CenterPoint’s energy efficiency program is welcome — its proposed rate increase is not

In the midst of a pandemic with no end in sight, anyone in Minneapolis who has a CenterPoint Energy bill and a drafty home may soon have access to desperately needed energy bill relief  — homeowner and renter alike. Minneapolis has co-developed a tool that would lower energy bills by making cost-effective energy efficiency upgrades available without the burden of upfront cost, credit or personal debt. It is called “inclusive financing.”

Unfortunately, CenterPoint is pushing to raise rates for all customers, including a 26% increase in the “fixed fee” that can’t be lowered by using less energy. We believe that utilities and our local governments must do everything possible to ease residents’ energy cost burden. That means rejecting CenterPoint’s rate increase and implementing a strong, universal inclusive financing program without delay.

An existing crisis amplified: Pre-COVID-19, tens of thousands of Minnesotans already lived in homes with little-to-no insulation, resulting in high use of energy whose price — in a phony “market” with one choice — continues to rise by 10-15% every few years. Now, suddenly, nearly all water, electric and heating usage happens at home, including school, remote work and social connection. Some reports have cited up to a 20% increase in utility use, which many households simply can’t afford. This crisis has revealed a pre-existing, underlying economic crisis.

Meanwhile, people are facing massive unemployment, outpacing the 2008 recession. Many newly unemployed people are struggling to pay rent during this crisis, even with government assistance — 32% of Americans missed their housing payments this month. We’re likely to have many thousands of newly poor people, trapped in their homes, with no idea how to navigate deeply underfunded assistance programs — because they’ve never used them before.

Why we need options beyond debt: Universal energy efficiency through inclusive financing will help ease this crisis. This would also be a powerful way to fight climate change while helping thousands save money. A majority of our energy production — most relevantly, space and water heating and electricity — still relies on fossil fuels. Even the nationwide switch from coal to fracked gas continues these problems.

Inclusive financing adds another tool to the toolbox. Existing low-income programs do good work, but at a dangerously slow pace to meet the scale of the problem. They’re often complicated or cost prohibitive to sign up for — and that’s if energy customers even know about them. Half of Minneapolis residents are renters. Right now, if a renter wants energy efficiency beyond just LED lightbulbs, their landlord has to be willing to spend tens of thousands out-of-pocket. If 50-66% of renters in the building make less than $52,400 for a family of four (200% of the federal poverty line), they can get some help.

According to the Center for Energy and Environment, since 2005, only 9% of people who qualify for the Weatherization Assistance Program — where insulation and other efficiency measures are installed at no-cost — actually received it. These are good, important programs — but they cover a small fraction of what’s needed. Before COVID hit Minnesota, 4 million people in Minnesota didn’t qualify for the weatherization program at all because they exceeded these income limits.

The power of inclusive financing is that it’s available to anyone, regardless of their credit score or income, so long as they have an energy bill and stand to benefit from better heating systems, insulation or other improvements. Credit history shouldn’t determine who has access to energy efficiency.

Benefits beyond a lower energy bill: A reinvigorated, statewide energy efficiency program would prevent millions of tons of carbon pollution. That will not happen without universal and accessible programs, ones that provide immediate relief to energy customers, and that get around the normal loopholes of grant or loan based programs.

Thankfully, Minneapolis’ Clean Energy Partnership — with CenterPoint Energy, Xcel Energy and the City of Minneapolis as members — has already committed to an inclusive financing pilot program.

This commitment is important, but it doesn’t guarantee anything. Minnesota’s Public Utilities Commission is considering both CenterPoint’s proposed rate increases and the inclusive financing pilot.  Written comments are invited now through August 21st. Details to submit written comments can be found in this rate case announcement.