Minnesota bill aims to encourage alternative fuels, including RNG

By Erin Voegele | February 21, 2020

Legislation recently introduced in Minnesota aims to establish a state regulatory policy allowing natural gas utilities to add alternative fuels, such as renewable natural gas and hydrogen gas, to their distributions systems. Utilities could also deploy new energy-efficiency and carbon capture technologies to reduce or avoid greenhouse gas (GHG) emissions from natural gas use.

The bill, titled the Natural Gas Innovation Act, or SF 3013, was introduced in the Minnesota Senate on Feb. 11 and referred to the Committee on Energy and Utilities Finance and Policy. That committee voted in favor of an amended version of the bill on Feb. 20 and re-referred it to the Senate Finance Committee. A companion bill, HF 3254, was introduced in the Minnesota House on Feb. 13 and referred to the Committee on Energy and Climate, Finance and Policy Division.

A summary of the bill posted to the Minnesota Legislature website notes that the bill allows natural gas utilities to assist the state in meeting renewable energy and GHG reduction goals by using alternative resources to meet customer energy demands. A utility’s total incremental cost to achieve GHG reductions, however, could not exceed 5 percent of the natural gas utility’s total annual revenue requirement.

Under the bill, natural gas utilities would also be able to file an alternative resource plan with the Public Utilities Commission. Those plans would include recommended alternative resources the utility plans to implement to advance the state’s renewable energy and GHG reduction goals. The PUC would be required to approve, modify or deny the plan within 12 months of filing.

The legislation would also require that by Feb. 15, 2021, the Minnesota Department of Commerce develop an inventory of renewable gaseous fuel resources available to Minnesota. The inventory would include a range of data, including a list of existing biogas and renewable natural gas (RNG) production sites located within the state, a list of potential RNG sources in Minnesota and the estimated potential production qualities at each source, an assessment of the market viability of Minnesota RNG production, and a discussion of whether development of a system of tradable thermal credits would be beneficial for the development of renewable thermal resources in the state.

CenterPoint Energy, Minnesota’s largest natural gas utility, released a statement on Feb. 6 in support of the bill. The company said the legislation would not only help Minnesota reach its renewable energy and GHG reduction goals, it would also help diversify the state’s energy sources while encouraging technological innovation, improving waste management and supporting rural economic development.

“As our cold winters always remind us, natural gas plays an essential role in meeting Minnesota’s energy needs,” said Brad Tutunjian, CenterPoint Energy vice president-Minnesota region. “At CenterPoint Energy, we are committed to delivering reliable, affordable energy while also pursuing innovative solutions to help our customers limit the climate impact of their energy use. We see many great opportunities for clean energy innovation with natural gas, and this legislation will help Minnesota continue its clean energy leadership.”