The city of Minneapolis had a rather large issue on the electoral agenda this year: whether or not residents should vote on the municipalization of the electric and natural gas utilities in the city, currently provided by Xcel Energy and CenterPoint Energy. This notion was largely a result of a campaign of grassroots activism spearheaded by a local coalition of energy and environmental groups and citizens called Minneapolis Energy Options. This group describes its goal as securing “clean, affordable, reliable and local energy” for Minneapolis, and its main tactic in this regard was to place a question on November’s electoral ballot (where it would share billing with several dozen mayoral and city council candidates) asking residents if they wished to grant the city authorization to start the process of municipalization. There are many municipal utilities around the country, including many right here in Minnesota, and the city of Boulder, CO recently voted to municipalize their electrical utilities. Supporters of the measure argued that the only way to secure the most renewable energy was to put the infrastructure directly in the hands of the city instead of a profit-driven, shareholder-run enterprise. They also argued that residents had a historic opportunity this year to take a hard look at a municipal utility given that the decades-long franchise agreements with the two energy companies are set to be re-negotiated next year. Not surprisingly the two utility companies struck back almost immediately, with Xcel Energy sending a letter to its many customers urging them to oppose the idea. Xcel also sent out a spokesman to local neighborhood groups and businesses urging them to contact the city on these matters. Over the summer months as the campaign continued the MEO group reached an agreement with CenterPoint over its renewable and other energy goals, and the city of Minneapolis is currently working with Xcel on its own negotiations. The Minneapolis City Council also resolved not to place a question on the November ballot.
This idea first came to fruition in the spring of the year, when MEO urged citizens to go out to the local precinct caucuses to speak out in favor of a municipal utility resolution (disclosure: your loyal Examiner did caucus for this idea and therefore does not pretend to be a neutral party in these matters). Due to the differing circumstances of an off-year election cycle the DFL did not generally allow the resolutions to come up for a vote, either at the precinct caucus or at the ward conventions. However, there was significant support at the city-wide mayoral convention for the municipal utility idea. As the idea spread through the populace, Xcel Energy struck back with its own arguments, namely that the cost of municipalization would be prohibitive and that they were doing just fine as stewards of the city’s energy infrastructure. Your Examiner was lucky enough to view Xcel’s presentation twice over the course of the year and can offer some examples of their arguments. The main issue Xcel was concerned about in their presentation was cost: the company claimed that it would “cost the city billions to purchase” the infrastructure and that this would be borne “by only Minneapolis customers.” They also claimed that there was “no guarantee of ‘cleaner’ energy” with the municipal utility, that Xcel was well on its way to becoming a leader in renewable energy as the “No. 1 wind energy provider in the U.S.” and that the company has “saved enough energy since 1992 to avoid building 10 power plants.” The energy giant also argued that a municipal utility would have very limited oversight as compared to Xcel, which has to negotiate with the Public Utility Commission in Minnesota for every rate increase. Stephen Wilson, neighborhood and community outreach coordinator for Xcel Energy, said flatly in an interview that MEO never got across what they wanted from his company in terms of renewable goals. He also stated his opinion that the environmental organization had “no skin in the game,” saying that the franchise negotiations took place between Xcel and the city. That being said Mr. Wilson also expressed his satisfaction with this “exhausting exercise” and thought that it was a great educational opportunity for both residents and Xcel customers to find out more about their utility and how it operates. The company also had in its corner the fallout from the disastrous storms that hit the city in June 2013, saying that only they had the resources necessary to regain power. In the end, after a packed city hearing in which many voiced their opposition to the municipal utility plan, Minneapolis announced renewed negotiations with Xcel Energy on collective energy goals. Mr. Wilson described some of these arrangements with the city, including increases in renewable energy, a “joint goal” of reducing CO2 emissions by 30% by 2020, and “increased reliability reporting.” He said the ultimate defeat of the ballot measure at the Council was a good example of local democracy.
After many months of campaigning MEO was beginning to get the attention of the mayoral candidates. In one memorable exchange candidate Mark Andrew, who had issued statements of support for the campaign earlier in the year, publicly blasted the idea as “reckless and irresponsible” at a press conference in July. This issue also took hold in the local City Council race for the thirteenth ward, with DFL candidate Linea Palmisano generally supportive of the MEO campaign and DFL candidate Matt Perry announcing his opposition last month. Reached for comment on these issues, Ms. Palmisano stated:
I don't see (and haven't seen) us ever going toward municipalization in this space. But, I have always thought that looking at all the options is the fiscally responsible thing to do. It's too early to tell where this type of good faith agreement will land, and in my professional experience I have seen some of the greatest, most impactful innovation take place through public-private partnerships. I am hopeful we can achieve something like that here (with Xcel and the City). If I am your next City Councilperson, you can bet I'll work toward it being so.
