APPENDIX E CONSERVATION IMPROVEMENT PROGRAM APPROVAL LETTERS 2018-2032 INTEGRATED RESOURCE PLAN Submitted to the Minnesota Public Utilities Commission Docket No. ET2/RP-17-286 April 28, 2017 April 7, 2015 Jeffrey Haase Energy Efficiency Coordinator Great River Energy 12300 Elm Creek Blvd. Maple Grove, MN 55369 RE: All-Requirements Members 2013 CIP Results and 2015 Plan Dear Mr. Haase: Thank you very much for Great River Energy’s (GRE) efforts to report 2013 Conservation Improvement Program (CIP) results and a 2015 CIP plan in ReportingESP on behalf of GRE’s all-requirements members. My staff has finished reviewing this information. 2013 CIP RESULTS Each utility and association has an annual energy savings goal equal to 1.5 percent of gross annual retail sales.1 Based on the information provided, GRE’s all-requirements members saved a total of 99,134,162 total savings kWh at the generator in 2013, equivalent to 1.17 percent of average 2009-2011 retail sales, excluding sales to any CIP-exempt customers.2 We appreciate GRE’s energy efficiency and conservation achievements in 2013 and those of its members. A summary of energy savings by member is as follows: Table 1: 2013 Energy Savings Results Member Organization Energy Savings (kWh) % of Retail Sales Arrowhead 359,054 0.55 % BENCO 5,855,115 2.33 % Brown 974,294 0.94 % Connexus 20,297,090 1.04 % Cooperative 332,227 0.37 % Dakota 26,430,124 1.42 % East Central 8,004,124 0.89 % Elk River 2,378,097 0.96 % Goodhue 929,016 1.06 % 1 See Minn. Stat. §216B.241 subd. 1c (b). 2 Minnesota Statutes 216B.241 subd. 1c(b) states that the energy savings goal is to be calculated based on the most recent three-year weather-normalized average. This review was based on 2009-2011 retail sales as reported in ESP®. Great River Energy – All-Requirements Coops Page 2 Itasca Mantrap 2,898,673 1.45 % Kandiyohi 1,599,660 1.04 % Lake Country 9,340,364 1.52 % Lake Region 4,474,716 1.07 % McLeod 1,233,949 0.88 % Mille Lacs 1,319,006 0.69 % Nobles 1,443,338 1.25 % North Itasca 1,310,148 2.63 % Runestone 1,638,085 0.76 % Stearns 5,967,501 1.22 % Steele Waseca 1,360,850 0.68 % Todd Wadena 988,730 0.64 % TOTAL 99,134,162 1.17 % Each cooperative electric association and municipality utility is required to invest a minimum of 1.5 percent of its Minnesota gross operating revenues (GOR), excluding revenue from any CIP-exempt customers, on CIP.3 For 2013, 2011 revenues were the baseline for establishing these minimum spending requirements. Based on the information provided, Great River Energy Co-ops - All- requirements’s members invested a total of $15,575,524 in 2013, approximately 1.73 percent of 2011 Minnesota GOR, excluding revenue from any CIP-exempt customers. Additionally, Minnesota Statutes require each electric utility and natural gas municipal utility to invest a minimum of 0.2 percent of its residential Minnesota GOR on CIP programs that directly serve the needs of low-income persons, including renters.4 For 2013, 2011 revenues were the baseline for establishing the low-income spending requirements. Each member utility is responsible for meeting the low-income spending requirement. While Department policy currently allows cooperatives and municipalities to count a portion of general residential spending as low-income, the Department strongly encourages all utilities to meet their low-income spending requirements through programs that directly serve the needs of low-income persons, including renters. Also, while utilities may claim energy savings that result from EUI projects on top of a minimum savings goal of one percent from conservation improvements, provided the EUI projects results in energy efficiencies greater than what would occur through normal maintenance activity,5 Minnesota Statutes do not allow spending on EUI projects to count towards the CIP spending requirement.6 Therefore, total 2013 CIP spending does not 3 See Minn. Stat. §216B.241 subd. 1b. 4 See Minn. Stat. §216B.241 subd. 7(a) and (c). 5 Minn. Stat. §216B.241 subd. 1c (d) allows a utility or associated to include in its energy conservation plan energy savings from electric utility infrastructure projects. 