Back
More Minnesota cities are turning to utility customers to fund climate and sustainability projects.
The Twin Cities suburb of Eagan is among the latest municipalities to begin collecting what’s known as a “franchise fee” from gas and electric companies in exchange for allowing pipelines, power lines and other infrastructure in public rights-of-way. The charges are typically passed on to customers in the form of a small monthly line item on their utility bills.
As is the case with a growing number of cities, Eagan leaders last year decided to dedicate funds from its franchise fees toward its climate and sustainability efforts. It hired its first sustainability coordinator and is drafting a climate action plan that will be implemented in part with the expected $1.5 million in annual franchise fee revenue.
“It’s hard to launch a sustainability initiative without a way to sustain it,” said Gillian Catano, the city’s sustainability coordinator. “This helps us with long-term planning and allows us to work on projects supporting our operations and to support projects in the community.”
Cities have collected franchise fees from public utilities for decades, but today the charges are emerging as a potentially important revenue source to help budget-strapped local governments make progress toward climate targets. In the Twin Cities, Minneapolis has long used the fees to fund sustainability work, and St. Paul is considering a plan to do the same. Other examples include the suburbs of Edina and Hopkins.
“We’ve seen a growing number of cities, across Minnesota and nationally, leveraging utility franchise fees as a tool to fund climate action and sustainability efforts,” said Julia Eagles, associate director of utility and regulatory strategy for the Institute for Market Transformation, a national nonprofit that promotes public policy to reduce building emissions. “It reflects a broader shift towards cities seeking stable, locally controlled funding sources for urgent climate priorities.”
A National Renewable Energy Laboratory research paper in 2021 found over 3,600 municipalities collect franchise fees from their utilities and 13% use part of that money for clean energy-related projects. The work being funded by franchise fees include energy efficiency programs, municipal fleet electrification, solar panel installations, and other clean energy-related investments.
Abby Finis, a consultant who works with local governments on climate action, said in the past, many cities added the fees into the general fund to pay for various city services. What’s different now, she said, is that more communities are tying them to sustainability staff and projects.
“The franchise fee is something that’s already set up, and you can increase it a little bit without hurting people’s wallets too much,” Finis said.
However, Finis cautioned that the money doesn’t “get anywhere near the amount needed to reach our goals.”
Sometimes cities are maximizing those dollars by using them to leverage additional funds, such as through the federal Inflation Reduction Act or Minnesota’s ECO (Energy Conservation and Optimization) Act, she said.
Minneapolis uses its franchise fees to fund a unique partnership between the city and utilities Xcel Energy and CenterPoint Energy. The National Renewable Energy Laboratory’s research highlighted the partnership, which was intended to accelerate progress toward the city’s climate goals but has faced questions about its effectiveness. The city increased its franchise fee in 2023, a per-household increase of about $12 per year, according to Patrick Hanlon, the city’s deputy coordinator for sustainability.
“It was a pretty minimal increase for residential customers,” Hanlon said. Projects funded partly by franchise fees have saved city residents more than $150 million annually in energy costs and helped weatherize more than 5,000 low-income units, he added.
Hanlon is also mayor of the nearby suburb of Hopkins, which recently started using its franchise fees to pay for solar, e-bike and electric vehicle charging initiatives.
St. Paul Mayor Melvin Carter recently proposed charging residential franchise fees to fund weatherization, tree planting, and pay the salary of a new climate action coordinator.
In the past, St. Paul’s climate action budget has come from general funds and grants.
“This would be the first uniquely dedicated funding for the city’s broad portfolio of climate work,” said Russ Stark, the city’s chief resilience officer.
Edina began using franchise fees for clean energy projects in 2015. Today, according to sustainability manager Marisa Bayer, the suburb commits about $950,000 annually from franchise fees for its sustainability programs, most of which is invested in city operations to improve efficiency, add renewable energy, and electrify municipal buildings and transportation. The money also funds a sustainable building ordinance and other policy measures.
“The great thing is that because we have this dedicated funding source, we can move forward with projects, either identified in our capital improvement plans or supported by our community,” Bayer said. “We don’t have to go to council every year or rely solely on grants to help fund this work.”
Correction: Edina commits $950,000 annually from its franchise fees for sustainability programs. An earlier version of this story mischaracterized the number.
