Minneapolis’ once-a-decade chance to fight for energy and the climate

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If Minneapolis city leaders truly care about addressing climate change and energy affordability for all, they must demand accountability from their energy utilities — Xcel Energy and CenterPoint Energy. Until year’s end, a rare opportunity is open to secure utility commitments to the city’s ambitious climate aims, but city leaders must act before the window closes, likely for another decade.

The city’s agreements with CenterPoint and Xcel expire on Jan. 1, 2025, and a successful negotiation could protect current and future city residents from the high costs of climate change. A failure will leave the city scrambling to do too much with too little. Ten years ago, dire climate projections and public outcry motivated city leaders to turn what had been an obscure rubber-stamping process of city-utility “franchise agreements” into a robust negotiation with the electric and gas utilities. With two-thirds of Minneapolis greenhouse gas emissions coming from electricity and methane gas use, the city employed a credible threat to take over the utilities to gain meaningful concessions from Xcel and CenterPoint in the formation of the Minneapolis Clean Energy Partnership. The partnership gave the utilities an opportunity to prove their willingness to aid the city’s ambitious climate aims, while adding stronger accountability and shorter franchise terms of five or 10 years. Ten years later, the results are clear: Utilities are doing little absent state policy or regulatory requirements, and city leaders must negotiate aggressively with Xcel and CenterPoint or risk failure on urgent climate goals.

The utilities can do much more than they have, and the city is well positioned to negotiate for better service. The city has several options to strengthen accountability in its next franchise contracts, including shorter renewal terms, a simple majority vote threshold to terminate the agreement and accountability metrics such as those included in a franchise contract between Xcel and the city of Boulder, Colo. To advance its climate aims, the city should secure the power to peg its franchise fees to the carbon intensity of the supplied energy. By also requiring utilities to deploy inclusive investment programs, the city could use new revenue paired with incoming federal funding to bust the usual upfront cost and minimum credit score barriers to home and business investment in energy efficiency, electrification and clean energy. The new contract should include provisions that protect the city’s right to good utility service, including city access to information about the age, condition and replacement schedule for utility assets — poles, wires, transformers, etc. — within city boundaries. Finally, the contract should set clear expectations that utilities should not count on revenue from the city’s customers beyond the term of the franchise contract unless they deliver.

The utilities can separately provide important tools to aid the city’s climate action. From Xcel, the city should negotiate the right to buy clean electricity directly from third parties and for a right of first refusal for communities to own energy systems built locally (the same right Xcel enjoys for its transmission projects). From CenterPoint, the city should demand an end to kickbacks for installing gas appliances, ban the expansion of methane gas infrastructure and insist on major investments in clean heat options such as community or networked geothermal energy systems.

The city can use the negotiations to motivate all three parties — the city and both utilities — to work harder and to hold them accountable for their failures. Under the Clean Energy Partnership, the city made significant strides on its climate commitments, including new policies to require energy disclosure when properties are sold or rented, zero-interest financing for energy-burdened households, and matching grant funding to support clean energy and energy efficiency on homes and businesses. The partnership has also, albeit slowly, encouraged the energy utilities to improve their climate commitments, including new multifamily energy efficiency programs and marketing partnerships with the city. But ultimately, the partnership’s terms have allowed utilities to stall or renege on promises such as inclusive financing or the Resilient Minneapolis program that would have meant more local clean energy.

Minneapolis Mayor Jacob Frey, Council President Elliott Payne and the City Council have an opportunity to seize on the initiative generated 10 years ago when public outcry led to the creation of this partnership. Citywide emissions aren’t falling fast enough, local solar isn’t being built quickly enough, and the city’s homes and businesses remain far too reliant on methane gas for heating and hot water. If city leaders are serious about meeting their own energy-affordability and climate goals, they must not let the utilities dictate the terms of the negotiation, nor let the opportunity die quietly in a dark room full of attorneys. The task of addressing climate change is monumental, and the utilities responsible need to be part of the solution. Minneapolis leaders can act this year to make sure they do.

John Farrell is co-director of the Institute for Local Self-Reliance and director of the Energy Democracy Initiative. He is also a member of the advisory committee to the city’s Clean Energy Partnership and can be reached on X at @johnffarrell.