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Report: State’s Conservation Improvement Program saves Minnesota $2.6 billion

June 28, 2012

For Immediate Release

ST. PAUL, MN – Minnesota’s Conservation Improvement Program (CIP) is working. According to a report issued today by the Minnesota Department of Commerce, Minnesota’s electric and gas utilities achieved substantial energy savings through CIP programs in 2009 and 2010. Those measures will save Minnesotans an estimated $2.6 billion over the average 15-year life of the measures and prevent a projected 25 million tons of carbon dioxide emissions in Minnesota.

“These are substantial savings made possible by Minnesota’s forward-thinking, collaborative approach to energy conservation and the partnership of our utilities,” said Commerce Commissioner Mike Rothman. “Utility conservation programs help Minnesotans save energy, save money, reduce pollution, avoid the need for costly new energy infrastructure, and create jobs for companies that offer energy-efficient solutions.”

State law requires each Minnesota utility, with the exception of the smallest municipal natural gas utilities, to operate a conservation improvement program. CIP programs offer incentives for a wide variety of energy-related improvements in homes, farms, commercial buildings and manufacturing facilities. Some examples of typical incentive programs include high-efficiency lighting retrofits, incentives for premium-efficiency industrial motors, and incentives for the purchase of ENERGY STAR-labeled furnaces and air conditioners.

The Conservation Improvement Program Energy and Carbon Dioxide Savings Report for 2009-2010 released today by the Commerce Department’s Division of Energy Resources, demonstrates just how large an impact those efforts 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. That means that for every $1 put into in CIP programs statewide, Minnesotans will see a $5.46 return on investment. Savings to ratepayers resulted from CIPs that provided rebates and other incentives for residential and business customers to become more energy efficient. 

“Efforts to reduce energy consumption do more than benefit our environment and improve public health in our communities; these programs provide direct savings to Minnesota families and businesses” said Commissioner Rothman.

In addition to the financial benefits received from these energy savings, carbon dioxide emissions were reduced by almost 820,000 tons. The report also shows that in 2009-2010, Minnesota’s electric utilities implemented CIPs that resulted in annual savings of more than 1.6 million megawatt-hours of electricity, or enough electricity to power about 140,000 Minnesota homes for a year. 

The conservation efforts of natural gas utilities resulted in annual savings of over 4.5 million dekatherms, or enough natural gas savings to heat 83,000 homes for one year. These annual savings translate to an estimated 1.7 million tons of avoided carbon dioxide emissions, equivalent to the emissions of about 300,000 cars from the road for one year.

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. In 2010, utilities invested more in CIP efforts and it showed. For instance: electricity savings from CIPs increased by 34 percent from 2009 to 2010. Natural gas savings increased 41 percent from 2009 to 2010.  In addition, while individual utility performance varied, Minnesota’s electric utilities as a whole achieved the 1.5 percent energy savings goal in 2010.

A copy of the Minnesota Conservation Improvement Program Energy and Carbon Dioxide Savings Report for 2009-2010 can be found on the Minnesota Department of Commerce website. For more on utility conservation improvement programs and their requirements, click here.