HF 2253

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; amending provisions regarding community-based energy
development projects; regulating utility ownership and cost recovery for
renewable energy projects; requiring Public Utilities Commission to establish
policy regarding curtailment payments; regulating green pricing programs;
requiring studies of potential for dispersed generation projects; extending
expiration of reliability administrator position and transferring the position from
Public Utilities Commission to Department of Commerce; limiting the length of
wind easements if a project is not constructed; requiring reliability administrator
to study need for and authority of state electric transmission authority and of
enhancing ease of interconnecting dispersed generation projects to the grid;
specifying aggregation procedures for purposes of permitting wind projects;
allowing counties to issue permits for large wind energy conversion systems;
removing sunset for renewable energy option program for utility customers;
amending Minnesota Statutes 2006, sections 216B.1612; 216B.1645, by adding
subdivisions; 216B.169; 216B.2426; 216C.052; 500.30, subdivision 2; proposing
coding for new law in Minnesota Statutes, chapters 216B; 216F; repealing Laws
2007, chapter 3, section 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 216B.1612, is amended to read:

216B.1612 COMMUNITY-BASED ENERGY DEVELOPMENT; TARIFF.

Subdivision 1.

Tariff establishment.

A tariff shall be established to optimize local,
regional, and state benefits from deleted text begin wind deleted text end new text begin renewable new text end energy development and to facilitate
widespread development of community-based deleted text begin wind deleted text end new text begin renewable new text end energy projects throughout
Minnesota.

Subd. 2.

Definitions.

(a) The terms used in this section have the meanings given
them in this subdivision.

(b) "C-BED tariff" or "tariff" means a community-based energy development tariff.

(c) "Qualifying owner" means:

(1) a Minnesota resident;

(2) a limited liability company that is organized under the laws of this state and that
is made up of members who are Minnesota residents;

(3) a Minnesota nonprofit organization organized under chapter 317A;

(4) a Minnesota cooperative association organized under chapter 308A or 308B,
other than a rural electric cooperative association or a generation and transmission
cooperative;

(5) a Minnesota political subdivision or local government other than a municipal
electric utility or municipal power agency, including, but not limited to, a county, statutory
or home rule charter city, town, school district, or public or private higher education
institution or any other local or regional governmental organization such as a board,
commission, or association; or

(6) a tribal council.

(d) deleted text begin "Net present value rate" means a rate equal to the net present value of the
nominal payments to a project divided by the total expected energy production of the
project over the life of its power purchase agreement. deleted text end new text begin "Renewable" means a technology
listed in section 216B.1691, subdivision 1, paragraph (a).
new text end

(e) "Standard reliability criteria" means:

(1) can be safely integrated into and operated within the utility's grid without causing
any adverse or unsafe consequences; and

(2) is consistent with the utility's resource needs as identified in its most recent
resource plan submitted under section 216B.2422.

(f) "Community-based energy new text begin development new text end project" or "C-BED project" means a
new deleted text begin wind deleted text end new text begin renewable new text end energy project that:

(1) deleted text begin has no single qualifying owner owning more than 15 percent of a C-BED project
that consists of more than two turbines; or
deleted text end

deleted text begin (2) for C-BED projects of one or two turbines, deleted text end is owned entirely by one or more
qualifying owners, deleted text begin with deleted text end new text begin except that, in addition, for a wind energy project consisting of
more than one or two turbines, no single qualifying owner may own more than 15 percent
of the project;
new text end

new text begin (2) provides that new text end at least 51 percent of the total financial benefits over the life of
the project deleted text begin flowing deleted text end new text begin , consisting of payments made under a power purchase agreement
or similar arrangement with a utility, easement payments to landowners, taxes, and
interest paid on project debt, is paid new text end to qualifying owners new text begin , local units of government,
and Minnesota financial institutions new text end ; and

(3) has a resolution of support adopted by the county board of each county in which
the project is to be located, or in the case of a project located within the boundaries of a
reservation, the tribal council for that reservation.

