CEO’s Report: Minnesota utilities eligible for funding to strengthen grid resiliency

Frontier Energy’s latest presentation had some good news for utilities in Minnesota: The Minnesota Department of Commerce is seeking proposals from eligible utilities for the Strengthening the Reliability and Resiliency of Minnesota’s Electrical Grid Grant Program (40101(d) Program).

This is a competitive grant program seeking proposals for projects which will:

• Increase the resilience of Minnesota’s electric grid against disruptive events
• Advance grid modernization and the deployment of clean energy resources
• Reduce the impacts of climate-driven extreme weather and natural disasters

The program also aims to generate the greatest community benefit and expand or create clean energy workforce opportunities for Minnesotans.

Eligible measures

A core principle of the program is to generate the greatest community benefit in reducing the likelihood and consequences of power outages caused by disruptive events. A disruptive event is defined as “an event in which operations of the electric grid are disrupted, preventively shut off, or cannot operate safely due to extreme weather, wildfire, or a natural disaster.”

Therefore, funding provided by this program may be used to implement a wide range of resilience measures intended to mitigate the impact of disruptive events. In their funding announcement, Commerce recognizes that the meaning of resilience varies across utilities.

Eligible resilience measures may include:

• Weatherization technologies and equipment
• Hardening of power lines, facilities, substations, or other systems
• Monitoring and control technologies
• The undergrounding of electrical equipment
• Replacement of old overhead conductors and underground cables

These are just a few of the methods that may be considered for funding. Training, recruitment, retention and reskilling of workers may also be eligible.

Two rounds of funding expected

The Minnesota Department of Commerce was awarded formula funds through the Infrastructure Investment and Jobs Act for this program.

Commerce anticipates at least two funding rounds for this program. The total funding available for the first round is $11,987,794. Funding for the second round is set at just shy of $6.5 million, but Commerce reserves the right to award a portion of the second round in the first round, if warranted by the number and quality of proposals received.

Other notes of interest for this program include:

• $2 million is the maximum individual award for an eligible entity. Commerce anticipates a greater number of smaller awards will likely be granted, and reserves the right to provide partial awards or full awards for any project proposal.
• More than $2 million may be awarded to one single proposal if it supports a consortium of eligible entities.
• A cost match requirement applies for recipients of funds under the program. Cost match assistance is available through the State Competitiveness Fund Match Program.
  • Entities which sell less than 4 million megawatt hours of electricity per year are required to provide a cost match of 1/3 the grant award.
  • Entities which sell more than 4 million megawatt hours of electricity per year are required to provide a cost match of 100% of the grant award.

Competitive priorities

Priority will be given to projects that will generate the greatest community benefit in reducing the likelihood and consequences of disruptive events and empower electric customers and communities to be resilient to disruptive events.

Section 40101(d) requires that the percentage of funding made available to small utilities shall not be less than the percentage of customers in the state that are served by those entities. Using this formula, Commerce has determined that the share of Minnesota’s set-aside for small utilities can be no less than 45% of program funding.

Commerce will assign priority points to small entities to support a larger number of eligible entities and projects throughout the state.

To learn more about the program, I encourage you to listen to Frontier Energy’s presentation from June 25. You can also reach out to them with questions.

More information as well as a link to the RFP can be found here.

Applications for the first round are due August 26, 2024.