Resource: Next Generation Energy Act of 2007
NextStep website and MnSCN are winding down
The NextStep website and the Minnesota Sustainable Communities Network (MnSCN) are winding down and will no longer function after June 30, 2015. Until then, the website will be accessible, but existing web site content will not be updated nor will new resources or other new content be added to the site. Learn more.

Title: Next Generation Energy Act of 2007
Resource type: Ordinances/rules
Topics: Energy, Statewide/Global
Keywords: energy, energy legislation
Audience: All
Region: Minnesota Statewide
Summary: This energy legislation passed in Minnesota in 2007, and includes statewide goals for reducing energy use and greenhouse gas emissions, and increasing energy conservation and use of renewables.
Content: This law passed by the Minnesota Legislature in 2007 aims to bolster investments in renewable power, increase energy conservation and decrease Minnesota's contribution to global warming.

Among its provisions, it established two overall energy policy goals for the state of Minnesota that:

(1) the per capita use of fossil fuel as an energy input be reduced by 15 percent by the year 2015, through increased reliance on energy efficiency and renewable energy alternatives; and

(2) 25 percent of the total energy used in the state be derived from renewable energy resources by the year 2025.

It set an energy conservation goal that It is the energy policy of the state of Minnesota to achieve annual energy savings equal to 1.5 percent of annual retail energy sales of electricity and natural gas.

It also sets a global warming mitigation target of cutting the state's greenhouse gas emissions to 15 percent below 2005 base levels by 2015, 30 percent by 2025 and 80 percent by 2050.

The law requires several state agencies and a wide array of stakeholders to work together to come up with a "climate change action plan" that will identify and evaluate a broad range of greenhouse gas reduction strategies, assess the potential costs and benefits of the various options, including the potential cost to consumers, and recommend a course of action to the Legislature by Feb. 1, 2008.

The plan must also make recommendations on a proposed cap-and-trade system, whereby a cap would be placed on overall greenhouse gas emissions and power companies assigned "allowances" of emissions that they could trade with one another.

In addition, the law prohibits the construction of any power plants that would produce a net increase in carbon emissions after Aug. 1, 2009. The law states that unless "a comprehensive state law or rule ... that directly limits and substantially reduces greenhouse gas emissions" is enacted and is in effect by that date:

- no large fossil fuel-fired powerplant can be built in Minnesota;

- no utility can import electricity from a large fossil fuel-fired powerplant built in another state that was not operating on Jan. 1, 2007; and

- no Minnesota utility can purchase electricity from an outstate utility under a contract that exceeds 50 megawatts for a term of five years.

Exceptions for this prohibition include facilities that offset any CO2 emissions they emit; a new Iron Range steel or iron nugget production facility; and the Mesaba and Big Stone II plants.

Energy conservation

The conservation portion of the law aim to save Minnesotans money while reducing the environmental impacts of energy consumption. The law contains a five-part conservation and efficiency strategy:

- establishing a statewide energy conservation goal of 1.5 percent of annual retail electric and gas sales (mentioned above);

- expanding and improving the state's conservation improvement program;

- providing research and development and technical assistance to utility companies through the Department of Commerce;

- increasing energy efficiency in state buildings; and

- removing financial disincentives for utility companies to promote energy conservation by "decoupling" a utility's revenue from its changes in energy sales.

Community-based energy development

The law also overhauls the state's Community-Based Energy Development statutes by making a number of changes, including:

- expanding the types of projects that qualify for the program from wind only to include all renewable energy technologies, effective July 1, 2007;

- increasing the financial benefits for communities that invest in renewable power by stipulating that at least 51 percent of the gross revenues from any power purchase agreement flow to owners and qualifying local entities;

- encouraging utilities to make use of C-BED projects in meeting the state's renewable energy standard; and

- removing a 2.7 cents per kilowatt hour cap on the price utilities pay for energy from C-BED projects.

Other changes made include a statewide study of dispersed generation potential, a study of wind development property agreements and the establishment of a C-BED Advisory Task Force to be appointed by the Legislative Electric Energy Task Force.

Except as noted, these provisions are all effective May 26, 2007.


Effective July 1, 2007, landlords are required to make sure residential for-rent properties are fitted with weather stripping, caulking, storm windows, and storm doors when any such measure "will result in energy procurement cost savings ... that will exceed the cost of implementing that measure."

Also included in the law is a study to be conducted by the Legislative Electric Energy Task Force on the potential economic and environmental costs of constructing a new nuclear power plant in the state. The study must compare those costs with the costs of constructing a coal power plant fitted with state-of-the-art carbon capture and sequestration technology. A report is due to the Legislature by March 1, 2008. This provision of the law is effective July 1, 2007.

For more information, see the full text of the law at

Suggested by: Paul Moss
Added: 01/7/08
Updated: 06/2/11