Last week, the Minneapolis City Council adopted a pair of proposals that are expected to raise $10 million annually through increased utility franchise fees, more than tripling the fund meant to help pay for the city’s climate policy goals.
City officials called the establishment of the fund the first step toward implementing the city’s Climate Equity Plan, adopted by the council this past summer, which lays out a decade-long roadmap to achieving climate goals while focusing on low income communities and communities of color.
The two ordinances, authored by Ward 7 Councilmember Lisa Goodman and Ward 10 Councilmember Aisha Chugthai, increase gas and electric franchise utility fees citywide. Xcel Energy and CenterPoint Energy will collect an extra $12 per household on average annually, and those additional funds – which are anticipated to add up to $10 million per year – will be collected by the city starting in January to implement the provisions in its Climate Equity Plan.
That brings the total of the city’s fund for climate action to about $13 million, following a 2017 increase in utility franchise fees that helped supply $3 million.
“I’m really thrilled that the Climate Legacy Initiative, which will be funded through these franchise fees, targets communities of color, low income communities, to create the kind of cost savings that people have talked about,” Minneapolis City Council President Andrea Jenkins said before the vote. “But more importantly, (it) helps global climate change efforts to continuously move forward.”
Kim Havey, the city’s director of sustainability, said the increase in funding will help them significantly accelerate their ability to implement and scale up various efforts to reduce costs, increase efficiency and expand the use of carbon-free energy. Some of those current efforts include well over a thousand no-cost energy audits for homes and businesses already conducted by city officials, and the Green Cost Share program, which helps pay for property upgrades that help reduce pollution, improve energy efficiency or introduce clean energy like rooftop solar panels.
With the new funding, Havey said the city also aims to significantly ramp up staffing and resources to do more ambitious work, like systematically eliminating pollution such as radon, lead and asbestos from the homes of Minneapolis residents. That would then be followed by improving energy efficiency of homes through weatherization and insulation, as well as supporting the transition of older homes to electrification.
“We have about 40,000 homes that need to be insulated and weatherized and potentially upgraded for electrification, and we’re now doing 300 to 500 homes a year,” Havey said. “So we really have to ramp this up if we’re going to reach our goal of getting all 40,000 homes that still need to have insulation, insulated by 2040.”
Focus on equity
The Climate Equity Plan, adopted by the council in July, establishes the goal of 100% renewable electricity citywide by 2030 and net-zero greenhouse gas emissions by 2050. It comes after the previous Climate Action Plan, though it puts more of an emphasis on addressing racial and economic disparities, and promoting environmental justice.
Areas of the city inhabited by low income communities and communities of color are disproportionately affected by the worsening climate. Poor air quality has led to higher asthma rates, and the lack of tree canopy cover directly correlates to higher temperatures, which can cause further health issues.
The Green Zones, identified by the city in 2017 as having high pollution and marginalized communities, were established to help improve the environmental, social and economic well-being of its residents. The new equity plan highlights the Green Zones as an example of its goal: prioritizing programs and resources for the people who require them the most.
“Many of my neighbors and I don’t have the money to pay for insulation, electrical appliances and the growing cost of utility bills,” Audua Pugh, a Northside Green Zone resident, said ahead of a hearing on the ordinances earlier this month. “The only way our community can get these benefits is for the city to step up and fill in the gaps with some funding.”
In the development of the Climate Equity Plan, Havey said engagement and coordination with community groups was substantial. Namely, with the Just Transition Fund Coalition – a partnership of several groups of activist organizations that developed the People’s Climate and Equity Plan, which has about 90% overlap with the final plan adopted by the city.
City staff also did intentional outreach to specific cultural communities, which he said proved successful in garnering meaningful feedback. Havey said they plan to do more of the same to inform residents about programs like financial assistance to reduce energy costs, while also getting their ideas about possible future efforts.
“We’re going to be really intentional working with community leaders and community liaisons in each one of those groups, and providing education as well as waiting for people to be engaged and supporting ways that we can give feedback on what they think are effective ways to address climate issues,” he said.