Minnesota Energy Center

1. Minnesota Energy Center Xcel Energy Renewable Development Fund MnSCU Block Grant May 6, 2016

2. Goals for today’s discussion • History on Xcel Renewable Development Fund (RDF) • Framework for MnSCU Block Grant • Details on the MnSCU RFP process • Q&A

3. MnSCU Project Team Program Manager • Bruce Peterson, MN Energy Center Project Manager • Rose Patzer, MnWest CTC Principal Investigators • Matthew Julius, St. Cloud State University • Patrick Tebbe, MN State University, Mankato System Office • Mike McGee General Counsel • Sarah McGee Facilities • Greg Ewig

4. Xcel RDF Background • Funded by Xcel Energy Ratepayers • Established by 1994 Prairie Island legislation to support renewable electric energy development • Entirely supported by Xcel Energy ratepayers • Program activities and expenditures subject to approval by the MN Public Utilities Commission • Program managed by Xcel Energy with input from the RDF Advisory Board • www.xcelenergy.com/rdf • Mn Statute 116C.779, subd. 1 (d)

5. Xcel RDF Block Grant • Higher Education institution research projects (Block Grant) • 2012 Legislation (S.F. 2181)Higher education institutions located in Minnesota may apply for multiple research projects and be exempt from third-party review requirements if instead the institution provides for project evaluation and selection by a merit peer review grant system. • Permits Xcel Energy to issue an RFP to higher education institutions located in Minnesota • Multiple projects to stimulate research and development within Minnesota into renewable electric energy technologies

6. Xcel Selection criteria • Focus solely on renewable electric energy research • Xcel seeks to provide qualified educational institutions (All MnSCU colleges and universities are eligible) with maximum flexibility to design and implement programs that work within the educational institutions existing systems and culture.

7. Xcel defined program activities Eligible Program Activities Ineligible Program Activities • Will conduct research on the following: • Renewable technologies such as wind, hydro, electrical generation from biomass, electrical generation from biofuel, solar photovoltaics, and electrical generation from solar-electric. • Alternative renewable energy technologies not identified above but that meet the statutory definition as a renewable energy technology or fuel type. • Any research activity that has received, or is currently receiving, RDF funding awarded through prior RDF funding cycles will not be eligible for additional funding to support program activities. • Research that proposes to displace electricity use through energy conservation or demand-side management programs. • Solar thermal research, whose primary purpose is producing heat, for example solar thermal water heat.

8. Xcel Program Scope • Clear, appropriate and complete plan • Aligned to RDF mission • Clear and realistic schedule • Well defined, achievable, and realistic product or project to funding level • Appropriate set of measurable and realistic performance metrics to assess progress and success

9. Methodology and Research Approach • Active approach to distribute findings • Rigorous quality control program to assure reliability and reproducibility • Objective review process to assure compliance • Process to evaluate and validate initiatives and findings • Timely and efficient process for reporting activities and findings

10. Benefits to Minnesota and Ratepayers • Consideration to following • Royalties • Benefits to Ratepayers • Appropriate to Minnesota • Barriers to market development • Environmental • Resources • Governmental • Utility integration • Location constraints • Building / Installation constraints • Public Safety Constraints • Economic Benefits • Environmental benefits

11. Funding levels • MnSCU Institutions Block Grant totals $5.5 million. • This includes funds for grant management • Maximum for an individual proposal is $750,000

12. Funding Cycle • Grant is for three years • Two rounds of funding • Up to 14 projects • Max funding available per project $750,000 • 15% indirect costs maximum in each project • 15% of overall grant indirect costs for management/administration of grant

13. MnSCU Block Grant Goals • Solicit proposals of high quality renewable electric energy technology research projects • Review projects to assess relevance and merit • Select the best projects to be funded • Ensure projects adhere to goals, objectives and timelines

14. MnSCU Uniqueness and Strengths • Funding a wide variety of research interests • Impacting a large geographic region • Facilitating collaborative projects • Establishing and defining a pathway to bring technology to industry, allowing the transfer of technology to the workforce

