Taxpayer dollars going to state ‘green bank’ program
The Energy News Network reported last week on the state-funded Minnesota Climate Innovation Finance Authority.
The Energy News Network reports:
The Minnesota Climate Innovation Finance Authority, established by state legislators as part of a flurry of climate and clean energy bills in 2023, is charged with annually lending at least $25 million to stimulate clean energy development and greenhouse gas emissions reduction projects.
The timing — as the Trump administration sows chaos and confusion around federal grant funding — is coincidental, but could help some projects withstand the uncertainty.
In 2021, American Experiment warned about the possibility of the Finance Authority, “organized as a non-profit, would be a giant giveaway to green groups and ripe for corruption.” It is also telling that wind and solar projects fear becoming economically nonviable when federal funding is yanked.
The Climate Innovation Finance Authority website contains both strategic plan and investment strategy documents. In case you were wondering what kind of projects the fund supports, here are the goals from an excerpt of the Investment Strategy document:
· Substantially reduces greenhouse gas emissions.
· Reduces energy use without diminishing the level of service.
· Increases the deployment of renewable energy projects, energy storage systems, district heating, smart grid technologies, or microgrid systems.
· Replaces existing fossil-fuel-based technology with an end-use electric technology.
· Supports the development and deployment of electric vehicle charging stations and associated infrastructure, electric buses, and electric fleet vehicles.
· Reduces water use or protects, restores, or preserves the quality of surface waters.
· Incentivizes customers to shift demand in response to changes in the price of electricity or when system reliability is not jeopardized.
These efforts generally will weaken the grid and, those reducing energy use and incentivizing “customers to shift demand in response to changes,” lower Minnesotans’ living standards.
The document goes on to note that the authority prefers projects that target environmental justice communities, projects that create jobs for “workers from environmental justice communities, labor organizations,” projects that certify that “the rights of workers to organize and unionize are recognized,” and projects that rake in an “advanced manufacturing tax credit” under the federal Inflation Reduction Act.
Back to the Energy News Network reporting, which is worth quoting in full:
How large are the loans?
A wide range of loan amounts are available. The green bank requires a minimum loan amount of $250,000, and while the first three loans it issued were all over $1 million, Swan expects a greater variety of loan amounts now that the bank is fully operational. In addition, no loan can exceed 10% of the amount the bank loans annually. The bank may also fund nonprofit lenders who could provide capital to smaller clean energy projects.
How much money is available?
By statute, the bank must lend at least $25 million annually. The Legislature allocated $45 million in 2024 to get the green bank going. Last year, the state competitiveness fund provided $60 million and the federal government added $25 million.
What other requirements are there?
Half of the loans must meet guidelines for environmental justice communities based on the U.S. Department of Energy’s current definition. To qualify, a community’s non-White population must be at least 40%, and 35% of the population must have an income at or below 200% of the poverty level.
How could President Trump’s attacks on federal clean energy affect the program?
Swan thinks federal investment tax credits for clean energy will survive under Trump, adding that unwinding them quickly will be challenging because they’re part of the tax code. But the Trump administration has already signaled a willingness to usurp Congress’ constitutional spending authority when it comes to clean energy, which could mean a greater need for money but also fewer projects ready to fund in Minnesota.
That’s a total of $130 million for “green bank” lending in 2024. It remains up to the taxpayers to decide if this money is well spent.