Agenda

Welcome, candidates!

Sept. 8, 2014 Minnetonka, Minnesota

Why we are here: Energy drives our economy

Clean energy approaches offer opportunities to promote and

improve:

• Innovation

• Economic growth

• Human health and the environment

• National security

• Equity

• Local resilience

Intended takeaways of this briefing

• Learn more about issues that impact your constituents and

the state

• Understand interconnections among economic, social, and

environmental issues related to energy and transportation

• Inform your strategy, decision-making, and legislative

agenda

About Fresh Energy

Research and

Analysis

Advocacy Innovative

Policy Models

Stakeholder

Engagement

For more than 20 years, Fresh Energy has transformed

widely held economic and environmental ideas into

smart energy policy.

Shawntera M. Hardy

director, transportation &

built environment

J. Drake Hamilton director, science policy

Alison Lindburg

senior policy associate

Michael Noble

executive director

Erin Stojan Ruccolo

director, electricity markets

Sarah J. Lynch

managing director

Will Nissen

policy associate

Allen Gleckner

senior policy associate

Fresh Energy policy staff

Ross Abbey policy associate

Alexis Williams

policy associate

Agenda

Today’s

agenda

Today’s agenda • National climate context

• Minnesota energy profile

• Clean energy policy

• Transportation connections

• Recent polling information

• Wrap up, Q&A

Sources of MN Electricity

Context and Clean Energy topics

• National climate context

• Minnesota energy consumption

• Minnesota electricity generation

• Minnesota energy statistics and policy context

• Renewable Electricity Standard

• Solar

• Wind

• Electric Vehicles

• Transmission

• Energy Efficiency

Agenda

National Climate Context

Regulations

• Current limits on power plant emissions include mercury, sulfur, arsenic,

cyanide, lead

• Proposed limits include carbon dioxide

Estimated benefits of limits to date

• 160 thousand adult deaths prevented

• 1.7 million asthma attacks avoided

• 86 thousand emergency room visits avoided

• 3.2 million lost school days avoided

• 13 million lost work days avoided

• 30:1 return on investment from regulations

Last four decades of pollution regulations and associated costs

and benefits

Sources : U.S. Environmental Protection Agency, The Benefits and Costs of the Clean Air Act from 1990 to 2020 and

Congressional Budget Office.

Clean Power Plan intends to cut nationwide carbon pollution by

30 percent by 2030

• Proposed limit on carbon dioxide based on the Clean Air Act, June 2014

• Guidelines for states to follow in reducing carbon emissions from existing

fossil fuel-fired plants; will result in cutting soot and smog emissions by 25%

• States get to decide how to meet target at lowest cost in a manner that fits

their situation

• States in the driver’s seat now, with 2 years to develop an implementation

plan

– Minnesota Pollution Control Agency is holding open stakeholder meetings with

utilities, businesses, clean energy organizations and state agencies; advisory

group will begin in January to evaluate elements of the state plan, due in June

2016

“Extreme heat, heavy downpours, and flooding will affect infrastructure, health,

agriculture, forestry, transportation, air and water quality, and more. Climate

change will also exacerbate a range of risks to the Great Lakes.”

-- National Climate Assessment, 1958-2011

• Observed changes include 37% more heavy downpours for Midwest

• More of Minnesota’s rain is coming in 2- and 3- inch downpours

• Minnesota has had four 1-in-1,000 year floods just since 2004

• Minnesota has been the third fastest-warming state

Sources: Minnesota State Climatology Office; National Climate Assessment 2014

Minnesota is already seeing expensive impacts of climate change

Coal

16%

Natural Gas

26%

Petroleum

36%

Nuclear

8%

Hydro

0.29% Biomass

9%

Geothermal

0.06%

Solar

0.02%

Wind

4%

Net Imports

1%

Coal

Natural Gas

Petroleum

Nuclear

Hydro

Biomass

Geothermal

Solar

Wind

Net Imports

Minnesota’s energy consumption: statistics

Source: Energy Information Administration, 2012; Energy Consumption Estimates for Major Energy Sources in Physical Units, 1960-2012,Minnesota

A few facts about Minnesota’s energy profile

• Despite its use of significant oil, coal, and natural gas,

Minnesota has no fossil fuel resources

• Minnesota sends about $13 billion out of state and country

to buy fossil fuels, which could pay for:

– 53,000 teachers

– 9,000 police officers

– 30,000 entrepreneurship loans

– 10,000 new affordable homes

…and have billions of dollars left over

Source: Minnesota Department of Commerce Division of Energy Resources; Scoping an energy future study for Minnesota

Sources of MN Electricity

Other

(including

petroleum,

hydro)

2%

2012

Nuclear

23%

Natural

Gas

14%

Renewables

18%

Coal

43%

Minnesota’s electricity generation: statistics

From 1990 to 2010:

• Decrease in electricity

generation from coal: -13.1%

• Increase in renewable

generation: +10.3%

• Increase in natural gas: +6.9%

Result: On a path to a more diverse

energy mix

Source: Energy Information Administration, Electric power industry generation by primary energy source, 1990-2012, Minnesota

Sources of MN Electricity

Who makes Minnesota’s energy policy?

