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Report: State's CIP programs to save Minnesotans estimated $2.6 billion

Minnesota’s utility conservation improvement programs are working. According to the Minnesota Conservation Improvement Program Energy and Carbon Dioxide Savings Report for 2010-2011, issued recently by the Minnesota Department of Commerce, Minnesota’s electric and gas utilities achieved substantial energy savings through conservation improvement programs in 2010 and 2011. Their measures will save Minnesotans an estimated $2.6 billion over the average 15-year life of the measures and will prevent a projected 29.4 million tons of carbon dioxide emissions in Minnesota.

State law requires each Minnesota utility, with the exception of the smallest municipal natural gas utilities, to operate a conservation improvement program (CIP). CIPs offer incentives for a wide variety of energy-related improvements in homes, farms, commercial buildings and manufacturing facilities. Some examples of typical programs include incentives for high-efficiency lighting, heating, ventilation and air-conditioning (HVAC) equipment, and design assistance for energy efficient new commercial buildings. 

The CIP Energy and Carbone Dioxide Savings Report demonstrates just how large of an impact CIP programs have had in recent years. Energy savings achieved by Minnesota’s electric and gas utilities through CIP during that time period will save Minnesota customers roughly $2.6 billion over the average 15-year life of the measures. For every $1 put into CIP programs statewide during this period, Minnesotans will see an average return of $5.69 over the life of the measures.

In addition to the financial benefits received from these energy savings, nearly 2 million tons of carbon dioxide is projected to be avoided on an annual basis, equivalent to removing approximately 370,700 cars from the road for one year.

The report also shows that in 2010-2011, Minnesota’s electric utilities implemented CIPs that resulted in annual savings of nearly 1.8 million megawatt-hours of electricity. The conservation efforts of natural gas utilities resulted in annual savings of over 5.4 million dekatherms. Combined, electric and gas CIP programs in 2010-2011 saved enough energy to heat, cool, and power over 102,000 homes in Minnesota annually.

The Next Generation Energy Act of 2007 established an energy savings goal of 1.5 percent of average retail sales for each electric and gas utility beginning in 2010. Legislation in 2009 set an interim savings goal of 0.75 percent over 2010-2012 for gas utilities.

Utility CIPs continued their upward trend in savings achieved in 2010 and 2011, the first two years that the 1.5 percent Energy Efficiency Resource Standard (EERS) has been in effect. Although individual utility performance varied, Minnesota electric utilities collectively exceeded the standard with 1.6 percent in 2011, while natural gas utilities collectively achieved the 0.75 percent and 1 percent minimum savings standards.

The Minnesota Energy Conservation Improvement Program is a utility-administered program with regulatory oversight by Commerce. Commerce is responsible for reviewing and approving utility CIP plan and annual status reports.

A copy of the Minnesota Conservation Improvement Program Energy and Carbon Dioxide Savings Report for 2010-2011 can be found on the Division of Energy Resources website. More information on utility conservation improvement programs and their requirements is available.