Subd. 3.

Tariff rate.

(a) The tariff described in subdivision 4 must deleted text begin have a rate
schedule that allows for a rate up to a 2.7 cents per kilowatt-hour net present value rate
over the 20-year life of the power purchase agreement. The tariff must deleted text end provide for a rate
that is higher in the first ten years of the power purchase agreement than in the last ten
years. deleted text begin The discount rate required to calculate the net present value must be the utility's
normal discount rate used for its other business purposes.
deleted text end

(b) The commission shall consider mechanisms to encourage the aggregation
of C-BED projects.

(c) The commission shall require that qualifying new text begin and nonqualifying new text end owners provide
sufficient security to secure performance under the power purchase agreement, and shall
prohibit the transfer of the C-BED project to a nonqualifying owner during the initial
20 years of the contract.

Subd. 4.

Utilities to offer tariff.

By December 1, deleted text begin 2005 deleted text end new text begin 2007 new text end , each public utility
providing electric service at retail shall file for commission approval a community-based
energy development tariff consistent with subdivision 3. Within 90 days of the
first commission approval order under this subdivision, each municipal power
agency and generation and transmission cooperative electric association shall adopt a
community-based energy development tariff as consistent as possible with subdivision 3.

Subd. 5.

Priority for C-BED projects.

(a) A utility subject to section 216B.1691
that needs to construct new generation, or purchase the output from new generation, as
part of its plan to satisfy its good faith objective new text begin and standard new text end under that section deleted text begin should deleted text end new text begin
must new text end take reasonable steps to determine if one or more C-BED projects are available that
meet the utility's cost and reliability requirements, applying standard reliability criteria, to
fulfill some or all of the identified need at minimal impact to customer rates.

deleted text begin Nothing in this section shall be construed to obligate a utility to enter into a power
purchase agreement under a C-BED tariff developed under this section.
deleted text end

(b) Each utility shall include in its resource plan submitted under section 216B.2422
a description of its efforts to purchase energy from C-BED projects, including a list of the
projects under contract and the amount of C-BED energy purchased.

(c) The commission shall consider the efforts and activities of a utility to purchase
energy from C-BED projects when evaluating its good faith effort towards meeting the
renewable energy objective under section 216B.1691.

new text begin (d) A utility may not own a non-C-BED renewable energy project, nor enter into
a contract with an independent power producer to purchase power from a non-C-BED
renewable energy project unless it has made a good-faith effort to identify and negotiate
with owners of C-BED projects.
new text end

new text begin (e) Before issuing a request for proposals for eligible energy projects to satisfy
its standard obligation under section 216B.1691, a municipal power agency or a
generation and transmission cooperative must offer its member distribution utilities an
opportunity to supply that energy through a partnership with a community-based energy
development project or to enter into a power purchase agreement to purchase energy from
a community-based energy development project.
new text end

Subd. 6.

Property owner participation.

To the extent feasible, a developer of a
C-BED project must provide, in writing, an opportunity to invest in the C-BED project to
each property owner on whose property a high-voltage transmission line is constructed
that will transmit the energy generated by the C-BED project to market. This subdivision
applies if the property is located and the owner resides in the county where the C-BED
project is located.

Subd. 7.

Other C-BED tariff issues.

(a) A community-based project developer
and a utility shall negotiate the rate and power purchase agreement terms consistent with
the tariff established under subdivision 4.

(b) At the discretion of the developer, a community-based project developer and
a utility may negotiate a power purchase agreement with terms different from the tariff
established under subdivision 4.

(c) A qualifying owner, or any combination of qualifying owners, may develop a
joint venture project with a nonqualifying deleted text begin wind deleted text end new text begin renewable new text end energy project developer.
However, the terms of the C-BED tariff may only apply to the portion of the energy
production of the total project that is directly proportional to the equity share of the project
owned by the qualifying owners.

(d) A project that is operating under a power purchase agreement under a C-BED
tariff is not eligible for net energy billing under section 216B.164, subdivision 3, or for
production incentives under section 216C.41.

