Municipal Utility Offers Springboard for Minnesota City’s Energy Vision – Episode 42 of Local Energy Rules Podcast
Sprouting from southeastern Minnesota farm country, the city of Rochester is an unassuming mini-metropolis best known for its world-famous Mayo Clinic. But the city is also home to the state’s largest municipal utility and an ambitious plan to ramp up renewable generation, a one-two punch aimed at galvanizing the local economy.
A 2015 mayoral proclamation that Rochester target an all-renewable energy mix by 2031 added the city to a wave of others across the country deepening their commitment to clean energy. The pledge wasn’t binding, but it set an ambitious goal for the community, Rochester City Council-member Michael Wojcik said. Wojcik spoke with John Farrell, who leads the Energy Democracy Initiative at the Institute for Local Self-Reliance, in February 2017.
So far, city leaders haven’t taken substantive action toward the 100 percent renewables goal, though they are thinking about how to get there. Sustainability is already part of development discussions at City Hall. It’s also a key consideration in a citywide buildout, anchored by the Mayo Clinic, designed to reshape Rochester into an innovation and tech hub.
Flexibility with the End of a Contract
The real action on energy will start in 2031, when a long-running contract between Rochester’s utility and a power supplier ends, loosening restrictions on where the city can source its power. Wojcik, who in his ninth year on the City Council also sits on an oversight board for Rochester Public Utilities, predicted “substantially more” renewable generation post-2030.
“Certainly the things that we have great control over, such as the efficiency of our building and the design of our community, we’re making great strides in trying to become a more livable, walkable, sustainable city,” he said. Still, he’s already looking ahead to bigger-picture progress more than a decade out.
For now, Rochester — like most U.S. communities — remains hamstrung by an outdated energy economy that undervalues high-potential distributed resources (like rooftop solar and energy efficiency) in favor of more centralized, dirtier power generation. But city officials like Wojcik see ample room for locally sourced, locally owned energy options and the economic benefits that come with them.
Capturing Economic Benefits of Local Energy
“When I look at my community, energy has traditionally been a large, sucking sound taking wealth away from the community,” Wojcik said. “All our energy sources involve us purchasing fuels that take money from our community and send it elsewhere, and that’s a real long-term concern if you want to be a financially sustainable community.”
Minnesota overall sends more than $18 billion per year to out-of-state fossil fuel providers. A more robust network of locally owned generation, including the renewables Wojcik says are a natural fit for Rochester, ensures more of that money stays close to home. The retail sector offers a key lesson for energy spending: every $100 spent at local businesses feeds $58 into the local economy, while $100 spent at a chain store spurs just $33 in local impact.
In calling for all clean energy, Rochester Mayor Ardell Brede touched on the economic case for the shift. He advocated for more consumer choice that would in turn enable more residents to cash in on those benefits.
“At the heart of a successful 100 percent renewables strategy, it is fundamental to allow open participation in the development and financing of energy infrastructure,” Brede’s proclamation says.
With no coal or natural gas reserves of its own, the Rochester region contributes to Minnesota’s outflow of energy dollars. But the city has notable renewable resource potential, situated within a “wind belt” that stretches across the Upper Midwest and settled in a solar-rich swath of the state. In fact, Wojcik is among a growing number of residents powering their homes and businesses with solar panels.
Especially as storage technology and affordability improves, renewable energy can play a vital role in diversifying Rochester’s energy mix — and in a way that pays off. The city’s utility is already seeding that shift with a $0.50-per-watt rebate (worth up to $5,000) for households and businesses that install solar arrays between 0.5 kilowatts and 10 kilowatts.
“These are the sources that can power our community and keep our resource dollars local,” Wojcik said.
That line of thinking mirrors a bipartisan push, unveiled in February, to boost Minnesota’s statewide renewable energy standard to 50 percent by 2030, up from 25 percent by 2025. Lawmakers hyped the plan with an eye toward localized economic gains, crediting renewable energy with supporting 15,000 jobs and driving $1 billion in economic activity.
Leveraging Local Authority
Rochester officials have yet to take decisive action on an even more forceful all-renewable energy vision, but Wojcik said the city already has a pivotal advantage in catapulting a locally driven clean energy economy: its municipal utility, the largest of its kind in Minnesota.
Unlike an investor-owned utility, these power providers are accountable to the public rather than deep-pocketed shareholders. Because of that, they have more freedom to invest in strategies that directly reflect the needs and interest of their community — not just the bottom line.
“If you’re an investor-owned utility, ultimately you have a fiduciary obligation to the investors. Because we are a publicly owned utility, we have a total commitment to the public,” he said. “That means that what drives an investor-owned utility doesn’t necessarily need to drive our public utility.”
It’s that desire that’s driving other communities like Boulder, CO, to pursue forming a municipal utility (hear our podcast with Stephen Fenberg, formerly a grassroots organizer and now state senator from Boulder). Rochester already has that power at its disposal.
Rochester residents are already pushing for reforms to promote sustainability and clean power within city limits. The municipal utility enables the city to be more nimble and intentional in its approach to addressing those concerns.
“By having a public utility,” he said, “we have the ability to envision what we want that utility to be in the future and what services they’re going to deliver.”
Photo credit: Jonathunder via Wikimedia Commons (Creative Commons Attribution-Share Alike 3.0 Unported license)