Minneapolis Council Members announce intention to increase Climate Equity funding by ~ $5 million annually, starting in 2026

Minneapolis city council members announced their plans at a press conference on October 9th  to expand equitable climate funding in the city by increasing the Climate Legacy Initiative (CLI). Councilmember Cashman and other speakers emphasized the need to prioritize spending on energy efficiency retrofitting and weatherization efforts that will lower utility bills for Minneapolis community members. City Council members Cashman, Koski and Chughtai have responded to requests from constituents by drafting a plan intended to bring in an additional $5 Million toward meeting the Climate Equity plan goals. They have authored and introduced a proposal to modify the gas and electric franchise fee ordinances this fall.

(Photo and video credits to Unidos MN- who is mobilizing their members & volunteers for the November 13th public hearing)

Stories of impact were shared: 

• One speaker at this press conference, Dale Howey, shared how he has achieved a negative $1,000 energy utility bill for his rental apartments through solar, heat pumps and insulation which he used to pass the savings on to tenants to keep their rents affordable
• Another speaker shared how they've been denied access to the Healthy Homes Weatherization program of the Climate Legacy Initiative because the funding for all of the City’s Green Cost Share and Weatherization programs was exhausted in August of 2025. That means the demand for these offerings continue to exceed the amount the City has offered. 

You can see and follow the full text of the proposed ordinances here (2025-01061 and 2025-01062)

• A Final vote expected from the full city council on the proposed funding ordinances on Thursday, December 11^th. Follow updates on them at (2025-01061) and (2025-01062). 
• ***** UPDATE***** Both pieces of legislation passed city council on a 10-3 vote on December 11th. More Details on this can be found at our follow-up blogpost on this same story here. 

Follow ups to the press conference: 

1. Ward 7 City Council Member Katie Cashman, shown at the podium above, was the lead speaker at the press conference and has included a written summary about it in her recent Ward 7 Newsletter.
2. Andrew Hazzard, climate & environmental justice reporter with the Sahan Journal, attended the press conference and has now published an article about it this morning. It gives the full story on how the city aimed to allocate $10 million from utility fees for climate spending in 2023, but fell short.
3. The full city council also held a robust discussion on the proposed ordinances shortly after the press conference that gave valuable perspectives on the path forward.

UPDATED FROM ORIGINAL BLOGPOST: The November 13th Public Hearing:

On November 13th, the Climate & Infrastructure Committee of the City Council held a public hearing on expanding the annual funds to implement the Minneapolis’ Climate Equity Plan by about $5 million, up from the current $10 million. Here are some key takeaways: 

• 55 people total signed up to speak! 
• This was such an enthusiastic turnout that the comment time was shortened from 2 minutes down to 1 minute. 
• The speakers were in favor of the city council’s proposed ordinances by close to a 9-1 margin. 
• By far the most commonly cited reason among speakers was to increase funds available to help energy-burdened households access cost-saving home energy improvements that they would not be able to do on their own. If it passes, we might see a budget amendment to dedicate the new $5 million towards the programs that have highest demand as well as the new Sustainable Homes Program. 

(Community Power Staff Speaking at the Public Hearing)

Here is the video of the abundant public commentary and discussion broken down into sections:

1: Staff Presentation 

2: Public Hearing     For a 1 hour and 20 minute period.   

3: Staff Q & A with councilmembers  

4: Questions and discussion among councilmembers 

Community Power submitted a written public comment on the proposed funding ordinances:

• Our main submitted written comment can be read here. 

• • One Key Highlight: For each dollar ($1) the city invests in the Green Cost Share, we see on average:
    ● Residential Benefit: a 4.2X return on investment
    ● Business Benefit: a 9.5X return on investment

• We also submitted a supplementary written comment here showing how recent expanded funding enables more to participate and capture these benefits. 

Updated From Original Blogpost - The ordinances are now "Deemed Approved"

Mayor Jacob Frey, did not publicly (to our knowledge) weigh in on whether he would support both ordinances. Because he did not veto them by the December 20th deadline allotted, both will go into effect even though he did not explicitly sign them.    

Mayor Frey's 2026 budget proposal, which was released in Mid-August, called for maintaining the Climate Legacy Initiative with $400,000 of additional funding levels for the next year while creating 3 or 4 new utility customer classes. The stated goal of creating new customer classes is to make the franchise fee funding more equitable, which the city council adopted. Mayor Frey spent a minute of his annual budget address in mid-August talking about the Climate Legacy Initiative.   

Cooperative Energy Futures’ Sustainable Homes Program Is Now LIVE! It will be a significant part of the Minneapolis Climate Legacy Initiative Going Forward

• For home energy improvements at no up front cost that save you money on day 1, check out the webpage for Sustainable Homes or its enrollment form directly here. 
• Page 8 of the slideshow shows the role Sustainable Homes will have in the Climate Legacy Initiative Implementation. 
• Neighborhood energy navigators from Good Energy Connections can help you get connected with any of the existing programs available where this new Sustainable Homes program is just one among several options. 