BATTERIES: General Motors pledges $625 million to help fund the contested Thacker Pass lithium mine under development in Nevada in an effort to boost battery material’s domestic supplies. (Las Vegas Review-Journal)
ALSO:
OIL & GAS:
BIOFUELS: The U.S. Energy Department tentatively awards a Montana biodiesel refinery $1.44 billion in loan guarantees to produce sustainable aviation fuels from leftover animal fats and greases. (Canary Media)
UTILITIES: Xcel Energy submits its just transition plan to Colorado regulators proposing to replace closing coal plants and meet increasing demand with a mix of new wind, solar, geothermal and gas generators, battery storage and a nuclear reactor. (CPR)
CLIMATE: Legal experts say a 2019 court ruling would probably shield California’s and Washington’s carbon markets from a potential Trump administration’s likely challenges. (E&E News)
CARBON CAPTURE:
WIND: A Bill Gates-backed startup says it has secured $14 million for a proposed wind facility in Wyoming that would use the firm’s horizontal-axis turbines. (Power)
GRID: The Bonneville Power Administration proposes spending about $3 billion on 13 transmission and substation projects designed to bolster its grid to accommodate increasing renewables and growing power demand. (Idaho Capital Sun)
ELECTRIC VEHICLES: Pacific Gas & Electric launches a bidirectional electric vehicle charging program compensating customers for discharging EV batteries back to the grid during high demand. (PV Magazine)
HYDROGEN: A southern California transit agency opens a liquid hydrogen-based fueling station for its bus fleet. (news release)
COAL: Colorado officials launch an effort to extinguish underground coal seam fires in an abandoned mine near Boulder. (CBS News Colorado)
COMMENTARY: A California energy executive calls on local governments to comply with a state law requiring instant residential solar permitting and to force homeowners associations to eliminate red tape for rooftop installations. (Fresno Bee)
EMISSIONS: The U.S. Supreme Court declines to pause the Biden administration’s power plant emissions rule as it faces legal challenges, though Justice Brett Kavanaugh’s opinion suggests those challenges may ultimately be successful. (Associated Press, E&E News)
ALSO:
NUCLEAR:
CLEAN ENERGY: A growing number of cities across Minnesota and the U.S. are funding climate and clean energy projects with franchise fees collected from utilities using public rights-of-way for infrastructure. (Energy News Network)
COAL: An Alabama coal-fired power plant is named as the U.S. EPA’s top greenhouse gas polluter for the ninth year in a row, but owner Alabama Power has no plans to retire the plant or convert it to natural gas. (Inside Climate News)
LITHIUM: General Motors pledges $625 million to help fund the contested Thacker Pass lithium mine under development in Nevada in an effort to boost battery material’s domestic supplies. (Las Vegas Review-Journal)
SOLAR: Homeowners looking to install rooftop solar panels often run into a dilemma when they learn their roofs will need to be replaced before the lifespan of their array expires. (Grist)
HYDROGEN: A large hydrogen fuel production facility in upstate New York was expected to make the state an industry leader, but work on the project has halted and its future is uncertain. (Heatmap News)
BIOFUELS:
NUCLEAR: A Maryland-based company that makes small modular nuclear reactors announces a $500 million round of funding, led by Amazon as it looks for clean energy sources for its increasingly power-hungry data centers. (Washington Post)
ALSO: The owners of the Three Mile Island nuclear plant order a $100 million transformer, a major step in its plan to restart operations. (Reuters)
FOSSIL FUELS: A group of New York prosecutors argues they could press criminal charges against oil companies for their role in fueling hurricanes and other climate disasters. (The Guardian)
BUILDINGS:
HYDROGEN: A large hydrogen fuel production facility in upstate New York was expected to make the state an industry leader, but work on the project has halted and its future is uncertain. (Heatmap News)
EMISSIONS:
OFFSHORE WIND:
CLEAN ENERGY: Massachusetts awards $1.75 million in grants to help cities and towns fund energy efficiency projects, climate planning, and clean energy campaigns. (WWLP)
GRID: Maine utilities make grid updates they say will make the power system more reliable as the number of serious storms increases. (News Center Maine)
COMMENTARY: New York’s $5 billion state energy efficiency program needs to do a better job reaching low-income residents and communities of color, says an environmental justice advocate. (City Limits)
Electric vehicle charging stations share a dilemma with their fossil fuel counterparts: they both only make small profits off the power or fuel they sell, and sometimes even lose money.
Alan Jenn, a University of California at Davis professor who studies EVs, summed it up to the Washington Post: “You can’t survive on just selling electrons.”
Allow a new study to make a business suggestion. Shops, restaurants and hotels within 300 feet of an EV charging station tend to see higher sales than other businesses without a charger nearby, according to the study published in the scientific journal Nature. So like gas stations that make back some of their lost profits by selling days-old sandwiches, businesses could try adding EV chargers to bring in customers.
