Minneapolis “green zone” community leaders are contemplating their options after utility Xcel Energy this week unexpectedly revoked funding for a resilience-focused microgrid project.
The city has identified the neighborhoods as high priorities for green investment due to their demographics and histories of environmental injustice.
The Resilient Minneapolis Project aims to install solar-powered microgrids on two community centers and a job training center. The locations would serve as hubs in the event of climate or other emergencies, offering food, electricity, information, and medical care for neighbors and first responders.
“There are substantial benefits to these communities and the grid,” said Jamez Staples, a North Minneapolis clean energy entrepreneur and the visionary behind the Regional Apprenticeship Training Center, one of the planned resilience hub sites. The others are the American Indian Center and Sabathani Community Center in south Minneapolis.
Xcel Energy had committed to using $9 million in ratepayer funds to install and operate batteries at each site before abruptly pulling that funding this week, putting the entire project on hold until the city and community leaders can assess next steps and possible replacement funding.
“We have been informed of Xcel’s decision to discontinue the Resilient Minneapolis Project and are disappointed. These projects were negotiated with the City of Minneapolis and approved by the state Public Utilities Commission and hundreds of hours of collaboration and evaluation have gone into making the projects a reality,” a city spokesperson said in a written statement.
The city is in the process of adopting a new Climate Equity Plan, updating its decade-old climate plan with a new focus on equity. The resilience hub concept is a key piece of that plan, and the city said in its statement that it would continue communicating with Xcel Energy to determine if the project could be revived.
Xcel Energy cited inflation as the reason it was walking away from the project. In a statement, the utility said project costs had increased more than 70% and that supply chain issues “challenged the project timeline.”
“We remain deeply invested in working with our partners and intend to continue discussions on potential future collaborations, including community resiliency projects, as we continue our commitment to connect with and support our communities,” the company said.
The announcement comes a week after the Minnesota Public Utilities Commission approved a rate increase for the company that was less than half of what it originally sought. In the wake of that decision, the company said it would need to reevaluate its planned investments in clean energy.
Research by Bloomberg NEF showed lithium-ion battery pack prices increased 7% from 2021 to 2022 and would likely increase slightly again this year. Lithium prices have significantly escalated as demand grows from various markets for automobile manufacturers, battery and battery storage companies.
Staples and his partner, Michael Krause of Kandiyo Consulting, have contacted the city, Sabathani and the American Indian Center about options for continuing the project. Construction crews are already replacing Sabathani’s roof this summer, a project in part driven by the opportunity to install solar panels as part of the Resilient Minneapolis Project.
With money available from the Inflation Reduction Act, the state and other sources, Staples hopes the Resilient Minneapolis Project can continue even without Xcel.