Centerpoint Official says addressing problem landlords is outside of the scope of the Clean Energy Partnership

At Tuesday’s Energy Vision Advisory Committee (EVAC) meeting, I witnessed a pattern of how 2 officials from Centerpoint handled the issue of renter’s rights which needs to be addressed and called out quickly.

THE UTILITIES INTEND TO MINIMIZE OUTREACH TO RESIDENTS OF MULTI-FAMILY BUILDINGS

Renter’s rights became relevant to the conversation when a presenter from Centerpoint was introducing their new multifamily energy efficiency program they launched jointly with Xcel. He first reiterated that the program is not open for tenants to apply to because they consider the building owner/ landlord to be the decision maker. That is something we already knew about the program. But what he said next was to flat out declare that “We are going to be minimizing outreach to residents” unless the building owner already participates in the program.

THE MAIN DILLEMMA WITHIN AN INNOVATIVE NEW PROGRAM

Of course it is only fair and basically necessary to involve the landlord/ building owner when doing deep retrofits like adding insulation or replacing the boiler in a building they own. The issue is that there are a lot of landlords that will not willingly engage in the multi- family energy efficiency program. For particularly problematic landlords, energy audits could play a dual role as an inspection that uncovers a whole host of additional violations in their apartment buildings. For landlords who honestly do want to invest in energy efficiency but need a bit of extra support, the new streamlined multifamily program sounds like a helpful offering. The catch is that landlords have to ask for the program in order for tenants to reap any benefits from it and there is no guarantee they will actually use this program.

CENTERPOINT OFFICIAL SAY ADDRESSING PROBLEM LANDLORDS IS OUTSIDE THE SCOPE OF THE CLEAN ENERGY PARTNERSHIP

Matt Kazinka from the EVAC brought up that very same point and requested the utility program offer a hotline which tenants of unresponsive landlords could call. Another official from CenterPoint then responded that "bad landlords are an important issue, but are outside the scope of the Clean Energy Partnership." He probably meant to say problem landlords are outside of Centerpoint's role in the Clean Energy Partnership as opposed to the partnership overall. He added that it is the role of the state to regulate activity regarding problem landlords. Matt then responded by saying that the Clean Energy Partnership also involves the city, which has regulatory authority. The point Matt brings up only reinforces the entire founding thesis of the partnership, that the City and the Utilities can accomplish much more when they work in collaboration than if they work separately. 

I recall the Centerpoint official saying that he had not talked with Xcel about the problem landlords issue in reference to the multifamily program. While his words are not proof of a deliberate decision to diminish the role of renter’s rights in the partnership, his words about not talking to Xcel about the issue indicates renters issues are not being regularly addressed in the Partnership’s Planning team. His reaction to perhaps being caught off guard by the challenging issue was one of passing the buck onto government bodies instead of expressing it as a purpose from which to partner with that government body.  

EVALUATING THE SCOPE OF THE PARTNERSHIP

Let’s take a look at the big picture on what the Clean Energy Partnership is intended to achieve so we can push back against any proposed reductions in the Partnership’s scope.

 The definition statement on the Clean Energy Partnership’s own webpage http://mplscleanenergypartnership.org/about/) explicitly says: "The Minneapolis Clean Energy Partnership (CEP) is a new approach that partners the City of Minneapolis in a unique way with Xcel Energy and CenterPoint Energy, its electric and gas utilities, to help the City reach its Climate Action Plan and Energy Vision for 2040 goals."

If we look at the Energy Vision for 2040 (see https://cleanenergypartnership.files.wordpress.com/2014/12/mpls-energy-vision-9-3-13.pdf) it explicitly says:

"In 2040, Minneapolis’s energy system will provide reliable, affordable, local and clean energy services for Minneapolis homes, businesses, and institutions: sustaining the city’s economy and environment and contributing to a more socially just community."

Upon evaluating these statements about contributing to a more socially just community, we have grounds to ask a big question. How could it possibly be outside of the scope of the Clean Energy Partnership to help tenants hold problem landlords accountable for participating in opportunities to save energy?

