In Pursuit of Equitable Clean Energy: The Power of Coalitions for Utility Regulatory Transformation

Integrated Resource Plans (IRP) are critical planning documents for the future of the U.S. energy system, setting the roadmap for energy generation over a 10-20 year period. Many states require utilities to file IRPs with their Public Utilities Commissions (PUC) to lay out how the utility will use both supply and demand-side resources to meet forecasted energy demand in the most cost-effective way. Despite their importance in determining the energy mix for customers, IRPs are typically somewhat obscure strategy planning documents, only garnering the attention of industry players. However, by engaging more voices in the process, IRPs become a means of influencing utilities to create a cleaner, more efficient, and more equitable power system.

An integrated resource plan (IRP) is a public plan that sets the long-term vision for resource development in a utility’s territory. Utilities use IRPs to evaluate and communicate potential strategies for delivering reliable supply at the lowest system-wide cost over 10 to 20 years. IRPs are required by law in Minnesota, and are approved by the Public Utilities Commission (PUC).

We had an opportunity to demonstrate this through a recent initiative in Minnesota that focused on increasing local government and community stakeholder participation in Xcel Energy’s Upper Midwest IRP. The City of Minneapolis has ambitious goals to mitigate the impacts of climate change for the community and address racism, which was recently declared a public health emergency after the killing of George Floyd brought international attention to the city and its history of racial inequities. The lens of climate and racial equity impacts is, therefore, applied to all city initiatives—including their work with IMT to drive engagement in utility regulation, funded through the Bloomberg American Cities Climate Challenge. When Minneapolis’s electric utility, Xcel Energy, recently filed their 2020-2034 IRP for the Upper Midwest region, the city requested technical assistance from IMT and other Climate Challenge partners to develop comments that centered racial equity and prioritized achieving the city’s climate commitments.

Utility Resource Planning is an Equity Issue

Utility IRPs are critical public platforms to address environmental and climate consequences, bill affordability, and opportunities for communities to benefit from the clean energy economy. Electricity generation has historically been a major source of air pollution and emissions nationwide, and especially so in Minnesota. Low-income communities and communities of color have been disproportionately exposed to those pollutants that directly harm human health, but those communities aren’t necessarily represented in the planning process for those facilities. Energy burden—or the percent of income spent on energy—tends to fall disproportionately on marginalized communities, particularly in areas that have been subjected to other system racial and environmental injustices. Within the energy industry itself, BIPOC (Black, Indigenous, and people of color) individuals are generally underrepresented as both workers and decision makers, which perpetuates the cycle of exclusion, underinvestment, and inequitable clean energy policies and program outcomes. In the Twin Cities metro area—where the majority of Xcel Energy’s customers live—people of color make up approximately 28% of the total population, but just 7.2% of Xcel Energy’s workforce in Minnesota. This story of inequality in the power system is common across the U.S.

The resource planning process provides an opportunity to correct some of these disparities. By providing equitable access to clean energy programs and expanding energy efficiency programs to serve low-income households and renters, decarbonization strategies within a utility resource plan can be an avenue to address historic inequities in communities and mitigate energy burden.

Utility IRPs Need Broader Participation, Especially by Communities that are Most Directly Impacted

Traditionally, utility resource plan proceedings are dominated by industry insiders who are familiar with the modeling tools and economic analysis used in the process. The plan that is ultimately approved by the PUC is based on input by those that participate. This has been true in Xcel Energy’s IRPs in the past; community input has been limited to those local governments that are host to a utility generating plant or organizations with the resources to participate. This is a problem because utility resource planning determines where customers’ electricity will come from over the next decade, and therefore how much pollution and energy costs might be shouldered by communities already overburdened by both.

IMT’s work on the Xcel IRP was part of the broader Bloomberg American Cities Climate Challenge effort to help develop comments on behalf of the City of Minneapolis in the Xcel Energy’s IRP. These comments center equity by both including and amplifying the perspectives of local environmental justice and community-based organizations, as well as recommending ways that the utility might consider the equity impacts of their past and future resource decisions. In the past, comments from Minneapolis or other cities have been fairly minimal, but these comments provided detailed technical analysis for how the utility could retire their fossil fuel plants sooner, use a clean energy portfolio to meet future demand, model more demand-side resources and energy efficiency potential, include local generation and distributed energy resources, and align their distribution system and resource planning processes.

