St. Cloud seeks $3.5 million RDA appropriation for battery to enable green hydrogen demonstration

The City of St. Cloud asked a House committee to lay over House File 2,366 after city officials and energy advocates described a project to produce green hydrogen at the city's wastewater treatment facility and requested a $3,500,000 RDA appropriation for a battery system and microgrid controller.

Tracy Hodel, public services director for the City of St. Cloud, said the project has been in development for three years and that an electrolyzer ordered for the site is expected to be delivered in the fall. Hodel said the facility already has multiple renewable-energy components, including four solar arrays and combined heat-and-power engines that run on biogas recovered on site.

Hodel told the committee that planned controls intended to limit power sent back to the grid can no longer be extended by the utility to meet the project's needs because of local grid capacity constraints; the proposed battery and microgrid controller would allow the city to store and dispatch on-site renewable energy for continuous electrolyzer operation. She asked the committee for $3,500,000 from the RDA account to pay for the battery system and controller, calling it the "missing piece" to keep the project moving rather than waiting years for utility upgrades.

Fresh Energy's Margaret Cherny Hendrick testified in support, saying St. Cloud's project fits Fresh Energy's criteria for green hydrogen production at sites where production and consumption are co-located. Hodel said off-takers and partners have expressed interest in the hydrogen: she mentioned Metro Transit as a potential user for hydrogen buses and local companies that could use hydrogen or associated products.

Committee members asked about the city's utility partner, grid-study costs, and alternatives. Hodel said the local utility is Xcel Energy; she said a utility study to evaluate feeder upgrades would cost an estimated $60,000 to $90,000 and that required distribution upgrades could be "multiple millions" and would be the city's responsibility if pursued. Hodel said the battery solution would let the project produce hydrogen at scale sooner and the battery could later help with grid modernization and load control if the facility connects to the grid.

Testimony described the project as a first-of-its-kind demonstration using electrolyzer outputs (hydrogen, oxygen and waste heat) and said it would reduce natural-gas use on-site by utilizing waste heat. Hodel said the city is about 30% through detailed design on remaining components and that, without the battery funding, the project might have to pause or operate at limited capacity, affecting off-takers.

The committee adopted the motion to lay House File 2,366 over for possible inclusion. No final appropriation was enacted by the committee during the hearing.