Climate Innovation Finance Authority: the only innovation is in the grift

Yes, Minnesota, there is now a new state agency that goes by the unwieldy name: MN Climate Innovation Finance Authority.

The Center’s Sarah Montalbano wrote about this new entity yesterday. It’s housed within the state’s Dept. of Commerce and was created by the DFL trifecta in 2023 as a “green bank” to finance renewable energy projects that were otherwise too marginal to receive private-sector financing.

The Authority’s first-ever annual report came out late last week. The “bank” is capitalized with $45 million of your tax money that you so generously donated to the cause. (Thanks!) Of course, more bureaucrats were hired.

At full strength, the Authority’s board consists of thirteen (13) members, all appointed by the Governor. In fact, by law, the board includes six (6) members representing the Governor’s cabinet agencies. At present, all seats are filled, but three of the non-cabinet seats are up for reappointment.

In its first year of operation (2024), the Authority has managed to issue only three loans totaling over $10 million. The first-ever loan issued — and still the largest — was $4.7 million to an entity called The Heights Community Energy, Inc. This nonprofit corporate entity was only formed in late March 2024, three days after the project was approved by the Authority.

The Authority’s $4.7 million contribution represents about 1/3 of the total project cost.

The project is a geothermal energy system supporting a new development on the east side of St. Paul. The real estate development to be served is itself the creation of another governmental agency, the St. Paul Port Authority (SPPA).

The Heights geothermal nonprofit is, in turn, owned by another nonprofit, District Energy St. Paul. District Energy, in turn, is managed by an interlocking for-profit company, Ever-Green Energy.

District Energy operates a heating and cooling system serving buildings in downtown St. Paul, in a “public-private partnership.” District Energy enjoys annual revenue of over $60 million on an asset base of over $170 million, according to IRS records. The nonprofit paid its (now former) CEO Ken Smith an annual compensation of over $550,000.

Its board of directors boasts a former Chair of the state Public Utilities Commission (PUC) and a former mayor of St. Paul. It appears that one or more board members are appointed directly by the City of St. Paul. Several senior executives and board members of District Energy and Ever-Green overlap.

Between the two entities, I’ve been able to record the following campaign donations to Governor Tim Walz:

Now these dollar amounts certainly don’t qualify these men as major donors, but it does demonstrate their understanding of how the game is played. These gentlemen (and other Ever-Green/District executives) also donated to other Democratic candidates and causes in this same period, but I can assure you, never to a Republican.

The Heights geothermal project broke ground last October. The St. Paul Pioneer Press reported:

St. Paul Mayor Melvin Carter this week joined representatives of District Energy, the St. Paul Port Authority, City Council and environmental advocates at the site of the former Hillcrest golf course off Larpenteur Avenue to celebrate construction of the state’s first aquifer thermal energy storage system, and one of the largest networked geothermal energy systems in Minnesota.

It’s all so cozy, as the Pioneer Press summarizes:

The geothermal energy project was backed by a variety of funding sources, including $4.7 million state loan — the first from the new Minnesota Climate Innovation Finance Authority, also known as Minnesota’s “green bank.” MnCIFA was established by the Legislature to accelerate clean energy projects and advance the state’s climate goals.

The Heights Community Energy will own and operate the geothermal system under the direction of District Energy St. Paul, the city’s longstanding nonprofit utility partner, and the St. Paul Port Authority, master developer of The Heights.

State –> City –> City. Two authorities and a district.

The grift goes round and round.