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S.F. No. 1098 - Energy Optimization Project Goal; Cogeneration Projects Inclusion in Energy Conservation Plans
Author: Senator D. Scott Dibble
Prepared By: Carlon D. Fontaine, Senate Counsel (651/296-4395)
Date: March 5, 2015


Section 1 amends the definition of “electric utility infrastructure project” by changing the term to “energy optimization projects” and includes projects owned by an electric utility that replace or modify electric utility infrastructure, conserve energy by waste heat recovery converted into electricity or cost-effective cogeneration projects, or are other infrastructure improvements. Establishes an energy optimization goal for public utilities providing electric service.  Requires those electric utilities to include annual energy savings from energy optimization projects in its energy conservation improvement plan. Requires the savings to be equal to or greater than 0.5 percent of gross annual retail energy sales, based on the most recent five-year weather-normalized average.  Excludes the savings from being used to meet the energy-saving goals for energy conservation improvement expenditures.  Requires PUC approval of the electric utility infrastructure costs to achieve the savings.

Section 2 increases the energy savings policy goal from 1.5 percent to 2 percent of annual sales of electricity and natural gas.

Section 3 makes conforming changes to terminology.

Section 4 makes conforming changes to terminology and removes obsolete language.  Requires the Commissioner of Commerce by 2017 to adopt a filing schedule to have utilities and associations operating under an energy-savings plan consistent with the new goals.  Prohibits the Commissioner of Commerce from approving a plan of a public utility providing electric service having an annual energy-savings goal of less than 1.5 percent of gross annual retail energy sales from energy conservation improvements and less than 1 percent for public natural gas utilities.

Section 5 allows a utility or association to include installation of cogeneration projects in its energy conservation plan programs.  Prohibits the energy savings from cogeneration projects from being counted toward the CIP goal, but if the conservation plan is approved, allows the savings to be counted toward energy savings above the minimum percentage and to be eligible for a performance incentive.  Requires the Commissioner of Commerce to establish by June 1, 2016, a methodology for attributing savings from a cogeneration project to the energy-savings goals and the criteria for determining the cost-effectiveness of a proposed cogeneration project.  Requires the Commissioner of Commerce to encourage participating electric and gas utilities to file combined energy conservation programs that promote the installation of cost-effective cogeneration projects and encourage collaboration between utilities.


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