovery wheels & plates, carbon monoxide sensors, infrared heaters, food service equipment, and natural gas-fired process equipment. Custom incentives of up to $0.70/therm of first-year savings are also available.

Minnesota Energy Resources offers the following incentives to customers (including previous Alliant Energy gas customers now served by Minnesota Energy Resources as of May 1, 2015):

  • The Energy-Saving Audits program provides no-cost building energy audits for government customers, up to $600 for a Level 1 (walk-through) audit and $950 for a Level 2.

  • The Energy-Saving Rebates program covers heating, HVAC systems, food service equipment, steam traps, and water heating equipment. Custom rebates are also available and are based on incremental cost, peak load, and annual energy savings. Prescriptive rebates vary by measure.

  • The C/I Turn-Key Efficiency program offers large commercial and industrial customers free services such as an energy use study, assistance with project plan creation and execution, and technical assistance. Incentives include project buy down to 1-year simple payback, $1.00/therm for first-year savings, or full incremental cost, whichever is less.

  • The Design Assistance and Modeling program provides resources for new construction and major renovations including review of plans, energy modeling/rating, and other consulting services.

The Dakota Electric Association offers rebates for motors, adjustable speed drives, various lighting and air-conditioning equipment, and vending machine controls. Custom rebates are also available. Dakota also offers free walk-through audits for business customers.

Minnesotan municipal utilities that are part of the Missouri River Energy Services consortium participate in the Bright Energy Solutions initiative, which offers incentives on equipment ranging from CFLs to compressed air systems. Check the rebates provided by your particular utility, as offerings vary across the different municipalities.

Numerous other municipal utilities and electric cooperatives in Minnesota offer incentive programs targeted to commercial and industrial customers. The Database of State Incentives for Renewables and Efficiency (DSIRE) web site provides summaries of these programs.

What load management/demand response options are available to me?

Xcel Energy offers several demand response programs that may be of interest to federal customers:

  • The Electric Rate Savings program offers financial incentives for peak demand reduction projects at commercial and industrial facilities that can reduce load by 50 kW or more. Participating customers receive a per-kW discount on controllable demand every month, but in exchange must commit to reducing their load to a pre-determined level for up to 150 hours per year.

  • The Interruptible Gas Rates program provides a reduced rate throughout the year for customers who agree to reduce use during peak gas demand. One-hour notice is provided and the installation of a tele-metering device is required.

  • The Saver's Switch for Business offers program participants a monthly discount of $5 per ton of enrolled air conditioning in exchange for customers allowing the utility to cycle the air conditioning on and off for 15 to 20 minute intervals during periods of peak electric demand in the summer.

Otter Tail Power Company sponsors various demand response options including:

  • The Released Energy Rider pays large customers (500 kW minimum peak load) for load curtailments. When Otter Tail expects high market prices, it will alert program participants of its desire for released energy. Customers who wish to participate reply with a commitment to curtail a specific amount of power at the required time. Remuneration is based on a negotiated percentage (up to 90%) of Otter Tail's cost to buy power in the market.

  • Various direct load control options allow rate cuts in exchange for allowing Otter Tail Power to control specific equipment (such as domestic water heating or thermal storage) on their system during on-peak times.

  • A Real Time Pricing Rider is available to a limited number of customers with at least 200 kW of permanent load. Customers pay at the company's real-time rate for usage above and below a historically determined "customer baseline load."

Minnesota Power offers a Commercial Dual Fuel program. This direct load control program is designed for any electric load where a non-electric backup source of energy (e.g., natural gas as an alternative to electric heat) can be used during periods of peak demand. The incentive is roughly 5 cents per curtailed kWh.

Dakota Electric Service's Interruptible Load Management program is available to customers who agree to reduce their electric load by at lead 50 kW during times of peak energy use. A credit is applied to the monthly bill for all energy (kWh) consumed.

The Central Minnesota Municipal Power Authority, Minnkota Power Cooperative, and Dairyland Power Cooperative generation and transmission utilities serving municipal and cooperative utilities in Minnesota offer their members various direct load control and interruptible demand response programs. CMMPA also offers a load bidding option.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewables and Efficiency (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following programs may be of interest to federal customers:

  • Minnesota's SolarSense program offers provides rebates for the installation of PV systems or solar thermal water heating systems through a lottery system. The base incentive is $1,000/kW.

  • Minnesota Power's Power Grant program offers $200/kW grants for various renewables installations of up to $10,000 for 0-100 kW systems, $25,000 for 101-300 kW systems, and $50,000 for systems over 300 kW.

  • Xcel Energy's Renewable Development Fund provides grants periodically through a request for proposals process. Renewable energy technologies eligible for funding typically include wind, biomass, solar, hydroelectric, and fuel cells. Funding is generally split between new development projects that result in the production of renewable energy, and research and development.

  • Xcel's New Solar* Rewards program offers an incentive for the installation of solar PV systems. An incentive of $0.08 per kWh produced over 10 years is paid annually with additional incentives if panels were manufactured in Minnesota. As part of the agreement all renewable energy credits (RECs) or similar green attributes produced are transferred to Xcel. Systems must meet Xcel's qualifications, including having conducted an energy audit with the utility.

  • Numerous municipal and cooperative utilities in Minnesota also offer renewables incentives programs, which can be researched on the DSIRE site, above.

Are there energy efficiency programs sponsored by state government?

The Minnesota Department of Commerce administers a variety of energy efficiency programs. However, no state-sponsored energy efficiency programs are currently available to federal customers.

What additional opportunities are available to me?

Federal customers whose utilities have area-wide contracts through GSA (e.g., CenterPoint) may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available in GSA's Energy Division Library. Federal facilities should contact their account executive to determine the level of each utility's participation.