15. Contracting • General Counsel will create a new contract specific for this grant program • Contracts will be with the system (MnSCU) • Each employee engaged in a sub-grant project will need a contract giving IP from the project to MnSCU • Your college/university does not have to be located in Xcel service territory to be eligible for this grant. • All grant related documents posted at: • http://energycareersminnesota.com/xcel-rdf/ • Entire project is governed by our contract with Xcel • 12-1278 Compliance Filing 022216 (NSP)

16. Elements for Sub-grant Application (1/2)

17. Elements for Sub-grant Application (1/2)

18. Research Selection Protocols • Review process will include: • Peer review committee initial assessment • Merit review process • Final review and project selection by peer review committee • Solving a technical issue related to electrical renewable energy • Removal of a technical, cost, or other barrier for market penetration • How the advance in science or technology is of value to electric ratepayers • How the expected research contribution will bring a technology to market

19. Performance Review Criteria • Increase the market penetration within the state of renewable electric energy resources at reasonable costs • Promote the start-up, expansion or attraction of renewable electric energy projects and companies within the state • Stimulate research and development within the state into renewable electric energy technologies • Develop near-commercial and demonstration scale renewable electric projects or electric infrastructure delivery products if those projects enhance delivery of renewable electric energy.

20. Reporting requirements • Each project will submit monthly progress reports • Quarterly Activity reports including Quarterly Financial report required 30 days after the end of previous quarter • Quarterly invoice with appropriate documentation submitted for review • Co-PIs and Program Director must approve payment based upon satisfactory completion of project activity

21. Reporting • Document progress and assure transparency of projects and expenditures • Reporting and dissemination of information will be shared by the sub-grantees and grant staff

22. Sub-grantee Responsibilities • Upon receipt of grant award: • Immediately submit a goal document with measureable outcomes, estimated expenditures, expected timelines, and a dissemination plan • Monthly submit brief summaries of goal progress • Identify unexpected deviations from planned timelines, expenditures, and/or disseminations

23. Sub-grantee Responsibilities • Detailed quarterly reports must specify progress of all sub-grantee goals and timelines • General summary of grant activities, • Expenditure details and updates, • Status updates on research goals, objectives and activities • Timelines updates • Summaries of applications and benefits • Whether any assistance is needed for special issues or technical assistance • Best practices and lessons learned • Potential or actual Intellectual Property created

24. Grant management responsibility • Quarterly management reports back to Xcel Energy • Detail progress on each project • Monitoring of each project and keeping projects focused and on track • Annual written reports will be submitted to Xcel Energy along with delivery of a presentation summarizing yearly progress. Sub-grantees will assist in these presentations.

25. Project results dissemination • Sub-grantee will submit a dissemination plan for their project • Presentations • Papers • Marketing materials • System-wide dissemination: • Bi-annual report to MnSCU Academic Affairs Council • Annual presentation to the Minnesota Energy Consortium • Annual presentation to Minnesota Renewable Energy Roundtable • Capstone event to showcase all funded projects and research results

26. Agreement details • The RDF grant money will be considered a “Sponsorship Agreement” under Board Policy 3.26, Subpart B. • XCEL (NSP) owns all “future reports and deliverable data” originating from the grant money. • All other intellectual property originating from grant dollars will be owned by the MnSCU system, and will have to be signed over by the individual faculty who receive grant money before, and as a condition of, getting the grant money. • Any royalties (net revenue) from commercialization of the intellectual property will go 10% to Xcel and the remainder to the MnSCU system.

27. Budget Development Guidelines • Proposals should include a thorough discussion of the following: • Appropriateness of the amount of RDF Funding requested for the program relative to the work proposed • Type, amount and source of match funding (if any) that will be brought to the program, with description of how these funds fit the overall funding strategy and implications of such matching funds. • The entire financing requirements/needs of the program, and how these needs will be met. • An itemization of total program costs including contractor and subcontractor costs by activity, and hourly billing rates. Capital and operating expenses for the proposed program, including any material or equipment that is proposed for purchase using RDF funds. • Any travel expenses for the program for which reimbursement will be sought, and any other miscellaneous expenses that are not included in any other category.

