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Incentives/Policies for Renewables & Efficiency

Printable Version
Energy Efficiency Resource Standard   

Last DSIRE Review: 10/16/2014
Program Overview:
State: Minnesota
Incentive Type: Energy Efficiency Resource Standard
Eligible Efficiency Technologies: Heat recovery, Custom/Others pending approval, Unspecified Technologies
Eligible Renewable/Other Technologies: CHP/Cogeneration, Biomethane
Applicable Sectors: Investor-Owned Utility, Retail Supplier
Electric Sales Reduction1.5% reduction of average retail sales beginning in 2010
Natural Gas Sales Reduction1.5% reduction of average retail sales beginning in 2010
Web Site:
Authority 1:
Date Enacted:
Date Effective:
Minn. Stat. ยง 216B.241

In 2007, the Minnesota legislature passed the Next Generation Energy Act (NGEA), which requires both electric and natural gas investor-owned utilities to reduce energy sales by 1.5% of average sales. Average sales are calculated based on the most recent three-year weather-normalized average. The NGEA requires investor-owned utilities to invest the following amounts of their revenue in energy conservation improvements (including waste heat recovery but not utility infrastructure projects):

  • Natural gas utilities: 0.5% of gross operating revenues (GOR) from service provided in the state
  • Electric utilities: 1.5% of GOR from service provided in the state
  • Electricity utilities that operate nuclear plants: 2% of GOR from service provided in the state

For all utilities, the following spending requirements apply:

  • At least 0.2% of GOR must go toward programs for low-income customers
  • A maximum of 10% of the minimum spending requirement may be spent on research and development projects
  • A maximum of 10% of the minimum spending requirement may be spent on solar energy projects
  • A maximum of 5% of the minimum spending requirement may be spent on other renewable and distributed generation projects
  • All electric utilities must include programs that encourage customer use of efficient lighting

Each utility must develop a Conservation Improvement Plan (CIP) every three years and file it with the Energy Division of the Department of Commerce. Actual spending and energy savings must be reported on an annual basis. Waste heat recovery (converted into electricity) and utility infrastructure projects may count toward the energy savings goal. S.F. 550 allows for natural gas utilities' purchases of biomethane to count toward the energy savings goal. Energy savings in excess of 1.5% may be carried forward for up to 3 years, except in the case of savings from infrastructure projects, which may carry over for 5 years. NGEA allows for electric utilities and natural gas utilities to apply to the Commissioner of Commerce for a lower spending requirement. Certain large facilities may petition to have their revenues excluded from calculations determining investment and expenditure requirements.

The Office of Energy Security must provide reports on the annual energy savings achieved through the CIPs. The 2012 Energy and Carbon Dioxide Savings Report covered 2009-2010.

  Information - Conservation Improvement Program
Minnesota Department of Commerce
Energy Division
85 Seventh Place East, Suite 600
St. Paul, MN 55101
Phone: (651) 296-4026
Fax: (651) 297-7891
Web Site:
NCSU - home
Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

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