A NOTE FROM KEN
As we reflect on the past year, I am both honored and humbled to share with you the remarkable journey of District Energy St. Paul as we celebrate our 40th anniversary of serving the Saint Paul community. This anniversary is a testament to the enduring legacy of District Energy. Four decades ago, our journey began with a visionary idea that took root in the minds of individuals like George Latimer, Alice Murphy, and Hans Nyman, who saw the potential for a district energy system that would serve the immediate needs of Saint Paul, and also serve as a model for the nation. Their foresight, coupled with the support of a forward-thinking board of directors, laid the foundation for what would become an example for district energy systems across the country.
The heart of our success lies in our deep connection with the Saint Paul community. We owe our growth to the collaborative spirit of the individuals, businesses, and leaders who signed onto the system and contributed in other ways to its development. Our journey has been one of partnership, innovation, and shared commitment to a sustainable future. At the core of District Energy’s mission is a dedication to moving our community towards its goals of energy reliability, efficiency, and sustainability. People have always been the foundation of District Energy. As we celebrate this milestone, I have always seen my role to be a steward entrusted with the responsibility of safeguarding and advancing this system for the benefit of the customers and community, while continuing to be a model for others.
Looking ahead, District Energy stands at an intersection of opportunity and responsibility. As we continue to advance and work towards decarbonization of the system, carbon free electricity powered solutions will increasingly play a pivotal role in our future. Among these solutions, heat recovery from wastewater stands out as a promising avenue for furthering our commitment to sustainability while delivering on our responsibility for reliable and cost-effective services. Additionally, we will continue our ongoing efforts to repurpose urban tree waste, turning it into a valuable energy resources of renewable heat and renewable electricity through our combined heat and power plant.
Throughout our history we have been able to advance our plans and aspirations for a more sustainable system because of the support of our customers and community. Each year, District Energy St. Paul conducts customer surveys to collect valuable feedback that plays a pivotal role in shaping our priorities. These initiatives consistently align with the comprehensive framework laid out in the MN Climate Action Framework, the City of Saint Paul’s Climate Action and Reliance Plan, and the overarching goals envisioned by community leaders. This innovative and collaborative work will continue District Energy’s long history of leading the way for other communities to see the possibilities or actualizing big ideas to advance energy solutions.
I extend my sincere gratitude to our customers, the Saint Paul community, our dedicated team, and our partners for their unwavering support over the last 40 years. Together, we have achieved remarkable milestones, and together, we will continue to build a sustainable, resilient, and vibrant future for Saint Paul.
Here’s to 40 years of innovation, collaboration, and service to the community that started it all.
Sincerely,
Ken Smith
President and CEO
Leading the Way
District Energy was built on strong values that include innovation, customer service, community engagement, and environmental stewardship. In partnership with the City of Saint Paul and local business leaders, we have developed a valuable solution for the community that has been a model for cities and campuses around the world for 40 years. As we celebrate our collective achievements, we also look forward as we continue our system advancement and decarbonization efforts.
Advancing Technology
From the beginning, District Energy has integrated proven, but not universally applied technologies. For example, the system was one of the first hot water district heating systems in the United States. In the first three years of the service, 80 customers were connected to the system. Many of these buildings had been connected to the shuttered steam heating system, and their building mechanical systems had to be altered to accommodate hot water services. The system design and customer transition was made possible through the expertise of Swedish engineer Hans Nyman, the organization’s first president, and low-interest loans from the City of Saint Paul. District Energy then integrated cooling services, biomass-fired combined heat and power, thermal storage, solar thermal technology, advanced metering and a customer portal. Learning from global energy leaders throughout our history, we have brought advanced energy solutions to our community. Each system advancement has been to the benefit of customers and helped to improve efficiency, reduce carbon emissions, and deliver renewable energy.