That strategy has already worked on me. If I’m headed on a long road trip in my EV, I always plan to stay at a hotel with at least a Level 2 charger in walking distance. I’ve also been guilty of stopping at a shopping plaza and buying something just because I need to charge my car, especially in the winter, when sitting in a cold car isn’t so fun.
And these charger-adjacent businesses don’t have to be a collection of big box stores. Some companies are building charging lounges that look a lot like what you’d find in an airport, complete with Wi-Fi, comfy chairs, and restaurants, Bloomberg reports — so pack a book and have a seat.
⚛️ Feds want a nuclear buildout… A newly updated U.S. Energy Department report makes a case for immediately launching a buildout of large-scale nuclear reactors in hopes of tripling the country’s current 100 GW of nuclear power capacity. (Canary Media)
💸 … but is it possible? Georgia Power’s expansion of a nuclear plant cost more than twice its original budget, took 15 years to build and contributed to its original contractors going bankrupt, suggesting a widespread expansion of nuclear power will be costly and take longer than expected. (Floodlight)
🌀 Resilient rebuild: President Biden announces $612 million for six projects to improve electric grid resilience in hurricane-affected communities. (NPR)
⚡ Tribes’ energy challenge: Tribal nations often feel the impact of fossil fuel plant shutdowns, but many lack the needed funding to build clean energy projects and connect them to the grid, a tribal clean energy group says. (Utility Dive)
📈 Getting off track: A new Sierra Club evaluation finds for the fourth year in a row that major U.S. utilities are off track to meet the Biden administration’s emissions reduction goals, and many are in a worse position than last year due to rising demand. (Canary Media)
🕳️ Carbon capture roadmap: The U.S. Energy Department drafts a strategy for developing “dozens” of carbon capture and storage facilities by 2050 and building infrastructure, oversight, and a workforce to serve them. (E&E News, subscription; news release)
🛢️ Fighting fossil fuels: Black women lead a group of Louisiana nonprofits and grassroots organizations fighting the expansion of oil, gas and petrochemicals. (Floodlight)
🇺🇸 Plus, some politics
RENEWABLE ENERGY: The New York Power Authority seeks proposals to deliver as much as 575 MW of renewable energy to New York City through an existing transmission line. (Utility Dive)
ALSO: Environmental activists claim the New York Power Authority’s draft plan to create 3.5 GW of renewable power fails to do enough to help the state meet its clean energy goals. (City and State New York)
OFFSHORE WIND:
BIOMASS: The Burlington Electric Company in Vermont is negotiating to acquire full ownership of the state’s largest power producer, a wood-burning plant that has been controversial in recent years. (VT Digger)
ELECTRIC VEHICLES: Pennsylvania legislators consider measures that would legalize the use of e-scooters on public streets and create rules of the road for the vehicles. (Pennsylvania Capital-Star)
HEAT PUMPS: A Massachusetts town pilots a new way of financing heat pump installations that could be scaled up to speed adoption statewide. (MassLive, subscription)
COMMUNITY CHOICE: Customers of Providence, Rhode Island’s community choice aggregation program will pay less this winter for a power supply that includes more renewable energy than the default utility product in the state. (Boston Globe)
GRID:
TRANSMISSION: Baltimore City Council considers whether to pass a resolution opposing a proposed 70-mile transmission line that some councilors say would damage farmland and hurt property values. (Baltimore Sun, subscription)
ELECTRIC VEHICLES:
COMMENTARY: Wind energy could lower electricity costs for Connecticut residents by lessening the impact of natural gas price spikes, says an energy analyst. (CT Mirror)
BIOMASS: Vermont environmental advocates say a wood-fired power plant, the state’s largest in-state power source, is both losing money and harming the environment, while the local electric department says the facility benefits ratepayers and the grid. (VTDigger)
CLEAN ENERGY: Pennsylvania, home to the country’s biggest shale gas production region, tries to balance a stable fossil fuel industry with emissions reductions and a clean energy transition. (Canary Media)
SOLAR:
OFFSHORE WIND: Supply chain issues are one of the major barriers to offshore wind’s progress in New Jersey, says a professor studying sustainable energy. (6abc)
NATURAL GAS: Twenty years since fracking began in southwestern Pennsylvania, there is growing evidence that the practice causes widespread adverse health impacts. (Observer-Reporter)
BUILDINGS: Maryland commercial property owners say a state requirement to report building emissions starting in 2025 is excessively burdensome, though environmental groups praise the measure. (RTO Insider, subscription)
TRANSIT: Philadelphia-area public transit is unlikely to get a state funding boost unless the legislature can agree to a new revenue source like increased taxes on gaming. (Spotlight PA)
GEOTHERMAL: The University of Massachusetts plans to power two new buildings on its flagship campus with geothermal energy, but neighbors are concerned about the disruptions the project could cause. (Greenfield Recorder)
ELECTRIFICATION: South Portland, Maine workshops a proposal to ban gas-powered leaf blowers, lawn mowers, and other lawn equipment, but could exempt commercial landscaping operations. (Maine Wire)
COMMENTARY: The possible reopening of the Three Mile Island nuclear plant in Pennsylvania would benefit the area’s union workers, says a representative from a state union coalition. (Lancaster Online)
When farmer Trent Gerlach found out a solar farm would be built on the land he had long worked in northwestern Illinois, he was disappointed.