28. Budget guidelines • Indirect costs • 15% institution • 15% grant management

29. Budget preparation

30. Potential Facility Issues • Must be addressed in proposals • Secure campus and System Office hazardous materials coordinator approvals as appropriate • Identify potential: Capital purchases Hazardous Materials MPCA/OSHA issues Inside building/outside grounds Accessibility Contractor requirements/ issues Engineering needs Safety and Security of project site

31. Schedule • 30 day development/response time from release to submission • 30 day review time for Peer review/Merit review/ and award announcements • Intra-agency agreements from MnWest to individual institutions

32. Anticipated timing ILLUSTRATIVE 2016 2017 Jun Jul Aug Sep Oct Nov Dec Jan Feb Activity RFP released 6/1/16 Proposals due 7/15/16 Review process Notice of Awards 8/1516 RFP released 12/15/16 Proposals due 1/15/17 Review process Notice of Awards 2/15/17 Dates are subject to change and are dependent on Xcel/MnSCU grant contract

33. MnSCU Project Team Program Manager • Bruce Peterson, MN Energy Center Project Manager • Rose Patzer, MnWest Principal Investigators • Matthew Julius, St. Cloud State University • Patrick Tebbe, MN State University, Mankato System Office • Mike McGee General Counsel • Sarah McGee Facilities • Greg Ewig

34. Where will information be posted? • http://www.energycareersminnesota.com • OLA report (Oct 2010) • Xcel RDF rfp (Feb 2013) • MnSCU application (April 2013) • Xcel/MnSCU contract • Powerpoint presentation (will be posted Monday) • Coming Soon: • FAQ We will establish a new page to share questions and responses • MnSCU RDF RFP

35. General criteria restated • All proposals must meet these criteria: 1) Clearly stated overall objective to include renewable product or process being researched, the focus of the research work, and anticipated electrical production results. Projects must be sufficiently discrete as to produce known and measurable results prior to Contract End Date. • 2) Anticipated government approvals required/anticipated and if those approvals are in place/in discussion/ or not yet addressed. • 3) Expertise of campus personnel, facilities to be used, equipment available or needed, internal (college) funding to be used in the project, Co-funding resources proposed or committed and other resource needs anticipated. • 4) Plan for student engagement in research work. Included in this description should be anticipated curricular impact and program involvement. • 5) Potential needs for additional contracts, orders, leases and/or related documents to complete work.

36. General criteria restated continued • 6) Local College/University administrative approval to include President, All appropriate Vice Presidents, Facilities Supervisor, Dean of Academic Area involved. Engineering needs identified and approved by College/University VP of Administration (or equivalent position). • 7) Identification of local codes compliance requirements, approval or pending. Where appropriate, MnSCU Facilities approval must be included. Approval sign-off by campus facilities director/staff will be required. • 8) Overall safety plan for research project. Safety plans will be reviewed by MnSCU facilities staff and require approval sign-off of campus facilities director/staff. • 9) Institution Insurance Certificate of Coverage naming Xcel Energy on policy. These will require annual updates for all awarded sub-grantees. • 10) List of all services, facilities, equipment, supplies and laboratory or production facilities required for project implementation. College/University Facilities approval required.

37. General Criteria restated conclusion • 11) Project path/work plan will be submitted with each project proposal to outline project critical milestones and time projections for completion of milestones and overall project. • 12) A description of all intellectual property anticipated through the project along with planned ownership and/or license developed through the project. • 13) Each proposal team must agree to comply will all reporting requirements and participate in project showcase events to share results and knowledge gained. • 14) Anticipated involvement of industry partners through the project.

38. Past Questions and responses • Please define what is meant by “research” • To respond to this I offer four definitions that seem to best define the intent of this grant as found in the Merriam-Webster dictionary: • 1) Careful study that is done to find and report new knowledge about something • 2) The activity of getting information about a subject • 3) Investigation or experimentation aimed at the discovery and interpretation of facts, revision of accepted theories or laws in the light of new facts, or practical application of such new or revised theories or laws • 4) The collecting of information about a particular subject. • Most important in this project is the need to produce and report data about the topic being researched.

