, it is impossible to reach an energy deal that has bipartisan support.
Minnesota legislators had many disagreements this year, failing to resolve differences over the historic budget surplus that was spent on education, public safety and child care.
The lack of a final agreement also hampered legislation on subjects where the Legislature did actually negotiate successfully. This includes the $3.88 Billion tax bill, which is made up of new credits and cuts. There were also smaller bills that were dragged down.
One was the state’s energy budget.
The Republican-led Senate and DFL-Majority House reached a deal to significantly expand a weatherization program. This is a program that makes homes more efficient and helps reduce greenhouse gas emissions. It also saves money, especially in Greater Minnesota, and creates blue-collar job opportunities. However, the Legislature did not approve the energy budget due to wider disagreements.
Additionally, the deal included additional money to construct solar panels for public schools, and provided state matching funds to obtain federal cash for energy infrastructure projects.
The agreement over the energy budget would have cost $46.5 million from state’s general funds over the next three-years and $36 million from Renewable Development Account.
This cash would only make up a fraction of the $7.05 billion surplus that the state has left. It is also significantly less than the $1B House Democrats desired to use for a range of climate change priorities in the state budget.
This would have been, but it would still be a substantial amount, especially in a year with a supplemental budget that might only include tweaks to the full budget for 2021.
$16.3 million was agreed upon for weatherization. This is not a new idea. The federal government currently funds the state’s weatherization assistance program.
It assists eligible renters and homeowners with attic insulation, repairs or replacements of furnaces, boilers, water heaters, or programmable thermostats. It’s available to low-income individuals, elderly, families with children, persons with disabilities, and people whose energy costs account for a larger portion of their income.
The program has been in operation since 2005 and has helped about 60,000 people. Kevin Lee, deputy commissioner of the Minnesota Department of Commerce, is the division’s head of energy resources.
Federal funding has fluctuated over the years. It hovered around $20 million per year, but rose after the 2009 federal stimulus bill.
However, lawmakers, state officials, and environmental advocates argue that an expansion of the program using Minnesota cash would be a great benefit.
Lee stated that legislators had agreed to allow state money to be used more flexiblely, which allows Minnesota to pay for pre-weatherization work. This is work that fixes problems in homes making them ineligible for federal climateization assistance. It could be a problem with the plumbing, roof, or asbestos.
Lee stated that it has been difficult to find a weatherization workforce because of the fluctuating federal funding. Lee stated that the cash would have been used to attract people to the industry, and it would also have provided money for training about 100 workers in this sector.
Minnesota doesn’t spend nearly as much on weatherization as other states or neighboring states. Rep. Jamie Long (a Minneapolis Democrat) is the Chair of the House’s Climate and Energy Finance and Policy Committee. He noted that the state had estimated that it would take 291 year to reach all eligible households in 2019.
Recently, the University of Minnesota compared Minnesota’s weatherization efforts with 20 other states. Massachusetts spent $129.7 million in 2019, while Minnesota spent $22 million. South Dakota spent $2.1 million less than Massachusetts. Minnesota was 12th among the 21 states that the U examined. It was behind neighboring states Iowa and North Dakota. Many of these states spend more money on weatherization than the federal government.
Lee stated that the weatherization program reduces the cost of energy by between 20 and 40 percent. It also cuts down on energy consumption roughly the same. Lee stated that $16 million more would have enabled weatherization of approximately 1,600 homes. About two-thirds would be in Greater Minnesota.
Both Democrats and Republicans are divided on energy and climate policy. The expansion of weatherization received bipartisan support at Capitol.
Sen. Dave Senjem of Rochester, a Republican, chairs the Senate’s Energy and Utilities Finance and Policy Committee. He said that many houses in the state were built in a time when energy was much cheaper and weather resistance was not considered. Senjem stated that conservation of energy must be an important part of the country’s ongoing energy transition. He said the country cannot rely solely on solar panels and windmills at this point.
Senjem stated that span style=”font weight: 400 Any BTU we can save in the home without it leaking out is a BTU that you don’t need to put through a pipeline or anything like that.” Senjem stated that as we begin to move away from coal and natural gas, and possibly nuclear at some point in the future, we must… conserve.
Long stated that the program would create jobs and decrease energy consumption. He stated, “We know that in a time when costs are rising, it is important to help people save money on their electric bills.”
Matching funds at Risk
A second part of the deal that was never approved was money needed by the federal government for access to parts of the $1.2 billion infrastructure deal known as The Infrastructure Investment and Jobs Act (IIJA).
The IIJA funds are used to fund energy projects through a wide range of competitive grant programs. Each program requires varying amounts matching funds to cover a portion of each initiative. Lee stated that the state is considering a program focusing on grid hardening, which would help fund projects to make sure the electricity grid is resilient to extreme weather. The deal included $26 million to fund a state competitiveness fund that would match federal grant money.
Minnesota’s match money will not be used for this program. Lee stated that they are still working out the exact dates for matching funds for all grant programs.
Long also stated that the top legislative leaders approved $30 million for state matching funds for infrastructure programs.
Minnesota would need to approve matching funds for $68 million from federal funds dedicated to expanding its electric vehicle charging network.
A spokesperson for the state Department of Transportation Jake Loesch stated that if the Legislature does not approve state matching funds during the 2023 regular session, they expect “minimal loss of money,” although it could delay the development of the program or the installation of chargers.
Long and Senjem expressed hope that the Legislature will reach a broad agreement they can pass in a special session, which would include the energy money. Lee from the Commerce Department said that there are consequences to not appraising matching funds or more money for weatherization.
Lee stated that it can be frustrating to simply say “well, we’re going to keep letting energy be a burden on our most vulnerable families for an additional year.”