The mere fact that the campaigns were discussing energy issues was a victory for MEO, according to campaign coordinator Dylan Kesti, who said he was “undoubtedly” satisfied with the results of the operation. In an interview Mr. Kesti expressed optimism for the city’s energy future, saying his group would now be “circling back to common organizations” for its next steps and that city residents understood the “status quo is not good enough” when it comes to how they get their energy. He also said he “applauds the city and mayor” for their actions on climate change.
As the campaign continued, MEO entered into negotiations with CenterPoint Energy regarding the company’s renewable energy and conservation goals going forward. Becca Virden, a spokeswoman for the company, stated that MEO and CenterPoint’s “goals have been aligned the whole time” and stressed that natural gas is much different from electricity so the negotiations reflected that. She also pointed out the fact that CenterPoint has its own $25 million conservation program. Nick Mark, a manager for conservation and renewable energy for CenterPoint, described the negotiations as taking place over six months and being “generally cordial” and “never antagonistic.” The negotiations proved fruitful, ending up with a memorandum of understanding that outlines some new energy initiatives provided by the natural gas giant. The first of these was an “expansion of conservation programs” which include payment loan assistance, a program to test out retrofitting options, and a new study of “energy savings potential...within the City of Minneapolis.” The next set of initiatives fall under the aegis of “reducing climate impact.” These include helping their customers track their energy consumption, “combined heat and power,” using more “renewable energy technologies” and reporting methane gas leakages to the city of Minneapolis. Finally CenterPoint committed to “equity in employment,” which they describe as “a series of strategies designed to address racial disparity in employment.” Mr. Kesti contended that these negotiations were a “show of great leadership” and that he was “excited to see” the company execute them.
Once these agreements were announced the municipal utility idea seemed to lose some steam, especially after the City Council voted not to place the question on the ballot. However, renewable energy and conservation have not left the public sphere, with many Council Members and mayoral candidates still voicing support for pushing these energy companies to continue down the path they’ve negotiated. Reached for comment, Council Member Betsy Hodges (Ward 13) released this statement:
The renewed commitment between the City of Minneapolis and Xcel Energy to have a substantive dialogue about new opportunities to deliver affordable, efficient, renewable energy to Minneapolis residents and businesses represents a major step forward. I therefore stood with the City Council as we took an affirmative vote not to put that issue on the ballot. I enthusiastically applaud Mayor Rybak for keeping the right stakeholders at the table to have a serious conversation about the future of energy in Minneapolis, resulting in a win-win outcome for Xcel, Minneapolis Energy Options, the City of Minneapolis, and our community.
Our new understanding ensures that renewable energy will be more widely used and carbon emissions will be reduced, bringing us even closer to our goal of an environmentally-friendly, 21st-century city. It also demonstrates the importance of having a Mayor who knows how to bring parties with diverse interests together to find common ground and creative solutions—and that this can be accomplished at the same time as we keep all viable options on the table and exert the proper leverage to keep Minneapolis’ partners accountable and competitive.
In an Op/Ed piece for MinnPost, Council Members Hodges and Gordon also wrote about the need for this dialogue to continue into the next year:
All of this progress has come from the City Council’s decision to make energy a priority. We are pleased to say that this last Friday, the Council followed through, unanimously adopting a robust framework we coauthored for our energy future. Because of that framework, the city is now committed to develop a clear energy vision through our Energy Pathways Study, to fight at the Legislature for the flexibility we need to include that vision in our franchise agreements, to start negotiating those agreements now and, most importantly, to keep all of our options open. The City Council will hear a report in June of 2014 on the progress of franchise negotiations, and will have the flexibility to pursue other options if those negotiations have not produced tangible results.
The Minneapolis Energy Options campaign did a lot to push energy issues to the forefront of the municipal campaigns occurring in Minneapolis this year, even if the ultimate goal (a question on the ballot regarding municipalization) did not come to fruition. Energy and how citizens get it and use it is one of the most important issues of our time, especially when it comes to how it affects the planet. Climate change is only going to worsen as this country continues with its plan to use up all the remaining “dirty” energy sources, both domestically and all over the world. The only way to combat this is to switch to more renewable energy sources. The MEO campaign and its idea to study the notion of a municipal utility is, in this reporter’s mind, leading the charge down the right path toward bold solutions to our energy woes both in the city of Minneapolis and beyond. Getting people to think about how they get their energy and the companies that provide it is a big step in an election year in which the major issues have been transportation, property taxes, racial disparity and schools. MEO is to be commended for its efforts to add another important subject to the conversation. This is an issue that is not going away and will come to affect every aspect of our modern lives. It will be interesting to see what happens both to environmental groups such as MEO as well as giant corporations like Xcel as more and more citizens realize that the way we get energy must change if we are to survive as a species on this planet.