Partnership board members from the city ought to remember the city budget public hearing last December 10^th. The dozens of community members who spoke in favor of restoring full funding for the Minneapolis Clean Energy Partnership all stayed on message by speaking on behalf of racial equity & economic justice at the same time. It is easy to make the case that taking action on renter energy issues is where the rubber hits the road as far as applying that promise of equity.

But having made that point, what pro-active solutions can we propose?

EQUITABLE ACCESS TO ENERGY DATA

Perhaps the biggest piece of leverage the Clean Energy Partnership could help give to tenants is equitable access to energy data.   Just because doing actual significant energy improvements to a multifamily building has to go through building owners, does not mean that merely getting an energy audit should have to go through the building owners. That might be the most easily fixable shortcoming of the multi-family energy efficiency program currently offered. When the landlord/ building owners are the only ones who have access to the energy audit reports, it means the tenants are left without the energy data they need to hold their landlords accountable in court if the building performance is indeed below standards.  

INCLUDE ENERGY EFFICIENCY IN INSPECTION STANDARDS

Another clue on a pro-active solution involves the suggestion Matt had already made for a phone line for tenants to call. Tenants should be aware that they could call 311 for City Housing inspectors. The problem is that when the city inspectors come, they typically just send a report to the same landlord who is not addressing the problem and the issue gets buried instead of fixed. Then tenants call a different person for the same reason and the cycle of inequitable access to energy data continues. In addition, so many city inspectors are good at checking for certain code violations, but have sadly little focus or training on energy efficiency beyond that. That is why we have so many problem landlords that apparently get away with big atrocities resulting in disturbing energy waste, while so many conscientious landlords are micromanaged about comparatively frivolous tree-trimming and yard issues.

So here are 2 key questions.

* Can we ask the City for housing inspectors to actually be conscientious of energy conservation standards like they are with so many other much more minor and less consequential details?

* Can we ask the utilities or CEE to make energy audit reports accessible to tenants so that they could landlords accountable if they are being negligent? 

RESOLVING THE SPLIT INCENTIVE

A key reason why we need elaborate new energy efficiency programs and a clean energy partnership in the first place is because of a particular split incentive problem. The split incentive is when tenants are responsible to pay energy utility bills while only the owners are authorized to do significant energy efficiency upgrades. Because of this split incentive, it can be difficult to get the message across to landlords why the new multifamily energy efficiency program would be a good use of their money. Having said that CEE has done a lot of research on how to best message the energy efficiency participation among landlords and can be great guidance on that point.

Resolving the split incentive problem was in fact one of the highest hopes I have had while advocating for the formation of the Minneapolis Clean Energy Partnership in 2014.

When the city and the utilities can finally when they work together and combine their strongest assets on regulatory authority, energy data and incentives, then we have an institutional path to resolve the split incentive issue.

OUTREACH AND ORGANINZING AMONG TENANTS

It is also worthwhile to take a look at the Centerpoint official’s statement that “We are going to be minimizing outreach to residents” as it relates to community engagement being one of the three necessary components of the partnership (along with data and policy). Nick Mark from Centerpoint flat out admitted that community engagement is stuff the utility folks just don’t know how to do/ not their forte. While it is good to be honest about admitted areas of weakness, that is the reason why we have a partnership in the first place. Just because community outreach to tenants is not the role of utility staffers in the multifamily energy efficiency program, it does not exclude Community Power or an outside group of organizers from stepping in to fill that role. Will there be money put toward this role, or will the utilities try to get people to do outreach for them for free? Things have a way of not getting done when it is put on the backs of volunteers. 

Organizing among tenants is perhaps the most obvious method to incentivize landlords to respond to opportunities to save energy. If just one tenant asks for sensible repairs on an individual basis, a problematic landlord can get away with taking a dismissive “you are nothing to me” approach. But when the tenants organize, then a normally non-responsive landlord has to respond. 

Timeline of Xcel's Community Solar Garden Delay Tactics.