“As a farmer, seeing that land taken out of production is difficult, when you farmed it for many years, you’ve been stewards to that land, fertilized that land, taken care of it as if it was your own,” he said.
Gerlach’s family had been raising corn, soybeans and livestock since 1968, and like many farmers, they leased farmland in addition to working their own land. And when the owner of one of those leased parcels decided to work with Acciona Energia to help site its High Point wind and solar farm, Gerlach initially was not enthusiastic.
“The thought of taking productive farm ground out of production with solar panels was not, in my personal opinion, ideal,” he said.
But Gerlach was determined to make the best of the situation.
Ultimately, that meant a win-win arrangement, where Acciona pays him to manage vegetation around the 100 MW array of solar panels that went online in early 2024. Gerlach does that with a herd of 500 sheep.
“We don’t own the land, we don’t get a say — that’s landowners’ rights, and I’m very pro that,” Gerlach recounted. “In U.S. agriculture, the biggest thing that gets farmers in trouble is saying, ‘that’s how we’ve always done it so that’s what we’re going to do.’ Renewable energy is probably not going anywhere, whether you’re for or against it, it’s coming, it’s what’s happening. As an agriculture producer, we’re going to adapt with it.”
Researchers around the country are exploring agrivoltaics, or co-locating solar generation with agriculture in a mutually beneficial way. Projects range from growing tomatoes in California to wild blueberries in Maine, with varying levels of success.
Acciona regional manager Kyle Charpie said that sheep grazing appears an especially promising form of agrivoltaics, and one that the company is likely to continue exploring globally. Solar operators need to keep vegetation controlled, and sheep are a more effective and ecological way to do it than mechanized mowing. Acciona has long had a sheep agrivoltaic operation in Portugal, Charpie noted, and two projects in Texas are underway.
“It’s incredibly cost-effective — sheep don’t break down like a tractor; if a tractor blows a belt, you’ve lost a whole day of cutting,” he said. “These grasses grow wickedly fast, it’s that constant presence of the sheep that’s been super super effective. It aligns with our sustainability goals.”
“It’s tough to say we’re the greatest renewable company in the world [if] we have a bunch of tractors running up and down our fields belching out CO2,” he continued.
Another advantage, Charpie said, is that at the end of the solar array’s lifespan, the land beneath it will be restored and refreshed.
“We have all these sheep now who will spend 30-plus years breathing, living, using their hooves to churn up ground, even dying; it’s the circle of life,” he said. “When these farms get turned back to the families, that soil condition will be wonderful.”
Gerlach’s family had about 50 ewes when the idea for grazing around the solar panels struck. He “hounded” Acciona, in Charpie’s words, to bring an agrivoltaic deal to fruition.
“He saw an opportunity here, and he has been his own best advocate, banging down the door, checking how close are we, when will we get our sheep here,” Charpie said.
Gerlach ultimately bought about 500 sheep of two types: Dorper and Katahdin, small breeds that can fit easily under solar panels.
“The panels create lots of shade — during the heat of the day, they’ll all be underneath the panels for shade,” Gerlach said. “In early mornings, late evenings they’re out grazing aggressively. They don’t bother the panels one bit.”
Gerlach said his family “used to raise livestock like everybody did back in the day,” and his farm has won awards for its cattle, but raising livestock has become less profitable in recent years. Agrivoltaics offer an opportunity to delve back into raising sheep, something Gerlach loves. A commercial sheep operation would only be possible with the payments for vegetation management, he said.
“Raising sheep in the United States is challenging because the market for sheep is not very high,” he said. There’s not much of a domestic wool market, and “the meat side of sheep and lamb never really caught on in the U.S. — we’re a beef, pork, poultry-consuming country.”
Gerlach sells the bulk of his lambs around the Easter season, and largely for kosher and halal consumption. Since that market is so limited, the ewes largely earn their keep being paid to graze.
