ECO Act Signed into Law // CEO Column August 2021

Daniel Carlisle // President/CEO & General Counsel

A bill led by electric cooperatives to modernize and expand the state’s energy conservation program for utilities was signed into law by Minnesota Gov. Tim Walz last month. Receiving strong bipartisan support from both the House and Senate, the Energy Conservation and Optimization (ECO) Act updates and expands the Conservation Improvement Program (CIP). The CIP established energy savings requirements for all Minnesota utilities — including electric cooperatives — to realize annual energy savings equal to at least 1.5% of annual electricity sales and to spend at least 1.5% of their gross operating revenues on programs to achieve this goal.

Energy savings are typically achieved through member participation in energy savings programs such as energy analysis and incentives for energy-efficiency improvements, like LED lighting and Energy Star appliances. Since CIP was adopted in 2007, the landscape of the utility industry has changed dramatically — primarily the amount of renewable energy resources that have been added to the electric grid. For example, Todd-Wadena Electric Cooperative’s wholesale power provider, Great River Energy, is transforming its power supply portfolio in ways that will result in more renewable resources, significantly lower emissions, and reduced power supply costs.

To make CIP more relevant for today, a variety of stakeholders including Minnesota’s electric cooperatives and other industry partners, introduced the ECO Act to help incentivize technologies and behaviors that lead to greater efficiency while also reducing emissions economy wide. A main component of the ECO Act emphasizes total energy efficiency across several sectors (e.g., transportation, agriculture) rather than focusing solely on reducing electricity use. This will allow cooperatives the flexibility to achieve their 1.5% reduction goal through programs that promote electrification technologies such as electric vehicles, electric storage water heaters, and air source heat pumps.

Another component of the bill removes the 1.5% spending requirement, unless the reduction in electricity use is not met, which will reduce consumers’ total energy bills. These updates will not only benefit the environment by reducing greenhouse gas emissions, but they will foster a more resilient grid as well. 

The ECO Act benefits consumers, while still supporting our state’s conservation goals. Todd-Wadena members have the opportunity to take advantage of several smart electrification options available through the Cooperative. TWEC’s special EV rates, Aquanta pilot program, and other rebates (listed in this edition of Pine to Prairie), are each uniquely designed to benefit our members and the environment.