With its appropriations devoted chiefly to keeping the Public Utilities Commission and the Commerce Department’s energy division in working order, the energy finance and policy law limits the bulk of its policy changes to initiating a financial safety net for unexpected natural gas price spikes.
The law’s net General Fund spending will be $48.84 million in the 2026-27 biennium. Of that, $26.75 million will go to the Public Utilities Commission – including $3.8 million in new appropriations – while $22.09 million will go to the Commerce Department’s energy resources division.
Appropriations for programs directly administered by the Commerce Department include $1.92 million for community solar gardens and $602,000 to implement energy benchmarking. A $1 million grant will support activities of the Clean Energy Resource Teams.
Additional appropriations are made to support the department’s review of plans and participation in Public Utilities Commission proceedings with respect to the following programs:
• $530,000 to review electric transmission line owners’ plans to deploy grid-enhancing technologies;
• $378,000 to review utility natural gas innovation plans;
• $328,000 to review public utility transportation electrification plans;
• $300,000 to remediate vermiculite insulation from households;
• $154,000 for appeals of consumer complaints; and
• $92,000 for energy transmission planning along trunk highway rights-of-way.
The law also includes $3.19 million to reimburse costs incurred in responding to petroleum tank leaks and $2.4 million for pre-weatherization programs.
A General Fund appropriation of $1 million will go toward an air ventilation pilot project established in 2023. The law will also extend Xcel Energy’s Solar Rewards appropriations through 2035 and maintain the requirement that 50% of that funding support low-income households.
For the 2028-29 biennium, the law appropriates $46.29 million in net General Fund spending, including $26.37 million for the Public Utilities Commission and $21.56 million for the Commerce Department’s energy resources division.
Renewable Development Account
The law also includes $600,000 in outlays from the Renewable Development Account, a fund that Xcel Energy customers pay into to fund renewable energy projects in the state, such as those employing solar, wind or geothermal power. Xcel Energy pays into the account based on the number of casks of nuclear waste stored at its Prairie Island and Monticello nuclear power plants.
The timelines to expend previous Renewable Development Account appropriations are extended through the 2026-27 biennium for a solar array at the National Sports Center in Blaine ($4.2 million) and the University of St. Thomas Center for Microgrid Research ($3.2 million). The latter also receives $400,000 in new funding.
There will also be an outlay of $200,000 from the account to make payments to homeowners who installed solar panels under the “Made in Minnesota” solar energy production incentive program. And the Department of Administration will receive $184,000 for software and administration of a state building energy conservation improvement revolving loan program.
Policy
The only major policy change in the law is a “Securitization” section dealing with “extraordinary events” that can lead to significant costs for natural gas customers.
Inspired by an historic Texas freeze in February 2021 that caused natural gas prices to temporarily soar, this provision will allow public utilities to issue “extraordinary event bonds” at lower rates of interest to reduce the costs for consumers in the event of such price spikes.
Sponsored by Rep. Patty Acomb (DFL-Minnetonka) and Sen. Nick Frentz (DFL-North Mankato), the law took effect June 15, 2025.
2025 Special Session: SSHF7/SSSF2*/CH7