• The legislature

• Minnesota Public Utilities Commission (PUC)

• Responsible for regulating public utilities and setting rates

• Oversees utilities’ least-cost and integrated resource

planning

• Has required utilities to do side-by-side cost comparisons

on future options for our oldest coal plants

• Program implementation is largely directed by state agencies

in compliance with state and federal laws, regulations, codes,

and standards

Sources of MN Electricity

Major clean energy policies in Minnesota

Next

Generation

Energy Act

of 2007

• Renewable Electricity Standard (RES) of 25% renewable energy by 2025 (30% by 2020 for Xcel Energy)

• Reducing carbon pollution by at least 15% below 2005 levels by 2015, 30% by 2025, and 80% by 2050 across all sectors

• 1.5% Energy Efficiency Resource Standard for electric utilities, and 1% for gas utilities

Requires:

Progress toward state renewable goals

Utilities are currently on track or exceeding Renewable

Electricity Standard (RES) goals

• Minnesota has 3,000+ megawatts of installed wind

energy—enough to power 840,000 Minnesotan homes

• Several utilities stated that they would have added wind in

any scenario because it is the least-cost resource

• According to statewide utility reporting in 2012, there has

been almost no rate impact due to compliance with RES

Source: AWEA, 2014; Minnesota Wind Energy Fact Sheet

Sources of MN Electricity

Minnesota’s current solar energy policy

Solar electricity standard (2013) in addition to the RES

• Standard: 1.5% of public utilities’ electricity from solar by 2020

• Goal: 10% of the entire state’s electricity from solar by 2030

• Specific policies on

– Value of Solar

– Community Solar

.

Why more solar in Minnesota?

Sources: National Renewable Energy Laboratory, Lopez (2012), Lawrence Berkeley National Laboratory, Barboose et al. (2013)

• Solar energy is our single largest energy resource: Minnesota’s

technical solar potential exceeds 6 million megawatts (12,000

MW on rooftops alone)

>>> equivalent to supplying 150 times our state’s electricity

needs

• Solar prices are falling: from around $8/W per installed kW to

$4.5-$5.3 (depends on size and whether residential or

commercial) -- and are expected to continue to fall

• In March 2014, the PUC voted unanimously to require Xcel to

source energy from a large new solar project, marking the first

time that solar competed toe-to-toe with natural gas – and won

Sources of MN Electricity

Wind power generation in Minnesota

Wind as percent of total power generated by state, 2013:

1 Iowa 27.4%

2 South Dakota 26.0%

3 Kansas 19.4%

4 Idaho 16.2%

5 Minnesota 15.7%

6 North Dakota 15.6%

7 Oklahoma 14.8%

8 Colorado 13.8%

9 Oregon 12.4%

10 Wyoming 8.4%

Source: AWEA, 2014; Wind generation records & turbine productivity

Sources of MN Electricity

Standards Should Drive the Market

“What’s more important than

incentives is standards.”

“It’s more important that states like

Minnesota are leaders setting a

renewable energy standard and

let the market figure out how to do

it.”

David Mortenson

Clean Energy Economy Summit

July 2014

Sources of MN Electricity

Benefits to Minnesotans from the wind industry

Source: AWEA, 2014; Minnesota Wind Energy Fact Sheet ; Minnesota Department of Revenue Property Tax Division

• Minnesota’s wind resource could provide more than 24 times the state’s

current electricity needs

• An estimated 2000 jobs supported in 2012

• Capital investments of more than $5.6 billion in the state

• More than $10 million paid to landowners in lease payments annually,

providing diversified income to Minnesota’s farm families

• Since 2007, more than $42 million total in production tax payments to

counties as well as cities/townships

• Wind power is cost-effective in Minnesota—as evidenced by Xcel’s 750 MW

wind procurement in fall 2013, ahead of its RES compliance schedule; the

project is projected to save Xcel customers $225 million over 10 years

Sources of MN Electricity

Minnesota is a part of a regional transmission grid

MISO (Midcontinent Independent

System Operator)

