The Minnesota Department of Commerce has released a new proposal revising how utilities implement the state’s Energy Conservation and Optimization (ECO) Program. Many of the changes reflect key recommendations from Housing First Minnesota.
The Department’s Revised Technical Guidance for Efficient Fuel-Switching (EFS), filed October 28, 2025, simplifies program rules and addresses long-standing industry concerns about cost, complexity, and consumer choice.
Simplified Rules and Broader Flexibility
The updated proposal removes complex modeling requirements, allowing utilities to use annual or seasonal averages instead of hourly data when calculating energy and emissions impacts. The Department also dropped earlier requirements that fuel-switching projects improve system load factors or help integrate renewable energy.
“This is an important step toward common-sense energy policy,” said Mark Foster, vice president of legislative and political affairs at Housing First Minnesota. “The Department’s revisions recognize that builders and homeowners need flexible, cost-effective solutions, not one-size-fits-all mandates.”
Fuel Neutrality and Consumer Choice Preserved
The Department reaffirmed its commitment to fuel-neutrality, maintaining eligibility for both natural gas and electric technologies. This ensures homeowners retain options when selecting efficient systems, including hybrid approaches that combine electric and gas components.
That shift aligns directly with Housing First Minnesota’s June 2025 public comments, which urged the Department to reject policies that favored electrification over affordability and practicality.
Reduced Red Tape for Utilities
The revised rules also simplify how utilities participate in the program. Under the new proposal, both electric and gas utilities can claim full energy savings from joint fuel-switching projects, ending prior restrictions that complicated program coordination.
By reducing duplication and streamlining reporting, the Department aims to expand participation and encourage collaboration across Minnesota’s utility network.
Focus on Results, Not Prescriptions
The new guidance moves toward a performance-based model, emphasizing measurable outcomes like total energy savings and greenhouse gas reductions. This marks a shift away from prescriptive technology lists or modeling frameworks.
Housing First Minnesota strongly advocated for this approach, arguing that performance-based standards are more practical for builders and more meaningful for energy policy.
Next Steps
The Department of Commerce will accept public comments on the proposal through November 19, 2025, with a final decision expected by mid-December.
Housing First Minnesota will continue engaging with policymakers to ensure the program’s final design supports affordability, flexibility, and innovation in residential construction.
Bottom Line
The revised ECO Program proposal marks real progress toward balanced, workable energy policy. Thanks to Housing First Minnesota’s advocacy, the new framework promotes energy efficiency while preserving the affordability and consumer choice that remain essential to Minnesota’s housing market.
