In a recent government meeting, officials outlined the budgetary expectations and operational strategies for Duluth Energy Systems for the upcoming year, emphasizing a projected revenue of $11 million for 2025 and a total appropriation of just under $16 million. Key discussions centered around energy costs, particularly the anticipated increase in natural gas prices, which have been lower than budgeted in the past year. As a result, energy rates are expected to rise modestly, with a 4.1% overall increase anticipated due to a 4.9% rise in consumption charges and a 3.5% increase in capacity charges.

The meeting also highlighted the ongoing transition from coal to natural gas as the primary energy source, with a significant reduction in coal consumption reported—down to just 250 tons in 2024, a 98% decrease since 2012. This shift has contributed to a 20% reduction in greenhouse gas emissions. Officials are actively pursuing alternatives to fossil fuels, including waste heat recovery and electrification strategies, as part of their commitment to sustainability.

Additionally, the Canal Park hot water system, a legacy infrastructure established two decades ago, will see a 10% rate increase as part of efforts to align its pricing with other energy services. Meanwhile, the chilled water system, which has served several downtown buildings, is being phased out due to its inefficiency and the expiration of contracts.

Looking ahead, Duluth Energy Systems plans to continue expanding its hot water network, which currently supplies 35% of downtown energy needs, and is exploring options for carbon reduction strategies, including potential federal grants. The meeting concluded with a commitment to further engage with community projects, such as the Lincoln Park initiative, to enhance energy recovery efforts.