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Jul 2, 2014

Minnesota’s e21 Initiative Eyes a Sustainable, Carbon-Neutral Energy System for the Land of 10,000 Lakes

 

Minnesota has a cultural tradition of being pragmatic, civic-minded, and passionate about bringing people together as the way to solve problems and create a better future. This predisposition toward civic dialogue and debate is just as true in the energy field and has made Minnesota an energy innovation leader.

Over the past decade, Minnesota has established some of the strongest energy efficiency and renewable energy standards in the country, putting the state on target to source 30 percent of its electricity from clean, renewable sources by 2030 (with studies under way exploring the implications of going higher). Notably, these early policies received bi-partisan support in the state legislature and from both former governor Tim Pawlenty (R) and current governor Mark Dayton (D).

As we look ahead, major changes are already transforming the energy economy and technology landscape and will impact utilities and their customers in profound ways, both in Minnesota and elsewhere. We are likely to see a two-way relationship evolve between electricity providers and consumers in which more consumers choose to produce at least some of their own power via distributed energy resources (e.g., solar), demand more choice over how their electricity is produced even if someone else is producing it, and ask for more control over when and how they use energy (“there’s an app for that”). In the other direction, consumers will likely play a larger role in providing electricity and other services back to the grid. Regardless of the specific changes that occur, Minnesota will need a system that provides affordable, reliable, and environmentally sustainable energy.

To prepare for this future, the e21 Initiative is convening a broad set of stakeholders over the course of a year to reexamine what kind of regulatory framework and utility business models can best meet these challenges and capture the new opportunities they might bring. The e21 Initiative aims to develop a new or adapted regulatory framework that will better align utility and customer interests, regulatory incentives, and rates with Minnesota’s statutory goals for a renewable, low-carbon energy system.

The eLab Accelerator Experience

Earlier this year, the e21 Initiative was one of 13 teams chosen from around the country by Rocky Mountain Institute (RMI) to participate in its eLab Accelerator—an innovation boot camp for those exploring how a 21st century electricity system might work.

The Accelerator experience provided a valuable way for our team to learn from others and step outside of our everyday work to think strategically about the e21 process going forward. We were paired periodically with the team from Hawaii, and together we represented the “bookends” of experience at the event: with Hawaii already wrestling with very high penetrations of rooftop solar and needing to figure out a new regulatory model ASAP, and Minnesota having a relatively stable and reliable system today and the luxury of launching our e21 effort in advance of any particular crisis. Still, we left Colorado keenly aware that Hawaii is a kind of “postcard from the future” with respect to how the electricity sector may evolve, and reassured that e21 could not be more timely. As President Kennedy famously said, “the time to fix the roof is when the sun is shining.”

In addition to learning about what other parts of the country are doing, our main takeaway from the Accelerator experience is the value of an approach to complex problem-solving known as transformative scenario planning, popularized by Adam Kahane in a book by the same name and used in South Africa after apartheid (and elsewhere) as a way to actively shape and transform the future, not just adapt to it.

The e21 Initiative was already using elements of this approach, but returned to Minnesota believing that transformative scenario planning could provide a useful and coherent framework for navigating complex change. It has now been embraced by our e21 participants, and we are close to finalizing three scenarios that describe possible futures. These scenarios about what could happen (distinct from what any one participant might want to have happen) are helping e21 stakeholders identify the threats, opportunities, and choices Minnesota faces, given the dramatic changes in energy and information technology, consumer preferences, policy, and regulation taking place in the electricity system.

Ultimately, we expect the scenario development process to yield insights that help e21 participants develop compelling and well-grounded recommendations for statutory and regulatory changes that align utility and consumer interests in pursuit of a sustainable energy system.

We hope to continue learning from the other teams we met at eLab Accelerator and from other processes that emerge around the country. As one of the Accelerator facilitators, Adam Kahane, said at the end of our time together in Colorado, (quoting an African proverb), “If you want to go fast, go alone; if you want to go far, go together.”

Rolf Nordstrom is the president and CEO of the Great Plains Institute.

Image courtesy of Shutterstock.

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