Background and context for the Climate Legacy Initiative:

The CLI comes from gas and electric bill franchise fees which are a percentage of our Xcel and CenterPoint bills. The city council first initiated the idea in 2017 through a 0.5% across the board increase to the fee to bring in about $2 million annually. This was under no particular name but was passed under the promise of helping the city meet its Climate Action Plan goals. Then in 2023, the City created the Climate Legacy Initiative by further increasing the franchise fee rates, though by varying amounts across customer classes, with a goal of bringing in an estimated $10 million in total to help the city meet its 2023 Climate Equity Plan goals. However, because the fee is based on a % of total gas/electric revenue in Minneapolis, the  mild winters have caused the total actually raised by about two million dollars - totaling at ~$8.3 million. Shortfall aside, champions of this climate funding like Community Power have said from the beginning whether the number was $2 million or $10 million…that it pales in comparison to what is actually needed to swiftly decarbonize our energy system in a just way on a timeframe that matters. 

The October 16, 2025 Climate Legacy Initiative implementation update adds context to the funding increase

Watch the video of City Staff presentation and read the slideshow. 

• Only half of the approximate $10,000,000 in the Climate Legacy Initiative (CLI) currently goes toward weatherization and deep energy efficiency improvements. 
• 54% of that funding went toward low-income properties and the North + South Green Zones.
• One chief concern stated by councilmembers on Oct 9th was that home weatherization programs would not reach vulnerable residents fast enough. But at least 9 different community organizations are building awareness of the city climate programs, including Community Power.
• Because of the CLI, the number of city-backed home energy improvement projects tripled from just 200-300 each year between 2019 to 2023 to over 1100 in 2024.

We support the funding increases with careful implementation of the new funds that puts downward pressure on energy bills.

• Community Power has long advocated for the city to resource equitable climate action on a scale that will truly matter and dedicating franchise fees towards efforts that equitably reduce energy bills. We supported the creation of the 2023 Climate Legacy Initiative (CLI) for those reasons.
• However, we have also consistently and firmly expressed to City officials that the City needs to fulfill its promise to dedicate these funds toward ways that put net downward pressure on energy bills (see slide 9).

Here is a similar chart, updated for this year: 

• According to CM Cashman, the proposed measure she co-authored would increase "the total energy utility bill costs for the average resident by $10 per year (for both Xcel and CenterPoint bills combined, not each) while holding "polluters and larger customers" to a higher standard of paying proportionately more." According to Council Member Katie Cashman, who authored the ordinance, the increase would raise energy costs by about $10 a year for the average household. She cited the above chart showing that "every $12 invested into City-backed programs though this fund from the original CLI could turn into a $525 annual saving for residents who participate."
  • For residential customers, this ordinance would raise franchise fee rates from 5.25% of total Xcel bills to 5.5% and would raise the franchise fee rates on residential CenterPoint bills from 6% to 7%. Commercial and industrial customers would pay a higher franchise fee rate than residential but it would still be within the single digits.
• Currently, a significant portion of the funds are going toward measures that are incredibly important but do not directly result in energy bill reductions. Because franchise fees are a direct pass through on our energy bills, we need the careful implementation promised so it does not end up resulting in disproportionately higher energy bills.
• Sadly, this dynamic of promises not entirely kept on franchise fees is not new. After a similar promise during the 0.5% franchise fee increase in 2017 we saw many of the funds get diverted toward uses other than the intended ones. It was a scaffolding out of core climate functions of the city out onto this new energy bill funding, which also perpetuates the idea that climate mitigation is not core to the City's functioning.
• We are optimistic that the Councilmembers authoring the ordinance change understand the situation and history and have committed to ensuring future funding is steered towards programs that simultaneously reduce energy bills while reducing climate pollution. However, we have yet to hear firm commitments from the City establishment as a whole toward fixing the original misallocation of these funds towards back towards energy/cost-saving programs. We hope that commitment is coming soon and will continue to advocate for this. 

Setting the Franchise Fee in Context with Xcel's Rate Hike Proposal: Another Public Comment Opportunity  

• Xcel is requesting an electric rate hike for 4th year in a row that would add $165 a year to the average customer's electric bills if the MN Public Utilities Commission (PUC) approves their proposed 12.72% increase.
• As Minnesotans struggle with their household expenses, Xcel is (again) seeking to raise the $150,000 limit on how much it can pay its executives using ratepayer dollars.
• Despite netting over $1B in profits every year since 2015, Xcel is asking the PUC to raise its state-guaranteed profits from 9.25% up to 10.3% (even though the MN PUC twice just ruled that 9.25% was fair).
• The deadline to submit written public comments is December 30, 2025. Please check out the Citizen’s Utility Board’s guide for writing a public comment and to learn more.

Utility shutoffs are a growing concern and here is a guide to stop them! Xcel has been cutting power to MN homes in record numbers.

• Check out this action guide with several ways to advocate for the end of utility shutoffs. Imagine having a refrigerator full of food spoiling because the utility shut off power.  
• According to a Sept. 18th, 2025, article by Walker Orenstein in the Star Tribune, Xcel Energy has cut off power to 52,549 Minnesotans who fell behind on bills in 2024, as their executives are paid millions. That is far more than in recent years because recently installed remote technology has made shut-offs easier.
• As we head towards winter, the only national energy emergency program, the Low Income Home Energy Assistance Program (LIHEAP), is in grave danger of running out of funds through budget cuts and the government shutdown. Use the above guide to take action to stop these shut-offs.