In 2023, our team studied the integration of waste heat from the Metropolitan Wastewater Treatment Plant in Saint Paul. While we are in the early phases of consideration, it is an example of how we could incorporate industrial process waste heat into the system to further decarbonize the energy that we deliver to customers while reducing the City’s carbon emissions. This year we also continued to work on the hydrogen combined heat and power demonstration project to advance the understanding of the viability and efficiency of hydrogen in this application in cooperation with Caterpillar, Inc. and the Department of Energy’s Office of Energy Efficiency and Renewable Energy as well as the National Renewable Energy Laboratory.
Customers First
Saint Paul is the seat of state, county, and city government with offices for Fortune 500 companies, advanced health care services, and our community’s favorite restaurants, sports teams, and arts venues. These organizations and their customers need reliable heating and cooling, and they are increasingly seeking low-carbon energy services. When adjusted for inflation, District Energy customers are paying less for services today than when services began in 1983. Our rates are competitive and stable, with rate increases remaining below the rate of inflation for decades. As a nonprofit utility, our board includes customer representatives who help to set rates and shape our strategic direction. Investments in the system are focused on what our customers need, balancing reliability, cost, and the environment. Our team works closely with customers to learn their building systems and support their operations. Over the years, we have provided value by delivering training and developing tools to support customer building efficiency and energy use analysis. By putting customers first, we continue to adapt our system and services to help move customers closer to their goals and provide excellent service.
Customers tour the plant during our annual customer appreciation event
Demonstrating Innovation
District Energy’s founders envisioned the system to be a model for the nation. Our spirit of knowledge sharing continues today. Guests seeking to learn from our experience have traveled to Saint Paul from small and large communities in Minnesota, from across the United States, and around the world. Our team provides tours of our operations and shares our lessons learned and technical advice.
In 1998, we formalized our consultation services through the development of Ever-Green Energy. Ever-Green is a wholly owned subsidiary of District Energy that provides engineering, operations, and management services beyond Saint Paul. Our team continues to host guests in Saint Paul, and through Ever-Green, we work with communities across North America to develop and operate energy systems that are based on the District Energy St. Paul model.
Photo left to right: District Energy President and CEO Anders Rydaker, US Department of Energy Secretary of Energy Spencer Abraham, President George W. Bush, Cinergy CEO Jim Rogers, US EPA Administrator Christine T. Whitman, US Senator Norm Coleman, and District Energy SVP of Operations Mike Burns
“The plant is a model of energy efficiency. It is also a model of energy diversity,” says President Bush after touring District Energy St. Paul.
St. Paul Pioneer Press, May 18, 2001
Dignitaries visit to learn about biomass innovation*
“Throughout their years of operation, District Energy and Ever-Green Energy have demonstrated a spirit of innovation and relentless progress combined with true expertise and sound management. Their operations have won praise from all over the world as well as the appreciation of our entire Saint Paul community.”
– US Congresswoman Betty McCollum, September 2023
40th Anniversary Event
Saint Paul Community and Education
Chris Peterson, Director of Production, giving a tour to students at the Saint Paul plant
District Energy St. Paul is deeply committed to serving and educating the Saint Paul community. Education stands as a core pillar integral to our mission of raising awareness about district energy solutions, designed with the communities we serve in mind. Our commitment to energy literacy shapes our approach to engagement, recognizing that increasing awareness about district energy is crucial for fostering an informed and engaged community.
One of the key ways we fulfill this commitment is through our plant tours. Welcoming customers, community members, and learners from diverse backgrounds, we have hosted participants from over 100 countries for tours of our facility in our 40 years of service. In 2023, after a brief hiatus due to COVID-19, we were happy to resume our tours and engage with over 200 tour participants, sharing insights into the inner workings of our production plant, distribution system, and customer mechanical systems.
Expanding beyond plant tours, District Energy conducts other educational initiatives including classroom visits, community event participation, and customer seminars. These efforts aim to clearly explain the fundamentals of district energy systems, providing individuals with a platform to deepen their understanding of heating and cooling and become more familiar with District Energy and the work we do in the community. By fostering a learning environment, we believe we can empower our community to take interest and stock in their energy sources and services.
