CenterPoint Energy has reached an agreement with Dem-Con HZI Bioenergy LLC (DCHZI) to purchase renewable natural gas (RNG) produced from food and yard waste collected in the Twin Cities metro area. The Minnesota-made RNG will connect to CenterPoint’s distribution network in Shakopee by 2027, offering homes and businesses a lower-carbon energy alternative.
RNG is created by recycling organic materials, such as farm byproducts, food scraps, wastewater sludge, and yard clippings, that would otherwise emit methane into the atmosphere. The process produces pipeline-quality gas that can replace conventional natural gas, helping to cut greenhouse gas emissions.
“At CenterPoint energy , we’re excited to invest in innovative efforts such as DCHZI’s renewable natural gas production facility,” said Brad Steber, CenterPoint vice president, Minnesota Gas. “Adding locally produced renewable natural gas to our system can provide customers with a lower carbon energy source while maintaining the safe, reliable service they expect.”
First-of-Its-Kind Waste-to-Energy Facility
The Shakopee facility, supplied and operated by Kanadevia Inova (formerly Hitachi Zosen Inova), will be the first in the nation to combine anaerobic digestion and gasification to produce both RNG and biochar from organic waste. Anaerobic digestion breaks down waste in oxygen-free tanks to produce methane-rich biogas, which is then upgraded to pipeline quality.
Bill Keegan, president of Dem-Con Companies, said the plant will process about 75,000 tons of local organic waste annually, generating enough RNG to heat 2,500 Minnesota homes. The facility is expected to reduce greenhouse gas emissions by approximately 30,000 tons of carbon dioxide equivalents each year.
“This project turns everyday waste into a renewable energy source while delivering measurable climate benefits,” Keegan said. “It’s a model for sustainable waste management and energy production.”
Part of Minnesota’s Natural Gas Innovation Act Plan
Purchasing RNG from DCHZI is a key component of CenterPoint’s five-year innovation plan under Minnesota’s Natural Gas Innovation Act (NGIA). Passed to encourage utilities to invest in renewable and low-carbon energy technologies, the NGIA aims to reduce statewide greenhouse gas emissions.
The Minnesota Public Utilities Commission approved CenterPoint’s energy plan in July 2024. It includes 17 pilot projects and seven research and development initiatives, ranging from RNG and green hydrogen production to networked geothermal and hybrid heating systems.
The utility projects that its NGIA plan will:
- Reduce or avoid an estimated 1.1 million tons of carbon emissions over the lifetime of the projects—equivalent to the annual energy use of about 150,000 homes.
- Create an estimated 3,000 full-time equivalent jobs.
- Increase recycling and waste reduction by converting organic material into renewable energy.
Commitment to Emissions Reductions
CenterPoint energy has set a goal to help residential and commercial customers cut greenhouse gas emissions from natural gas use by 20–30% by 2035, compared to 2021 levels. The company says its innovation plan is designed to give customers access to cleaner energy options without compromising reliability.
“Our customers want affordable, dependable energy that also helps address climate change,” Steber said. “Investments like this RNG project are part of how we’ll deliver on that promise.”
With construction set to begin in the coming years, the Shakopee facility represents a step toward integrating renewable energy into Minnesota’s natural gas supply—while transforming the way organic waste is handled across the metro area.
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