39. Past Questions and responses • If we partner with another school on a project, will the project be limited to the $750,000 even though there are two schools involved? • Each project proposal is limited to $750,000. We certainly encourage collaboration of multiple institutions, especially those where University research and College technical programs might be engaged. • There may be opportunities where a project is identified at one institution and an opportunity to “spin-off” a segment of the project can become the focus of a separate institution. If this were done, there is no guarantee that all segments would be funded. It is important this be considered in the planning to assure an independent project can truly be performed separated from the other segments.

40. Past Questions and responses • Would preference be given to a project using a variety of technologies or would it be best to stick to one technology? • This will be the decision of the writers as they propose a project. Normally it is best to keep an individual project focused in order to assure the likelihood of completion. In this particular grant, it may be best to prepare more than one proposal with each focused on the independent technology to be studied.

41. Past Questions and responses • How would you see 2-year community colleges playing a role in proposals? Could you provide an example of how community colleges could participate? • First it is important to suggest this is not a fund intended to establish new programs. The focus of this fund is to perform research in renewable electrical energy. • For colleges that have established energy programs, this could be a way to enhance those programs by adding or growing an element of research in the technologies being emphasized in the existing programs. • I would also encourage community and technical colleges to look beyond the technical program areas. A project that can incorporate both the technician development and understanding as well as engaging the environmental science study of impact could be developed. • While research has not been a dominant part of the culture in community and technical colleges, this may be an opportunity to engage multiple areas of study across a college.

42. Past Questions and responses • Does a proposed project need to be new technology or can it be improvement of existing technology for electric power generation? • A project can be proposed in either area of study. One encouraged focus of the program is to bring new electrical production technologies to market. Another is to research and find ways to improve existing technologies to increase efficiency and increase production of electricity.

43. Past Questions and responses • Does electrical generation have to be produced at a college or can the product be given/sold to an electrical facility for use? • It can be done in either situation. As a project is developed that would involve contracts with other partners, the ownership of products will need to be carefully defined, including the implications of IP in new product development. • A second key component will be to carefully define how the research into the elements of electricity produced will be documented. Ultimately this grant program is focused on electricity production so a tracking from initial cost investment through the processing will be necessary to chart the cost benefits of a particular technology. • The final outcome of a product needs to have an element of the electricity produced by the process, not what is projected that could be produced. Electricity must be produced and somehow tracked back to investment of resources.

44. Past Questions and responses • Will solar projects be eligible for other Xcel funding programs, such as solar rewards or made in MN credits? • Individual projects may be eligible for credits of various programs now available from power companies and government programs. Each proposal should consider those potential cost benefits through the development process. It is probable those credits or financial “kick-backs” will be tracked back to the RDF grant program and could be used for future project advancement. They should not be considered property of the institution since the funds used to pay for the program are not institutional dollars. • Should these situations arise, they will each be analyzed individually to assure program integrity.

45. Past Questions and responses • Does research have to be technically-focused or can it be focused on education, outreach, behavior change or other social science arenas? • The research design of these projects must be focused on electrical energy production. As mentioned in other questions above, broadening the impact of this knowledge across multiple curriculum areas is desired, but the primary focus must remain on electrical energy production research.

46. Past Questions and responses • Just to clarify, this is “not to be used for new renewable energy program development?” • The intent of this grant is to do research and development in renewable electrical energy. These funds are not intended to establish new technical programs. The projects funded under this grant program will be able to generate data related to electrical output of the involved technologies.

47. Past Questions and responses • What is the requirement for matching funds? • There is not a "required" match. We only included some funds for facility use as a match in the proposal. So where you will be using some facility space for a project should be considered as in-kind match. If you have college owned resources that will be used, that could also be match. If a partner company will contribute, we want to count that.

48. Contact • Bruce Peterson • Director, Minnesota Energy Center • 320-308-6639 • bpeterson@sctcc.edu