• Grid operator in central US

• Runs the wholesale electricity

market, the transmission system,

and transmission system

planning

• Charged with ensuring electricity

system reliability

The plug-in electric vehicle (EV): a technology that crosses

boundaries

• New policy: Electric vehicle

“time of use” rate for customers

• Statistics: 2000 EVs on the

road in Minnesota, and

adoption rates are accelerating

• Long-term growth will depend

on:

• Ease of charging at home

and work

• Regulatory support

• Utility investment

• Fleet adoption

• Availability of “fast charging”

infrastructure

Source: HybridCars.com

Understanding energy efficiency

• Policies and programs often focus on both combined and specific approaches to

residential, commercial, and industrial activities

• State administration offices, utilities, and other entities run a range of different

programs to incentivize adoption of energy efficiency practices and products

Efficiency solutions are

easiest, cheapest energy

sources---yet we don’t

sufficiently use them

Progress toward state efficiency goals

Utilities are on track or exceeding efficiency requirements

• Increased energy efficiency reduces rates for consumers

because efficiency is the cheapest form of energy

• Xcel’s energy savings alone have been enough to eliminate

the need to build 10 new power plants, reducing rates for

consumers

• Based on utility reporting, for every $1 utilities that spent

on conservation, their customers save $5--and it’s hard to

get that level of return with any other investment

Is Minnesota on track in efficiency?

• Minnesota was a regional

leader in implementing its

Energy Efficiency

Resource Standard in

2010

• Other states in the region

and nationally have

adopted more aggressive

standards; a few have

halted implementation of

their standards

Source: Minnesota Database for State Incentives for Renewables and Efficiency

Is Minnesota on track in efficiency?

Residential and commercial building codes

The building sector consumes nearly half (47.6%) of all energy

produced in the United States

• Minnesota is currently updating its entire building code, including energy

codes

• MN is behind other Midwestern states in adopting updates to both

residential and commercial codes

• Residential: updates from 2006 to 2012 = 20% more energy efficient

than current code, and include improvements to insulation, HVAC,

windows, lighting, and mandatory air tightness test (blower door)

• Commercial: updates from 2004 to 2010/2012 = 30% more efficient

than current code, and include improvements to mechanical systems

and lighting

Is Minnesota on track in efficiency?

Untapped efficiency savings for large industrial consumers

Current Minnesota policy does not maximize industrial energy

efficiency for large users

>> 41 large industrial customers to date have opted out of the state’s

conservation programs; just 11 of these customers represent more

than 10 percent of the total electricity sales in the entire state

>> This represents a significant opportunity to engage industrial

customers to help them save money and improve productivity

Agenda

Minnesota’s

Transportation

Connections

Generate economic growth

and keep us competitive

More efficiently move goods, services and

people

Equitable access to jobs, housing, education and healthy living

Attract and retain talent to grow

Minnesota businesses

Greater accountability,

transparency and efficiency

The Future of Transportation – What Does it Look Like?

Transportation is

about more than a

specific mode – it is

about ensuring that

MN is a leader

• The state's 65 and older population will double between 2010 and 2035,

at which time Minnesota will have about 1.37 million older adults.

• Anticipated rural to urban shift

• Trend: Increasing urbanization and urban density, which presents new

challenges and opportunities for investment

• Minnesota is in a race to attract and retain young talent

• Minnesota is losing 20- and 30-somethings to places like Denver,

Portland, and Austin; millennials are looking for vibrant downtowns

and accessible transit

Sources of MN Electricity Case for a 21st century transportation system

Source: Metropolitan Council; ThriveMSP 2040 and MN State Demographer

Sources of MN Electricity

How behind is Minnesota on transportation investment?

The ASCE reports the following about Minnesota:

• 52% of our major roads are in mediocre or poor

condition

• Driving on roads in need of repair costs Minnesota

motorists $797 million a year in extra vehicle

repairs and operating costs – $250 per motorist

• 12.3% of bridges in Minnesota are considered

structurally deficient or functionally obsolete

The American Society of Civil Engineers (ASCE) produced the 2013 Report Card on

America’s Infrastructure which gave the nation’s infrastructure a grade of D+.

Source: American Society of Civil Engineers; 2013 Report Card on America’s Infrastructure

• Transit is unavailable or

sparse in many parts of

the state

• Safe bike and walk

connections are missing

in many communities

Sources of MN Electricity

How behind are Minnesota’s transportation investments?