(e) A public utility must receive commission approval of a power purchase
agreement for a C-BED tariffed project. The commission shall provide the utility's
ratepayers an opportunity to address the reasonableness of the proposed power purchase
agreement. Unless a party objects to a contract within 30 days of submission of the
contract to the commission the contract is deemed approved.

new text begin Subd. 8. new text end

new text begin Community energy partnerships. new text end

new text begin A utility providing electric service
to retail or wholesale customers in Minnesota and an independent power producer may
participate, and is encouraged to participate, in a community-based energy development
project, as owner, equity partner, or provider of technical or financial assistance, subject to
the limits specified in this section.
new text end

Sec. 2.

Minnesota Statutes 2006, section 216B.1645, is amended by adding a
subdivision to read:

new text begin Subd. 2a. new text end

new text begin Utility ownership of renewable resources. new text end

new text begin (a) A utility may construct,
own, and operate generation facilities used to satisfy the requirements of section
216B.1691, notwithstanding any competitive resource acquisition process established
under section 216B.2422, subdivision 5.
new text end

new text begin (b) In lieu of any competitive resource acquisition process, a utility that intends to
construct, own, or operate facilities under this section must file with the commission
on or before March 1, 2008, a renewable energy plan setting forth the manner in
which the utility proposes to meet the requirements of section 216B.1691, including
the proposed schedule of acquisition and construction of generation facilities and their
expected in-service dates, and the proposed transmission resources associated with the
facilities, including a proposed construction schedule and expected in-service date for any
transmission sources that need to be constructed to deliver the electricity generated by the
facilities. The plan must also contain alternative means of providing the energy generated
by the facilities described in the plan, and must compare the costs of delivering energy
from these alternative means and from the facilities identified in the plan. The utility must
update the plan as necessary in its filing under section 216B.2422.
new text end

new text begin (c) The commission must approve the plan unless it determines, after public hearing
and comment, that the plan:
new text end

new text begin (1) imposes excessive costs on ratepayers;
new text end

new text begin (2) does not reasonably allocate resources among utility-owned generation facilities,
community-based energy projects, and generation facilities selected in a competitive
selection process under section 216B.2422, subdivision 5; or
new text end

new text begin (3) does not meet the requirements of section 216B.1612, subdivision 5.
new text end

new text begin Nothing in this section prohibits a utility from seeking and securing approval from the
commission to implement projects before submitting the plan required under this section.
new text end

Sec. 3.

Minnesota Statutes 2006, section 216B.1645, is amended by adding a
subdivision to read:

new text begin Subd. 2b. new text end

new text begin Cost recovery for owned renewable facilities. new text end

new text begin (a) A utility may petition
the commission to approve a rate schedule that provides for the automatic adjustment of
charges to recover prudently incurred investments, expenses, or costs associated with
facilities constructed, owned, or operated by a utility to satisfy the requirements of section
216B.1691, provided those facilities were previously approved by the commission under
section 216B.2422 or 216B.243. The commission may approve, or approve as modified, a
rate schedule that:
new text end

new text begin (1) allows a utility to recover directly from customers on a timely basis the costs of
qualifying renewable energy projects, including:
new text end

new text begin (i) return on investment;
new text end

new text begin (ii) depreciation;
new text end

new text begin (iii) ongoing operation and maintenance costs;
new text end

new text begin (iv) taxes; and
new text end

new text begin (v) costs of transmission and other ancillary expenses directly allocable to
transmitting electricity generated from a project meeting the specifications of this
paragraph;
new text end

new text begin (2) provides a current return on construction work in progress, provided that recovery
of these costs from Minnesota ratepayers is not sought through any other mechanism;
new text end

new text begin (3) allows recovery of other expenses incurred that are directly related to a renewable
energy project, provided that the utility demonstrates to the commission's satisfaction that
the expenses improve project economics, ensure project implementation, or facilitate
coordination with the development of transmission necessary to transport energy produced
by the project to market;
new text end

