Natural Gas Innovation Act Amber Lee Regulatory Affairs

Natural Gas Innovation Act Amber Lee, Regulatory Affairs - Minnesota February 11, 2021

Natural Gas is Essential to Meeting Minnesota’s Energy Needs Natural gas provides essential energy that Minnesota homes and businesses count on every day, especially on the coldest days. 2019 Polar Vortex Center. Point System vs. Electric System MN Wind & Solar Capacity MN Total Electric Capacity Center. Point '19 Polar Vortex , 0 5 000, 0 10 00 0, 0 Megawatts Equivalent 15 00 0, 0 20 00 0, 0 Source: U. S. Energy Information Administration (EIA) https: //www. eia. gov/electricity/data/state 2

Natural Gas Innovation Act Establishes a regulatory framework to: • Provide a process for the Public Utilities Commission to evaluate investments in innovative projects to help decarbonize the natural gas system; • Maintain an all-of-the-above energy strategy to keep natural gas reliable and affordable in meeting the energy needs of Minnesota homes and businesses; and • Promote local economic opportunities and job creation with development of new made-in-Minnesota clean energy resources 3

Natural Gas Innovation Act • Clarifies legislative intent that natural gas utilities can assist the state in meeting existing renewable energy and greenhouse gas reduction goals • Authorizes the Public Utilities Commission to review a natural gas utility’s “innovation plan” (based on comprehensive criteria) • Provides opportunities for stakeholder input in the Commission proceedings • Sets maximum allowable costs to limit impact on ratepayers 4

Innovation Example #1 Renewable Natural Gas RNG is produced by recycling biogas from organic materials such as agricultural manure, wastewater and commercial food waste. 5

Innovation Example #2 Renewable Hydrogen Renewable electricity is used to split water to create carbon-free hydrogen for blending with natural gas. 6

Innovation Example #3 End-Use Carbon Capture End-use carbon capture technology can be used with natural gas space or water heating equipment in multi-family housing and commercial buildings. It converts CO 2 emissions into a powder that can be recycled into commercial products. 7

Natural Gas Innovation Act A “Win-Win” Opportunity for Minnesota • Energy Opportunity • Economic Opportunity • Environmental Opportunity 8