Sources of MN Electricity

Investment in public transit is lagging

Sources: University of Minnesota Center for Transportation Studies;

American Public Transportation Association, Economic Impact of Public Transportation Investment, 2014 update

Miles of transitways (existing or under construction)

• Investment offers an

economic return of $4 for

every $1 invested

• Investment will lead to an

estimated 50,700 jobs

per $1 billion invested

Sources of MN Electricity

Minnesota needs to be connected

Sources of MN Electricity

Vision for a 21st Century Transportation System

Comprehensive

Balanced Sustainable

Dedicated

Agenda

Recent Polling Results

Key Results: Recent Polling on Energy Topics

• 421 randomly selected Minnesota

registered voters

• Survey interviews on landline,

wireless phones from 7/26/14-

8/3/14

• Bipartisan team with 25+ years of

experience conducted polling

• Margin of sampling error of +/- 4.9%

74%

64%

58%

49%

47%

23%

18%

16%

21%

28%

27%

36%

42%

39%

37%

38%

8%

6%

8%

19%

6%

24%

6%

15%

18%

8%

36%

0% 20% 40% 60% 80% 100%

Energy efficiency

Solar

Wind

Hydropower

^Natural gas

Nuclear

Biomass

^Coal

Strng. Supp. Smwt. Supp. Smwt. Opp. Strng. Opp. DK/NA

Minnesota voters support increasing the use of many

sources of energy

Q6a/b/d/e/f/h/i/l. ^Not Part of Split Sample

Here is a list of specific sources of energy. Please tell me whether you would support or oppose

increasing use of that source of energy to meet your state’s future needs.

Total Supp.

Total Opp.

95% 3%

93% 6%

85% 14%

84% 8%

88% 10%

62% 35%

55% 9%

55% 42%

A large majority of voters generally see many benefits to

renewables – security, reliability, jobs, affordability

Thinking about renewable energy like wind and solar power, please tell me if you think each of the

following phrases describe renewable energy – very well, somewhat well, not very well, or not at all

well.

49%

46%

35%

34%

30%

29%

30%

19%

36%

35%

44%

41%

42%

40%

34%

40%

7%

10%

12%

14%

15%

17%

21%

25%

5%

6%

5%

6%

8%

8%

10%

9%

5%

5%

7%

6%

7%

0% 20% 40% 60% 80% 100%

Allow us to be more self-reliant for energy

Will help to make our energy supply more

secure

Reliable

An increasing source of good jobs

Affordable

The best power source for our state

Increasingly able to replace coal and fossil fuels

Available here and now

Very Well Somewhat Well Not Very Well Not At All Well No Opinion/Don't Know

Total

Well

Total Not

Well

86% 12%

81% 16%

80% 17%

75% 20%

72% 23%

69% 24%

63% 31%

59% 34%

Demographic Groups Total Support Total Oppose DK/NA

Minnesota Voters 95% 3% 1%

Party

Democrats 98% 2% 0%

Independents 99% 0% 1%

Republicans 89% 8% 3%

Gender

Men 97% 3% 0%

Women 94% 3% 2%

Age

18-49 95% 5% 0%

50-64 100% 0% 0%

65+ 91% 4% 6%

Income

$0-$25,000 100% 0% 0%

$25,000-$50,000 94% 3% 4%

$50,000-$75,000 97% 3% 0%

$75,000-$100,000 97% 3% 0%

$100,00+ 94% 6% 0%

6h. Here is a list of specific sources of energy. Please tell me whether you would support or oppose increasing use of that

source of energy to meet your state’s future needs. Split Sample

Support for energy efficiency is near-unanimous across

demographic groups

35%

35%

14%

14%

3%

0% 15% 30% 45% 60% 75%

Strongly support

Somewhat support

Somewhat oppose

Strongly oppose

DK/NA

Total

Oppose

27%

Total

Support

70%

Seven in ten Minnesota voters back an increase in the

renewable energy standard.

