Minneapolis' New Utility Franchise Agreements Unveiled ! Public Hearing Feb 6th
Now more than ever, taking action at the local level to slash pollution that causes climate change is critical, through a clean energy transition that Minneapolis and St. Paul residents overwhelmingly support across cultures and zip codes.
Minneapolis’ New Utility Franchise Agreements with Xcel & CenterPoint now released! Public Hearing February 6th.
Until January 13th, Minneapolis’ new utility franchise agreements with Xcel and CenterPoint were secret, having been under negotiation behind closed doors for more than 6 months. Starting last summer, Community Power board and staff published multiple articles and blog posts about this opportunity for local climate leadership such as “Minneapolis’ once-a-decade chance to fight for energy and the climate” and “10 years later - Minneapolis is again negotiating a grand bargain with Xcel and CenterPoint.” Our most recent article, just published in the Women’s Press is “Minneapolis Residents: It Is Time to Voice Views on Xcel and CenterPoint Agreements”.
There are 4 different agreements in front of the city council:
- 2 proposed utility Franchise Agreements (one for each utility)
- 2 Memoranda of Understanding (MOU) with each utility that continues their participation in the Minneapolis Clean Energy Partnership
- Thanks to the city for providing a summary of all 4.
Background & How we got here
About this time 10 years ago, the City signed earlier (now expiring) versions of these 4 agreements with both utilities that set the tone for today.
As the result of our 2013 Minneapolis Energy Option Campaign pushing the city to consider forming a green municipal energy utility, we - as a city - had some key wins:
- A shortened agreement term (from 20 years to 10 years); Historically, the utilities were able to set franchise agreements for 20-year terms, say, from 1974 to 1994 to 2014, with no way for the city to exit.
- A first-in-the-nation "Clean Energy Partnership" between a city and its utilities;
- More flexibility on how and when the city can update the utility franchise fees through the ordinance authority of the City - un-linking that from the agreement itself. Franchise fees have since become an important way that the City of Minneapolis has funded local climate justice work.
We also learned some very valuable lessons from 2013:
1) The utilities are afraid of bad press that could undermine a carefully greenwashed PR image.
2) The utilities are even more afraid of competition and threats to their market share, which they maintain with the aid of secrecy and a stable of lobbyists.
Those 2 points explain why eleven years ago, both utilities told the city to not look into the option of forming a green municipal energy utility by promising to be “good partners” with the city’s ambitious 2013 Climate Action Plan goals. Then, together they formed the Minneapolis Clean Energy Partnership to give the utilities every opportunity to prove they are genuine in this promise.
Where things stand now
Now here we stand, 10 or so years later with two new agreements to look at, now that the 2014 agreements are expiring.
The Just Transition Coalition, which Community Power is part of, holds a rally on July 31st, 2024, in front CenterPoint Energy's offices on the Nicollet Mall. This story was covered in the Southside Pride “Why utility franchise agreements matter for equitable climate solutions” and in the Sahan Journal “As 10-year utility deals expire, Minneapolis residents seek more climate action from CenterPoint, Xcel.”
Then the City Council extended the expiring 10-year franchise agreements until April 17th, 2025. This bought the city more time to work out a better deal rather than giving in to utility pressure to reach one prematurely on the wrong terms.
The relevance of these negotiations - beyond calling into question our desire to be served by these corporations at all - also comes from the impact of franchise fees on City budgets. The city of Minneapolis has gotten around $40 million each year from these agreements with Xcel and CenterPoint, its largest source of revenue after property taxes. Minneapolis now has, at long last, a dedicated fund specifically to resource local climate action starting first in 2017 with ~$3 million, and expanding in 2024 to add an additional $10 million annually. That is still scratching the surface of what is needed for a just transition, but it is an impressive and much awaited beginning.
Read moreEnergy Utilities Should Be Rewarded for the Right Behavior Rather than the Wrong. We Must Incentivize Saved Energy Services
Pollution is at apocalyptic levels because the financial health of monopolistic power companies improves when they sell more electricity. At least in cases where it is generated from fossil fuels, the outdated electric utility business model rewards practices that spew more CO2 into the atmosphere and thereby increases the industry's contribution to ecological destruction.
So much of the energy from fossil fuels does not even make it to consumers and is simply wasted at various stages of the process such as transmission line losses or 2/3 of the energy from coal burned in power plants being simply lost to waste heat. Yet utilities are not being forced to internalize the environmental costs that such rampant waste poses.
So, we are hit with a 1-2 punch of utilities being rewarded for customers consumption while not being financially penalized for emitting the pollution responsible for climate chaos. We are apparently locked into a system where energy utility profits are tied to their sales.
The rules of an outdated system tilt the playing field against energy conservation practices that decrease energy sales and thereby reduce the amount of greenhouse gas emissions injected into the atmosphere. That is backwards. And this does not have to be the case.
