News of the week

Xcel proposes time-of-use billing system with opt-out provision

Xcel Energy is proposing a significant shift in how their residential customers in Minnesota are billed for electricity, aiming to replace the current flat hourly rate with a variable "time-of-use" (TOU) rate. The new TOU rate design would charge more for power during periods of high demand, with rates between 3 pm and 8 pm on weekdays being twice the standard rate. The peak rates would be seven times higher than the proposed overnight off-peak rate between 12 am to 6 am. Xcel wants TOU to become the default billing system for all residential customers, though an opt-out provision would be available.

The proposal is based on a successful two-year pilot project that showed a modest shift in energy consumption during peak periods. The move is enabled by Xcel's installation of over 500,000 smart meters, allowing customers to track their energy use online. The company believes this change will optimize the use of abundant wind energy available during non-peak hours and help avoid the necessity of building additional power plants. Xcel wants TOU to become the default billing system for all residential customers, though an opt-out provision would be available. The company aims to implement dynamic pricing in 2025.

To read more, click here.

Hydropower resilience alleviates Pacific Northwest's winter challenges

Hydropower played a crucial role in sustaining the Pacific Northwest's power grid amid severe winter weather according to a new report from the Public Power Council. As storms brought record cold, snow, and ice to the region, hundreds of thousands experienced weather-driven power outages. However, data indicates homes and businesses with power were largely supported by the region's renewable hydroelectric projects.

During the cold spell, federal and non-federal hydropower accounted for about 70 percent of the electricity consumed across the Northwest, with the Lower Snake River Dams producing over 1,000 megawatts (MW) on average. The region’s only nuclear power plant also was producing 1,165 MW of electricity for the duration of the cold period.

To read more, click here.

FERC rejects MISO interconnection cap proposal

The Federal Energy Regulatory Commission (FERC) has rejected a proposal to cap the size of the Midcontinent grid operator's interconnection queue study clusters. FERC argued the proposed exemptions to the cap could undermine its purpose and potentially impact the Midcontinent Independent System Operator's (MISO) ability to address near-term power supply shortages.

Commissioner Mark Christie likened MISO's situation to a homeowner trying to save a burning house. “MISO is trying to train the most readily available water hose on the fire as quickly as possible to save the house, an action the states in MISO support,” Christie said. “The majority acknowledges the house is on fire and that the hose MISO has chosen will likely work, but then, in classic Kafkaesque fashion, says MISO cannot use the hose. Meanwhile, the house burns.”

Grid operators across the U.S. are grappling with significant interconnection queue backlogs, and MISO's 2022 cycle exceeded peak load by about 50 gigawatts. While FERC approved other reforms proposed by MISO, it cited flaws in the cap proposal, emphasizing concerns about exemptions and their potential impact on efficiency and transparency.

To read more, click here.

Cold Weather Rule resources for utilities and customers

The frigid snap of January weather in the past week served as a reminder of Minnesota’s Cold Weather Rule. As you know, from October 1 to April 30, Minnesota's Cold Weather Rule (CWR) states that residential utility customers are entitled to certain protections before their services are discontinued. 

Did you also know MMUA has prepared a guide for utilities to help you understand the law as well as a brochure summarizing the CWR for municipal utility customers? Both of these resources are available to members by signing into the MMUA website and searching under “Management Tools.” Please feel free to use these tools as you promote understanding of the law. For any questions, please contact Bill Black of MMUA's Government Relations team.

Funding opportunities

Implementation grants for stormwater resilience

The Minnesota Pollution Control Agency (MPCA) announced a new $35 million grant program to prepare Minnesota’s aging stormwater infrastructure for climate change. Cities and local governments can apply for funding to upgrade their stormwater systems with climate-smart improvements that will protect drinking water and prevent flooding.

Examples of projects eligible for funding through this program include stormwater retention ponds, improvements to streets to support rainwater drainage, increasing the capacity of stormwater pipes, planting rain gardens, and others. The MPCA will host an informational meeting on the grant program on Monday, February 12. Applications are on April 11.

To learn more, click here.

Looking ahead

MMUA changes dates for 2024 Legislative Conference

To avoid conflicts with other associations who recently announced their to be in St. Paul, and to maximize the opportunity for members to connect with their legislators, MMUA has decided to move the 2024 Legislative Conference back one week from what was previously announced.

The conference will now be held March 26-27 at the Double Tree by Hilton in downtown St. Paul. Registration for the event will open later this week; watch for an announcement in your email and in a future edition of The Digest. In the meantime, you are encouraged to book a room as part of the MMUA hotel block. Reservations can be made online using this link. The block closes on February 24.

For any questions, please reach out to Rita Kelly. We look forward to seeing you in St. Paul!

As always, thank you for your association with MMUA and your commitment to delivering excellent service through locally owned utility assets in your community. Have a great week!

Christian Glanville

Marketing and Member Relations Manager

Direct: 763.746.0727 / Cell: 612.655.0598

Fax: 763.551.0459

cglanville@mmua.org | www.mmua.org

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