Natural Gas Innovation Act
Innovation to advance Minnesota's energy future
In July 2024, CenterPoint Energy received approval from the Minnesota Public Utilities Commission (PUC) to implement a diverse set of innovative pilot projects that aim to reduce greenhouse gas emissions and advance decarbonization efforts for our Minnesota customers. The approved plan includes investments in made-in-Minnesota low- and zero-carbon gases like renewable natural gas and green hydrogen, as well as emerging technologies such as networked geothermal systems and onsite carbon capture.
The projects are part of a five-year innovation plan submitted under a landmark state energy law: the Natural Gas Innovation Act (NGIA). Passed with bipartisan support in 2021, the NGIA created a new regulatory framework for natural gas utilities to invest in renewable energy resources and innovative technologies to help reduce Minnesota’s greenhouse gas emissions. CenterPoint is the first utility in Minnesota to file and have an innovation plan approved.
According to the U.S. Energy Information Administration, more than two-thirds of Minnesota households, or 1.5 million households, depend on natural gas for heating, in addition to natural gas supporting the operations of many businesses and industries in the state.
The CenterPoint innovation plan helps advance decarbonization efforts, while maintaining readily available, safe and reliable energy solutions to keep Minnesotans warm during the coldest days of winter.
What are the benefits of CenterPoint’s innovation plan?
CenterPoint’s innovation plan is expected to deliver significant benefits to Minnesota, including:
- Reducing or avoiding an estimated 1.2 million tons of carbon emissions over the lifetime of the projects – equivalent to the annual energy use of approximately 150,000 homes or 14% of total emissions from natural gas supplied to CenterPoint customers in Minnesota each year.
- Creating an estimated 3,000 full-time equivalent jobs over the pilot projects’ lifetimes.
- Leveraging an estimated $17 million or more in federal clean energy incentives (as applicable).
What is included in CenterPoint’s innovation plan?
Our proposed innovation plan includes 17 pilot projects that can be evaluated and deployed. Key pilot projects include:
Investing in made-in-Minnesota gas alternatives
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Renewable natural gas (RNG) is produced by recycling organic waste materials from farms, food waste, wastewater treatment facilities and other sources to produce pipeline-quality gas. CenterPoint plans to purchase RNG to help offset greenhouse gas emissions attributed to energy used by customers.
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Green hydrogen is produced by splitting water into oxygen and hydrogen using renewable electricity. It can be blended into the utility’s natural gas supply or used directly in a dedicated system with industrial or large commercial customers. CenterPoint has a green hydrogen production facility pilot project that’s been in operation in Minneapolis since 2022. The plan includes developing a second green-hydrogen production facility, which will use onsite solar panels and include a hydrogen storage system at a CenterPoint-owned property near Mankato, Minnesota.
Networked geothermal system
CenterPoint plans to develop a networked geothermal system, also known as a thermal energy network, to provide building heating and cooling to a neighborhood currently served by the utility. A geothermal system uses a network of wells, water, pipes and pumps to pull heat out of the ground, delivering warmth to buildings in winter and pumping heat from those buildings back into the ground to provide cooling in summer. Additionally, CenterPoint will offer incentives available for large customers to partially offset costs to install and operate their own networked geothermal system.
Hybrid heating
The plan includes incentives for home and business customers to install hybrid heating systems that use electric heat pumps with supplemental natural gas heating for the coldest days with the goal of reducing customer energy costs and maintaining energy efficiency.
Industrial decarbonization
Through this plan, CenterPoint is seeking opportunities to help customers reduce their emissions in more difficult-to-decarbonize sectors. The plan includes incentives and other support to industrial customers intended to help improve efficiency and reduce emissions for high-heat processes such as glassmaking, concrete production and metal foundries. Technologies that could be leveraged depend on the type of business and may include electric heat pumps, onsite carbon capture, installing onsite green hydrogen production facilities and updating boilers to use up to 100% green hydrogen.