6 Minn. Stat. §216B.241 subd. 1b (b) requires each electric cooperative association and electric municipal utility to spend 1.5% of gross operating revenues annually on energy conservation improvements. Minn. Stat. Great River Energy – All-Requirements Coops Page 3 reflect any EUI spending. The Department is supportive of EUI projects that increase generation and distribution efficiencies and appreciates that utilities are reporting information about these investments through ReportingESP. A summary of CIP investments by member is as follows: Table 2: 2013 Actual Expenditures Member Total CIP Low-Income Organization Total CIP (% of GOR) Low-Income (% of Res GOR) Arrowhead $112,744 1.36 % $12,373 0.22 % BENCO $514,337 1.81 % $49,585 0.24 % Brown $124,124 1.24 % $9,252 0.14 % Connexus $2,476,346 1.19 % $371,377 0.27 % Cooperative $137,576 1.36 % $17,908 0.28 % Dakota $3,852,053 2.10 % $391,043 0.37 % East Central $1,652,068 1.60 % $90,865 0.13 % Elk River $417,267 1.46 % $28,629 0.30 % Goodhue $221,321 2.16 % $15,529 0.16 % Itasca Mantrap $449,339 2.27 % $22,159 0.17 % Kandiyohi $270,685 1.57 % $7,345 0.06 % Lake Country $1,322,757 1.87 % $148,191 0.26 % Lake Region $788,367 1.83 % $71,867 0.21 % McLeod $372,637 2.50 % $22,499 0.18 % Mille Lacs $379,527 1.77 % $40,798 0.28 % Nobles $134,284 1.19 % $18,833 0.20 % North Itasca $107,504 1.58 % $8,797 0.15 % Runestone $543,281 2.40 % $45,147 0.23 % Stearns $947,148 2.09 % $59,495 0.27 % Steele Waseca $358,141 1.62 % $13,337 0.10 % Todd Wadena $394,018 2.50 % $26,246 0.21 % TOTAL $15,575,524 1.73 % $1,471,277 0.25 % In addition to meeting the energy savings goal and the total and low-income spending requirements, Minnesota Statutes §§216B.241 and 216B.2411 contain provisions that utilities must meet, including the following: Research and Development (R&D): Each utility and association may spend up to 10 percent of a utility’s minimum spending requirement on R&D (§216B.241, subd. 2(c)). §216B.241 subd. 1(e) specifically excludes electric utility infrastructure projects from the definition of energy conservation improvements. Great River Energy – All-Requirements Coops Page 4 Distributed and Renewable Generation (DRG): Each utility and association may spend up to 5 percent of a utility’s minimum spending requirement on DRG (§216B.2411, subd. 1). Utilities may not use green pricing programs to achieve CIP requirements. Green Building Standards: Each utility and association must offer one or more programs that support green building certification of commercial buildings and that support goals consistent with Sustainable Buildings 2030 (SB 2030) standards (§216B.241, subd. 1f(c) and §216B.241, subd. 9(e)). We recommend that at a minimum, utilities offer subsidies for design assistance and/or certification expenses on a case by case basis within their commercial and industrial program(s). Load-Management Activities: Each utility and association may use load-management activities to achieve up to 50 percent of a utility’s minimum spending requirement (§216B.241, subd. 1b(e)). Electric Utility Infrastructure (EUI): As stated above, energy savings from EUI projects count towards CIP energy savings goals. However, according to the Minnesota Statutes, spending on EUI projects may not be counted towards CIP spending requirements. For 2013, GRE’s all-requirements members: • Collectively did not achieve the statutory energy savings goal of 1.5 percent of gross annual retail energy sales excluding sales to any CIP-exempt customers, equivalent to 127,479,516 kWh in 2013. • Collectively met the statutory minimum spending requirement of 1.5 percent of gross operating revenue, excluding revenue from any CIP-exempt customers, equivalent to $13,525,223 in 2013. • Collectively invested $0 on DRG. This amount complies with the statutory spending cap, equal to $676,261 in 2013. • Collectively invested $11,321,734 on conservation programs, equivalent to 83.71 percent of the total CIP minimum spending amount of $13,525,223. This amount complies with the minimum spending amount on conservation programs (programs designed to save energy rather than reduce peak demand and/or shift energy use to off-peak hours), 50 percent of a utility's total minimum spending amount. The following member organizations invested at least 0.2 percent of their Minnesota residential GOR on low-income customers through CIP: • Arrowhead • BENCO • Connexus • Cooperative • Dakota Great River Energy – All-Requirements Coops Page 5 • Elk River • Lake Country • Lake Region • Mille Lacs • Nobles • Runestone • Stearns • Todd Wadena The following member organizations did not invest at least 0.2 percent of Minnesota residential GOR on low-income persons through CIP: • Brown • East Central • Goodhue • Itasca Mantrap • Kandiyohi • McLeod • North Itasca • Steele Waseca 2015 PLAN REVIEW For 2015, the savings goal and minimum spending requirements are calculated as follows: • Savings Goal = 1.5 percent of 2011-2013 annual average retail energy sales, excluding sales to any CIP-exempt customers • Minimum Total Spending = 1.5 percent of 2013 GOR, excluding revenue from any CIP-exempt customers • Minimum Low Income Spending = 0.2 percent of 2013 residential GOR Because GRE had not obtained internal approval of its 2015 budgets and goals by member by the September 5, 2014 deadline, GRE was granted approval to initially enter its 2015 plan at the aggregator-level, with the understanding that budgets and goals would be entered for each member following plan approval.