Roughly a week before Minneapolis officials hold public hearings about the concept of forming city-owned electric and gas utilities, a community environmental group said Tuesday that it has reached an agreement with CenterPoint Energy to collaborate on energy initiatives.

And as a result, the group is asking the city to exclude Houston-based CenterPoint if it adds a November ballot measure about so-called “municipalization.”

As Twin Cities Business reported earlier this week, the Minneapolis City Council will hold public hearings on August 1 to discuss the concept of forming municipal gas and electric utilities—a move that would involve severing ties with longtime partners CenterPoint and Minneapolis-based Xcel Energy, Inc.

The meetings have been described as an important step toward adding a municipalization measure to the November ballot.

The City of Minneapolis signed its latest “franchise agreements” with Xcel and CenterPoint in the early 1990s, and both contracts are set to expire at the end of 2014. Under such agreements, the companies pay the city “franchise fees.”

Part of the city’s challenge is finding the most cost-efficient way to meet its goal of reducing citywide greenhouse gas emissions by 15 percent by 2015 (and 30 percent by 2025), using 2006 as a baseline.

A community group called Minneapolis Energy Options had pushed the city to explore municipalization and previously described the upcoming public hearings as “the first step toward addressing rising energy costs and moving Minneapolis’ energy forward.”

The group said late Tuesday, however, that it reached an agreement with CenterPoint, and it no longer supports including the company on the ballot.

CenterPoint, which supplies natural gas to 125,000 Minneapolis customers, has agreed to consider new programs, such as “expanding residential efficiency offerings, helping multifamily building owners save energy, and furthering renewable energy technologies,” the company said in a statement. It also said it will support diversity programs that provide youth and adult job training.

Dylan Kesti, Minneapolis Energy Options’ campaign coordinator, told Twin Cities Business in a Wednesday phone interview that his group would be willing to hold discussions with Xcel, but it currently supports adding a ballot measure involving a municipal electric utility.

Laura McCarten, a regional vice president for Xcel, told Twin Cities Business on Wednesday that the City Council (rather than a community group) has the ultimate say over what appears on a ballot. And Xcel’s main focus is on talking with the city about how to best help it achieve its energy goals.

“We need to find a way to sit down and work with the city and not have this divisive municipalization ballot measure out there,” as it takes away resources that would be better used finding a solution with Xcel, she added.

McCarten said Xcel doesn’t believe there’s a problem to be fixed. For example, she said that the company’s 2012 carbon dioxide emissions were 22 percent lower than in 2005, and once three new wind projects come on line in 2016, they’ll reduce emissions by another 5 percent—which aligns with the city’s goals.

McCarten also pointed out that, while Xcel’s franchise agreement with the city is set to expire at the end of next year, such agreements do not dictate which utilities serve which communities; rather, state law does. In other words, even if the franchise deal expired, Xcel would continue serving the city unless Minneapolis took the formal step of creating its own municipal utility.