Regulatory Engagement Coalitions are a Powerful Way to Participate in the Process

Capacity is a primary barrier to participation in the utility regulatory process, for both local governments and community groups. One approach to overcoming this is for local governments or community-based organizations with similar or overlapping climate, energy, resilience, and equity goals in the same state and utility jurisdiction to come together to collaborate on PUC engagement.

To encourage community input beyond the City of Minneapolis comments, IMT also collaborated with the locally-based Great Plains Institute and Citizens Utility Board of Minnesota to host a series of workshops for local governments—many of which had never engaged in a regulatory proceeding—on the IRP process and ways they might get involved. Out of these conversations, the group identified a set of shared goals and priorities that IMT used to develop a joint letter to submit on behalf of this coalition of local governments in the IRP. Ultimately, 38 cities and counties in Xcel Energy’s territory agreed to sign onto the letter—the largest local government coalition to be represented in an IRP in Minnesota to date. The letter emphasized the importance of considering local government carbon reduction and energy goals in the utility planning process, particularly those that propose local or in-boundary renewable generation or specific decarbonization strategies like building efficiency and electrification.

To further advance regulatory engagement on behalf of the public, a group of environmental justice (EJ) and community-based organizations (CBOs) in Minnesota convened for several workshops on the IRP. In order to encourage participation and build capacity, Bloomberg American Cities Climate Challenge partners offered funding and mentorship for those organizations that wanted to pursue additional regulatory engagement work. Groups like Unidos, MN—a social justice nonprofit that advocates for immigrant communities—hosted workshops on the impacts of the IRP on their stakeholders and are organizing community members to submit comments. IMT offered technical assistance to several of the organizations in the form of background on the IRP and support for developing public comments. This approach brought much needed community perspective to what is normally a very technocratic decision-making process.

Attention to Equity and Environmental Justice Issues in Utility Regulation Is Growing

There is increasing attention within the energy industry to how utility regulators could consider climate and equity impacts in their decision-making. The Regulatory Assistance Project (RAP) has recommended that Public Utilities Commissions “take a fresh look at the public good,” offering guidance to utility regulators to look at their existing authority with renewed vigor and a willingness to consider relevant demographic data. The COVID-19 pandemic has laid bare health and economic disparities among communities, underscoring that the “public” is not a monolith, but comprised of many diverse communities, each of which needs representation in long-term planning.

Several states are more explicitly requiring utilities to consider equity, environmental justice, and energy burden in the resource planning, as well as other proceedings:

• The Governor of Michigan introduced an Executive Order, requiring the PUC to expand its environmental review of IRPs to include considerations of environmental justice
• In Oregon, a recent Executive Order directed all state agencies to consider climate change and the PUC to specifically prioritize decarbonization, mitigating energy burden, and addressing other inequities of affordability and environmental justice.
• The Clean Energy Transformation Act in Washington state requires IRPs to include an assessment, informed by the cumulative impact of: energy and non-energy benefits and reductions of burdens to vulnerable populations and highly impacted communities; long-term and short-term public health and environmental benefits, costs, and risks; and energy security and risk.
• A 2018 decision by the California Public Utilities Commission required that IRPs now include an analysis of the disadvantaged communities served, air quality impacts of potential portfolios, and resources planned for procurement in disadvantaged communities. The IRPs must also include a summary of outreach and evaluation criteria that will be used in procurement of generation and storage located in disadvantaged communities.
• In Connecticut Governor Ned Lamont signed an Executive Order in September 2019 requiring the Council on Climate Changes to analyze climate mitigation and adaptation through a lens of energy equity – to expand access and remove barriers for underserved and overburdened communities to participate in energy programs. This was reflected in the latest IRP filed by the state in December 2020

PUCs and utilities are typically slow moving and risk-averse institutions, but these examples highlight that change is possible within this sector. For our society to achieve an equitable clean energy transition, it’s essential that we have representation of marginalized communities in utility strategy, given the many ways these decisions affect our day-to-day lives. We have a huge opportunity to influence utility plans like this one over the next few years in order to bridge to a different, more equitable energy future. Let’s not waste that chance.

Do you work for a local government that wants to build a regulatory strategy or take its engagement at PUCs to the next level in pursuit of local and state goals? IMT is here to help. Contact me at julia.eagles@imt.org for more information.