As we continue to provide reliable energy to Saint Paul, our commitment to education remains robust. We firmly believe that an informed community is an empowered one, dedicated to a sustainable future. At District Energy we look forward to more collaboration, learning, and community engagement.
Jenae Batt, Director of Marketing and Public Relations, presenting to a group of Dakota County Technical College students before they tour the facility
Giving in Saint Paul
Team members assembling cold weather and hygiene kits for Catholic Charities
The District Energy philanthropy and volunteerism philosophy is focused on customers, community, and environment, which means we aim to put our time and giving budget toward nonprofit organizations on the Saint Paul system as well as those that serve our community and natural environment.
In summer 2023, team members volunteered their time with Metro Blooms by planting native species as part of their turf to pollinator garden project at Battle Creek Regional Park in Saint Paul.
We also supported Catholic Charities by staffing their lunch service and through in-kind donations collected at our mitten and sock drive. Following the drive, team members gathered to assemble cold weather and hygiene kits leading up to colder winter days. Catholic Charities’ programs for children, families, and adults help nearly 23,000 people annually, regardless of faith, background, or circumstance, and District Energy is proud to heat and cool their downtown buildings.
Each employee has eight hours of volunteer time to use during their working hours throughout the calendar year. This year team members used 87 hours, with 18 employees participating, which is 18% of the Saint Paul team. Many District Energy team members contribute to serving essential system roles after business hours to provide 24/7/365 system monitoring, allowing other team members to volunteer.
Annual Report 2023
Financials
Rates & Unit Sales
Heating Services
| YEAR-END 9/30 | FY2023 | FY2022 |
|---|---|---|
| Demand rate ($/kW/mo) | $6.03 | $5.80 |
| Energy charge ($$/MWh) | $33.73 | $30.55 |
| Overall rate ($/MMBtu, 1700 Util hrs) | $22.35 | $20.95 |
| Demand (kW) | 186,383 | 183,838 |
| Energy sales (MWh) | 340,721 | 368,323 |
Cooling Services
| YEAR-END 9/30 | FY2023 | FY2022 |
|---|---|---|
| Demand rate ($/ton/mo) | $32.08 | $30.85 |
| Energy charge ($/ton-hour) | 0.110 | 0.097 |
| Overall rate ($/ton-hour, 1200 Util hrs) | $0.431 | $0.406 |
| Demand (tons) | 26,408 | 26,549 |
| Energy sales (ton-hours) | 37,864,246 | 37,733,214 |
Revenues & Expenses
Operating REvenues
| YEAR-END 9/30 | FY2023 | FY2022 |
|---|---|---|
| Operating Revenues | $39,875,590 | $39,132,279 |
Operating Expenses
| YEAR-END 9/30 | FY2023 | FY2022 |
|---|---|---|
| Fuel and energy | $15,423,719 | $15,188,184 |
| Non-fuel operating expenses | 14,124,078 | $13,367,097 |
| Total operating expenses | 29,547,797 | $28,555,281 |
| Operating Income Before Depreciation | $10,327,793 | $10,576,998 |
Board of Directors
Heidi Conrad, Chairperson
Chief Financial Officer, University of Wisconsin-Madison’s School of Medicine & Public Health
Ken Peterson, Vice Chairperson
Attorney and former Commissioner, MN Department of Labor and Industry
Beverly Jones Heydinger
Retired Chair, Minnesota Public Utilities Commission
Heide Kempf-Schwarze
Senior Property Manager, Unilev Management Corporation
Eric Krause
Director of Facilities, Allina Health, large-sized customer representative
Kelly Lange
Enterprise Procurement Director, Securian Financial, medium-sized customer representative
Pat Wolf
President, Commercial Real Estate Services,
small-sized customer representative
David Ybarra
President, Minnesota Pipe Trades Association
Ken Smith, Ex Officio
President & CEO, District Energy St. Paul