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Is Minnesota Setting a Trend for Utility Reformation?

Minnesota has been adopting techniques to incorporate solar energy into a larger renewable energy strategy.

With the renewable energy movement in the power sector picking up, utilities have been working on adapting to the unique and challenging needs of accommodating the growing clean energy market.

As renewable energy use increases, there are rising concerns whether the aging grid infrastructure across the nation will be able to handle emerging power generation sources like wind and solar.

Not only do utilities have to figure out how to support more clean energy, they also have to expand their renewable energy portfolios to meet green energy targets and reduce their greenhouse gas emissions to meet environmental regulations.

According to the American Wind Energy Association, 29 states have renewable electricity standards, and seven states have committed to achieving renewable energy targets.

Is Minnesota Leading the Way for Utility-grade Solar?

Fast becoming a leader, Minnesota is in the throes of overhauling its renewable energy policy, which could impact how utilities approach clean energy and infrastructure growth, Green Tech Media reported.

With investments in the wind industry already in place, Minnesota also became a trailblazer by becoming the first state to create a formula to determine the value of residential solar power.

The Minnesota Public Utilities Commission approved the value of solar tariff that will account for the costs and benefits to utilities, residential solar owners and other ratepayers.

Like other leaders in energy efficiency, Minnesota is following California, Massachusetts and other states to introduce a more efficient electricity system. However, there are still issues that states like these need to overcome in order to achieve these goals.

Meeting Residential Solar Power Challenges

In the past, there have been disagreements about the retail rates utilities have to pay. Owners of residential solar panels have also voiced concern that the worth solar panels provide for operators is undervalued.

In fact, FERC tried to control how electricity customers should be compensated for reducing their consumption in response to energy market conditions with Order 745, but it was recently struck down.

Minnesota officials, utilities and other groups are working together to develop a framework for upgrading the model for utilities to follow. Called “utility 2.0,” the framework aims to resolve challenges in the power sector and boost renewable energy use.

Major power producer Xcel Energy is joining institutions and energy leaders including the Center for Energy and Environment (CEE) to create a plan for utilities under the name e21 Initiative.

The group hopes to make new utility business models centered on increasing energy efficiency, renewable energy and distributed generation.

To achieve this, e21 Initiative said the regulatory model in Minnesota should stabilize rate impacts and improve transparency and rate competitiveness.

With Minnesota leading the way for utility model reform, other states may soon follow.