Read moreThe Long Extended Cusp Between The Receding Central Station Era & The Emerging Modern Renewable Era Of Our Electricity System
In this essay:
1) THE RECEDING CENTRAL STATION ERA & THE EMERGING MODERN RENEWABLE ERA ARE DRIVEN BY THE DIFFERENT ECONOMIES OF SCALE
2) RENEWABLE POWER LOWERS BARRIERS TO ENTRY FOR COMPETITION
3) IF RENEWABLE POWER IS GETTING CHEAPER AND MORE COMPETITIVE THEN WHY DO SO MANY UTILITIES CLING TO THE OLD CENTRAL STATION POWER PLANT MODEL?
4) THE UTILITIES’ NUMBER ONE MOTIVE IS MARKET SHARE
5) UTILITIES BUILDING RENEWABLE POWER IN A WAY THAT MIMICS THE CENTRAL STATION MODEL AS A WAY TO DEFEND MARKET SHARE
6) ARCHAIC RULES ENABLE UTILTIES TO EXTERNALIZE TRANSMISSION COSTS
7) SO, WHAT IS WRONG WITH THIS MODEL? IT ENABLES MONOPOLY CONTROL AND PUTS UP BARRIERS TO COMPETITION
8) THE BENEFITS OF DISPERSED AND DISTRIBUTED POWER BEYOND ECONOMIC DEMOCRACY AND ACCESS
9) BEING “AGNOSTIC ON OWNERSHIP” PUTS PUBLIC APPROVAL OF RENEWABLES AT RISK
Read moreOur Founding Board Member George Crocker Publishes Book titled About Power: How to Democratize Electricity
George Crocker, a founding board member of Community Power, has worked on energy democracy issues since the late 1970’s. In his newly published book titled About Power: How to Democratize Electricity Crocker has gratefully compiled the valuable stories of his over 4 decades of experiences and distills from them the useful lessons learned so that the rest of us can know. The book is essential reading so that we do not have to learn the lessons the hard way or reinvent the wheel from scratch.
The main driver of climate chaos that Community Power uniquely and specifically focuses on is the way how energy utilities have incentives that are “upside down and backwards.” We can’t afford to remain trapped in a regulatory and policy compact for energy utilities that is stuck in the last century. Crocker articulately exposes the obsolete monopoly power structures in our energy utility system have slowed much-needed progress on climate justice. Examples of these resulting perverse incentives include how utilities are effectively financially rewarded when they effectively emit more pollution and are motivated to tilt the playing field again renewable power that is outside of their market share.
Crocker also lays out to build the renewable economy in a way that can bring down these barriers caused by these “upside down and backwards” incentives. To find out what it is, come join the Book Tour Event on October 17th (with more to follow or purchase the book by clicking here or on the image below.
George Crocker joined Don Olson and his show on KFAI radio 90.3 FM Today, Oct. 10, at 1pm to talk About Power. A recording can be heard at this link.
Thank you to Don, who was also part of the Northern Sun Alliance with George and named his show after it.
Read moreGlobal Entrepreneur who creates solar battery packs from old laptops visits Community Power
We were thrilled to have Gibson Tawago, a trailblazer for a sustainable business idea that is much needed for our world, visit us in the Twin Cities from Tanzania in August of 2024. He is the founder and CEO of WAGA, which provides a clean and affordable energy solution to low-income rural communities in Tanzania. Gibson met with both Community Power and our partner organization, Cooperative Energy Futures as part of a fellowship. Community Power matched the spirit of his work with decentralized renewable energy solutions while CEF's commitment to sustainability and affordability at the same time also provided a good match for the fellowship. For the previous few months, he was participating in the Mandela Washington Fellowship, to study about Leadership in Business at the University of Nevada in Reno. Gibson did not initially go to business school. But he came up with his idea organically of repurposing recycled laptop batteries into portable power packs equipped with solar panels first. Then he wanted to acquire advanced skills and knowledge in sustainable energy solutions, socially responsible entrepreneurship, financial management, and innovative business strategies.
(Gibson standing at the Cooperative Energy Futures community solar array in downtown Minneapolis
Click image above to watch a video of Gibson being interviewed at the site)
The story started around 2010 when mobile phones started to become more commonplace in sub-Saharan Africa. In the following few years, I-Phones that were much more user friendly for texting and internet replaced flip phones providing a connection with the world. The issue at that time was that charging the phones was a challenge. In numerous places in Tanzania, there is no electric grid infrastructure that we take for granted in almost all corners of the US. Gibson got his start when he used to bike for 32 miles to deliver multiple phones to a charging station that would charge 50 phones at the same time. The people had to limit the usage of their phones and often had to turn them off when not in use to conserve battery. From this experience, Gibson was determined to develop a solution. He eventually started WAGA in 2022 that provides people in Tanzania access to solar power to both charge mobile phones more frequently as well as for indoor light during nighttime, which helps school children study for example without having to rely upon Kerosene lamps like before.. The product WAGA sells is a solar panel (as in just one solar panel, rather the multipanel solar arrays you’d more commonly see in the US) installed on a roof while the battery pack and the lights are inside a home.
Read more