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.
In that context, on Monday January 13th, both tentative utility franchise agreements were published on the city website. The two Franchise Agreements, one with each utility, are accompanied by memorandums-of-understanding (MOUs) that re-establish the Minneapolis Clean Energy Partnership, the 10-year collaboration between the City and the utilities.
For a quick read that sums up all 4 documents, they have also published the City Priorities of Proposed Utility Franchise Agreements and MOUs. You can also view the 2014 versions for comparison.
These are the charts from the document where both utilities appear to make GHG emissions reduction goals specific to Minneapolis for the first time. We still need to see both utilities demonstrate that their commitments are backed by meaningful resources, agility and follow-through on partnership action. For the record, we observed the MN Public Utilities Commission (PUC), back in 2014, make an open invitation to all parties of the Clean Energy Partnership to approach them at any time to get expenditures approved. The goals in the charts below at least clarify and makes locally specific goals that enable us to track progress:
As shown above, Xcel Energy’s goals are reflective of Minnesota’s 100% Renewable Electricity by 2040 law, which requires them to phase out the use of fossil fuels in electricity generation.
CenterPoint's goals meanwhile lag far behind what's needed to meet the City of Minneapolis’s Climate and Equity Plan and do not provide a believable pathway for true decarbonization. We get it, CenterPoint’s business model is selling fossil gas carried in infrastructure that is more challenging to decarbonize than electricity.
Nevertheless, simple having any clear commitment to reducing climate pollution in Minneapolis, is movement in the right direction. It's a big step from where we were even a few months ago when CenterPoint, at the October EVAC meeting and September Partnership meetings, did not seem willing to break-out statistics or planning at the Minneapolis local level, mainly talking about their "territory".
Community Power with local and national partners are looking at both agreements to try understand these questions:
- How well do these move us forward towards more local control?
- What should they include to get us to our clean energy future?
It's an important moment for the city of Minneapolis.
Additional Goals the utilities have committed to relating to better serving Minneapolis energy users
The City Council’s Climate and Infrastructure committee chair, Katie Cashman (Ward 7 CM), in her recent newsletter, says that the agreements also have “equity expectations in service quality and program delivery, and improvements to information sharing for work done on public streets” that were not in the last 10-year agreements. Here are some specifics on what that refers to:
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Xcel Energy has committed to ensuring that their service quality and reliability in Minneapolis either matches or is better than its statewide average. This essentially means that Minneapolis won’t experience a disproportionate frequency and duration of power outages. This is meaningful because the electrical grid in Minneapolis is often older and less modernized than the grid in much of the state.
- Recent data revealed that Xcel has 2-3x worse reliability than surrounding locally-owned municipal and cooperative utilities; its rates are ~20% higher than some nearby cooperative utilities (we hope to have some user-friendly data to share soon on that); and shuts off Black households at higher rates than white households, even controlling for well-known and entrenched racial disparities in wealth and income.
- CenterPoint Energy has committed to ensuring that their energy conservation investments and low-income affordability program participation in Minneapolis will either match or be greater than its statewide average.
What's up with the Minneapolis' Clean Energy Partnership?
The Clean Energy Partnership’s most Recent Annual Report, was presented to the city council on Jan 9th.
To sum up that report, the City and both utilities state their intent to collaborate on three big themes:
- Decarbonizing Homes via Electrification & Energy Efficiency Retrofits
- Equitably Accelerate In-Boundary Solar in Support of the City’s Goal of 30% Distributed Solar by 2030
- Impactful Reductions in Commercial and Industrial Building Gas Use
Despite having ambitious climate & energy goals on paper, the report revealed that we are behind on meeting 5 out of its 7 energy and climate goals. The only ones that are on track to be met are the 2 involving municipal operations.
For these reasons, this partnership deserves to be given more public attention so that the utilities can be held accountable. If we want to win, the work and pressure to hold them to their agreements must be constant over the next few years. With the right metrics, exit strategies, and public awareness - there is much to be accomplished.
Save the Dates! Public Hearing Feb 6th, Comments Due Feb 13th
Date: February 6, 2025 @ 1:30 PM
Location: Public Service Center 250 S. 4th St., Minneapolis, Room 350,
There will be a public hearing on these newly published agreements in front of the Minneapolis City Council's Climate & Infrastructure committee at their regular meeting time.
You can submit public comments until Feb. 13 in two ways:
- By email: [email protected]
- The online public comment form
- Feb 13th @ 9:00 AM: Deadline for submitting written comment.
The full 13-member city council will take a vote on the above agreements at its 9:30 AM meeting. If passed by the council, both agreements then go to the mayor for signature. Then the utilities get the final signature on their respective agreements.