In September 2013, Xcel brought forth some program rules that were in blatant violation of legislative intent. It was a proposal to cap community solar to 20 megawatts of capacity through 2015. Their additional tactics included various ways to reduce compensation for community solar subscribers, and therefore limit market demand for the program. Xcel also rejected a helpful tool the state legislature offered to them, the “value of solar” payment mechanism. That required the Commission to use it precious time to craft an alternative payment that would allow community solar projects to be financed.

The Public Utilities Commission eventually resoundingly rejected Xcel’s proposed plan. But the whole ordeal ran the clock on six months of public comment and debate. The PUC then gave Xcel another month to file a revised program, and an additional two months for public comment as a result of having to start over. Xcel then came up with a low-ball offer on community solar rules. That successfully delayed the program opening by at least nine months. In the meantime, Xcel helpfully produced a full animation video called “Solar Done Right” which subtlety suggested that solar is done most economically at “large scale” as opposed to distributed generation or community solar.

The PUC erred on the side of trusting Xcel with their next order they issued.

The interconnection rules the PUC set gave community solar projects extended time to connect to the grid if Xcel delayed, but offered no consequences if and when the Xcel acted too slowly.

In September 2014, the PUC finally approved Xcel’s modified plan. Thus far Xcel had succeeded in drawing out the clock 15 months after the State Legislature approved community solar.

But then just a few weeks later, Xcel brought forth their next delay strategy. It involved filing comments raising concerns about the “co-location” of community solar projects.

The PUC’s comments that April approved of the concept of solar gardens sharing grid connection location, with an additional PUC statement of support following in September. Xcel’s own comments in June were in agreement with the PUC.

At first, Xcel said it would accept these applications as long as “each solar garden must have its own metering, its own program application and separate interconnection agreements.” However, Xcel’s comments ended up being a confusion tactic for developers since it injected uncertainty into the process of how projects would queue up for grid connections.

During this time period, community solar developers kept asking Xcel for clarification on how they would treat big business subscribers as subscribers to multiple solar gardens. In two separate replies in November, Xcel replied unhelpfully, “We believe there is no need for additional clarification.”

Finally, on December 12^th 2014, the program officially opened and Xcel started taking applications. But only week prior, Xcel launched another confusion tactic that led several CSG developers to feel duped. Despite earlier comments to the contrary, Xcel now said that developers who had jumped into the grid connection queue before the program opened could keep their spot in line.

Once the program opened, Xcel’s strategy was to slow the program by fanning the flames of uncertainty. Despite attempts to inject uncertainty, Xcel received over 400 applications for 400 megawatts of community solar projects, 20 times the capacity they had proposed to allow by the end of 2015.

In February of 2015, CSG developers said they still lacked clarity about the multiple location issue which Xcel had refused to clarify in November. So the CSG developers, were left with no method to identify decent grid connections before submitting their application, nor a way to see their place in line. Again, the Commission was forced to step in to provide some guidance while Xcel was offering new ways to curtail the amount of new solar capacity from the flood of CSG project applications. In March, Xcel made another attempt to lower compensation for CSGs. and strategies to curtail the amount of new capacity from solar projects. On both issues, the PUC held firm and would not change their order.

In response, Xcel on April 28^th launched a dramatic tactic to shrink community solar by 80%.

 announced they would take unilateral action to dismantle all community solar projects owned by the same developer that shared a grid connection, within 30 days. That move was in direct opposition to the previous PUC order.

Xcel’s reply comments to the PUC in May hinted at their motivation: “The strongest evidence of the program’s dysfunction is the volume of applications that have been received which neither the Company nor the Department [of Commerce] anticipated before the program was launched.” In addition Xcel admitted in their revised 15-year resource plan, filed on October 2^nd, that they only expect just 20 megawatts of community solar by the end of 2016 regardless of the fact they have over 300 megawatts of projects with completed applications).

The PUC resolved this latest tactic by approving a partial settlement between Xcel and a few smaller CSG developers. The PUC gave Xcel what they wanted by retroactively limiting co-located CSG projects to five 1-megawatt projects, with a size cap of 1 megawatt for new co-located projects. By October, 300 CSG projects that have been awaiting interconnection approval since February still have received no response.