16a. I would like to read you some ideas related to energy that might be proposed by people in Minnesota. Please tell me

whether it sounds like something you would support or oppose. Not Part of Split Sample

Requiring that Minnesota get 50% of its electricity from renewable sources

Total

Support

Total

Oppose

87% 10%

86% 13%

83% 16%

77% 21%

72% 25%

70% 26%

62%

58%

48%

44%

44%

32%

26%

28%

35%

34%

28%

37%

5%

6%

9%

9%

11%

13%

6%

7%

7%

12%

14%

13%

0% 20% 40% 60% 80% 100%

Making it more affordable for residents and businesses to install solar power at their homes

or businesses

Investing in retraining workers to work in clean energy jobs such as wind and solar

Increasing requirements for utilities to invest in energy efficiency improvements in homes and

businesses

Increasing state government investment in the development of clean, renewable energy sources

Closing down older coal-burning power plants and replacing them with greater use of renewable

energy and energy efficiency

Requiring utilities to double the amount of renewable energy they provide

Strongly support Somewhat support Somewhat oppose Strongly oppose Don't Know/NA

Large majorities of voters support policy proposals that advance

our clean energy economy

16h/i/j/m/n/o. I would like to read you some ideas related to energy that might be proposed by people in [STATE]. After you hear

each one, please tell me whether it sounds like something you would support or oppose. Split Sample

I should have the right to put solar on my own home and pay for it how I

choose.

We should ensure that all utilities and electricity customers in our state are

subject to the same clean, renewable energy requirements.

Our state should build additional electrical transmission lines so that our state can have greater access to wind-

generated electricity.

Utilities should be able to block residential customers from installing

solar power, energy storage and other similar systems on their property.

69%

54%

36%

26%

30%

44%

7%

8%

11%

18%

5%

71%

0% 20% 40% 60% 80% 100%

Strng. Agr. Smwt. Agr. Smwt. Disagr. Strng. Disagr. DK/NA

7d/e/f/h. Now I'm going to read you a series of statements about energy. Please tell whether you generally agree or disagree.

Split Sample

Voters have strong feelings about the way clean

energy should be generated.

Total

Agr. Total

Disagr.

95% 3%

84% 12%

80% 16%

9% 89%

Agenda

Wrap Up

Q & A

Agenda

www.fresh-energy.org

@freshenergy

Demographic Groups Total Support Total Oppose DK/NA

Minnesota Voters 93% 6% 1%

Party

Democrats 99% 1% 0% Independents 94% 5% 1% Republicans 84% 14% 2% Gender

Men 90% 8% 2% Women 95% 5% 0% Age

18-49 94% 5% 1% 50-64 95% 5% 0% 65+ 86% 13% 2% Income

$0-$25,000 96% 4% 0% $25,000-$50,000 94% 4% 3% $50,000-$75,000 93% 5% 2% $75,000-$100,000 100% 0% 0% $100,00+ 92% 8% 0%

6l. Here is a list of specific sources of energy. Please tell me whether you would support or oppose increasing use of that

source of energy to meet your state’s future needs. Split Sample

Support for solar power is only slightly lower than for energy efficiency.

Demographic Groups Total Support Total Oppose DK/NA

Minnesota Voters 85% 14% 1% Party

Democrats w/Leans 95% 5% 0% Independents/Undecided 87% 13% 0% Republicans w/Leans 71% 27% 2% Gender

Men 84% 15% 1% Women 87% 13% 0% Age

18-49 91% 9% 0% 50-64 76% 21% 2% 65+ 84% 16% 0% Income

$0-$25,000 88% 12% 0% $25,000-$50,000 91% 9% 0% $50,000-$75,000 83% 17% 0% $75,000-$100,000 88% 12% 0% $100,00+ 86% 14% 0%

6f. Here is a list of specific sources of energy. Please tell me whether you would support or oppose increasing use of that

source of energy to meet your state’s future needs. Split Sample

At least seven in ten voters from every major demographic group back wind power.

(Wind)

A solid majority of voters generally think that increasing renewable energy and

energy efficiency projects will have positive job implications

Q10 & Q12. Split Sample

Increasing the use of clean, renewable

energy sources like wind and solar power…

Energy efficiency projects like weatherizing and

insulating buildings, and upgrading appliances

and technology in homes and businesses…

65%

16%

9%

10%

0% 15% 30% 45% 60% 75%

Will create new jobs in Minnesota

Will not affect jobs in Minnesota

Will cost jobs in Minnesota

All/None/Don’t Know

70%

16%

6%

8%

0% 15% 30% 45% 60% 75%

A majority also think that both increased energy efficiency and

renewable activities will reduce energy costs

Increasing the use of clean, renewable

energy sources like wind and solar power...

Energy efficiency projects like weatherizing and

insulating buildings, and upgrading appliances

and technology in homes and businesses ….

48%

22%

21%

10%

0% 15% 30% 45% 60% 75%

Will reduce energy costs in Minnesota

Will increase energy costs in Minnesota

Will not affect energy costs in Minnesota

All/None/Don’t know

62%

15%

16%

7%

0% 15% 30% 45% 60% 75%