“We love providing stewardship to the animals. That’s what U.S. agriculture was built on hundreds of years ago,” Gerlach said. “It marries really well with our crop production” on nearby land. “In agriculture you need diversification. By bringing sheep and livestock production in, we can afford to hire more full-time employees.”
Sheep are the livestock best suited to agrivoltaics, stakeholders agree.
“You can’t use cattle because they’re too large, they would rub on the panels and break them,” Gerlach said. “You can’t use goats because goats would climb on the panels, and they’re natural chewers, they would chew on the wires.”
The High Point solar array is divided up into separate plots with fences, “like perfect little pens for the sheep,” added Charpie.
In a bigger uninterrupted plot, a farmer would likely need to move water sources for sheep strategically around the area to make sure the animals cover the entire plot. Gerlach’s flock only grazes about a fifth of the Acciona solar array. He’s hoping to expand, though feeding and sheltering sheep during the winter when they can’t graze is costly.
“I’ve got three young kids. Hopefully we raise them in agriculture. It’s such a good practice for our young people to learn responsibility and stewardship,” Gerlach said.
“[The animals] come first, they get fed and watered and taken care of before us. Sometimes agriculture gets portrayed in a poor light, especially larger production agriculture. I try to really push that that’s not everybody. Talk to a local farmer, a local person — you generally see that we’re stewards of the land, we want healthy ground and livestock. That can marry in fine with clean energy.”
BATTERIES: California’s grid operator sets a new single-day peak battery discharge record of 8,300 MW after surpassing 10,000 MW of installed storage capacity. (PV Magazine)
SOLAR:
PUBLIC LANDS: The Biden administration designates the Chumash Heritage National Marine Sanctuary off California’s coast, banning new offshore oil drilling and other development on more than 4,500 square miles of ocean. (Los Angeles Times)
OVERSIGHT: California officials work to fortify state climate and environmental regulations against a potential second Trump administration by preemptively preparing legal challenges and forging agreements with corporations. (New York Times)
OIL & GAS:
UTILITIES: Wyoming lawmakers consider industry-crafted legislation that would limit utilities’ liability for non-economic losses suffered from power equipment-sparked wildfires. (WyoFile)
WIND: California commercial fishermen file a lawsuit accusing state regulators of skirting federal law by issuing sonar testing permits to offshore wind developers along the state’s central coast. (Cal Coast News)
BIOFUELS: Oregon residents and advocates push back against a proposed biofuel transfer facility, saying it poses safety and environmental risks. (OPB)
HYDROGEN: A pet food company adds a hydrogen fuel cell truck to its California delivery fleet to test the technology’s scalability. (Biofuels Digest)
GEOTHERMAL: The federal Bureau of Land Management sells 66 geothermal leases on about 219,000 acres in Nevada and nets $7.8 million. (Las Vegas Sun)
EMISSIONS: California regulators begin crafting rules aimed at limiting dairies’ methane emissions, but advocates worry proposed exemptions could preemptively weaken them. (Canary Media)
NUCLEAR: Academic advocates cast doubt on a proposed advanced nuclear reactor under development in Wyoming, saying it will cost far more than other carbon-free energy sources and has a radioactive waste problem. (Casper Star-Tribune)
COMMENTARY:
GRID: President Biden announces $612 million for six projects to improve electric grid resilience in hurricane-affected communities. (NPR)
ALSO: More than 550 incarcerated men suffered in North Carolina prison cells without lights or running water for five days after Helene, until they finally were transferred to different facilities. (Intercept)
SOLAR: A nonprofit and a solar company partner to deliver 33 solar-plus-battery microgrids and dozens more portable batteries to western North Carolina communities that still lack power from Hurricane Helene’s damage. (Associated Press)
NUCLEAR:
HYDROELECTRIC: A Virginia town council budgets $272,500 for a feasibility study of using a pair of small-flow turbines to run its hydroelectric plant when the James River is low. (Lynchburg News & Advance)
OIL & GAS: Tennessee farmers protest the Tennessee Valley Authority’s plans to build a gas-fired power plant. (WZTV)
COAL:
CLIMATE:
COAL ASH: Tennessee officials learn about the Tennessee Valley Authority’s plan to spend $1 billion into improving how it stores coal ash byproducts. (Gallatin News)
EFFICIENCY: An Alabama electric cooperative offers energy efficiency rebates through a Tennessee Valley Authority program. (Cullman Tribune)
POLITICS:
COMMENTARY: An editor considers the complicated question of whether climate change is leading more people to move to mountainous Appalachia. (Cardinal News)
.svg)