new text begin (4) allocates recoverable costs appropriately between wholesale and retail customers;
new text end

new text begin (5) recovers costs from retail customer classes in proportion to class energy
consumption; and
new text end

new text begin (6) terminates recovery when costs have been fully recovered or have otherwise
been reflected in a utility's rates.
new text end

new text begin (b) A petition filed under this subdivision must include:
new text end

new text begin (1) a description of the facilities for which costs are to be recovered;
new text end

new text begin (2) an implementation schedule for the facilities;
new text end

new text begin (3) the utility's costs for the facilities;
new text end

new text begin (4) a description of the utility's efforts to ensure that costs of the facilities are
reasonable and were prudently incurred; and
new text end

new text begin (5) a description of the benefits of the project in promoting the development of
renewable energy in a manner consistent with this chapter.
new text end

Sec. 4.

new text begin [216B.1681] CURTAILMENT PAYMENTS.
new text end

new text begin The commission shall, by order, establish a uniform policy with regard to curtailment
payments for wind and solar energy. The policy developed must treat all ownership
structures of generating facilities similarly, and must be incorporated into each power
purchase agreement entered into by a utility after the date of enactment of this section.
new text end

Sec. 5.

Minnesota Statutes 2006, section 216B.169, is amended to read:

216B.169 deleted text begin RENEWABLE AND HIGH-EFFICIENCY ENERGY RATE
OPTIONS deleted text end new text begin COMMUNITY-BASED ENERGY DEVELOPMENT GREEN PRICING
OPTION new text end .

Subdivision 1.

Definitions.

For the purposes of this section, the following terms
have the meanings given them.

(a) "Utility" means a public utility, municipal utility, or cooperative electric
association providing electric service at retail to Minnesota consumers.

(b) deleted text begin "Renewable energy" has the meaning given in section 216B.2422, subdivision 1,
paragraph (c). deleted text end new text begin "Eligible energy technology" has the meaning given in section 216B.1691,
subdivision 1. new text end

(c) deleted text begin "High-efficiency, low-emissions, distributed generation" means a distributed
generation facility of no more than ten megawatts of interconnected capacity that is
certified by the commissioner under subdivision 3 as a high-efficiency, low-emissions
facility. deleted text end new text begin "Community-based energy development project" or "C-BED project" has the
meaning given in section 216B.1612, subdivision 2, paragraph (f).
new text end

Subd. 2.

deleted text begin Renewable and high-efficiency energy rate options deleted text end new text begin C-BED green
pricing programs new text end .

(a) Each utility shall offer its customers, and shall advertise
the offer at least deleted text begin annually deleted text end new text begin quarterly new text end , one or more options that allow a customer to
determine that a certain amount of the electricity generated or purchased on behalf of the
customer is deleted text begin renewable energy or deleted text end energy generated by deleted text begin high-efficiency, low-emissions,
distributed generation such as fuel cells and microturbines fueled by a renewable fuel deleted text end new text begin a
community-based energy development project using an eligible energy technology new text end .

(b) Each public utility shall file an implementation plan within 90 days of July 1,
deleted text begin 2001 deleted text end new text begin 2007 new text end , to implement paragraph (a).

(c) Rates charged to customers must be calculated using the utility's cost of acquiring
the energy for the customer and must:

(1) reflect the difference between the cost of generating or purchasing the deleted text begin renewable deleted text end new text begin
C-BED new text end energy and the cost of generating or purchasing the same amount of deleted text begin nonrenewable deleted text end
energy new text begin from non-C-BED sources new text end ; and

(2) be distributed on a per kilowatt-hour basis among all customers who choose to
participate in the program.

(d) Implementation of these rate options may reflect a reasonable amount of lead
time necessary to arrange acquisition of the energy. The utility deleted text begin may deleted text end new text begin must new text end acquire the
energy demanded by customers, in whole or in part, through procuring or generating deleted text begin the
renewable deleted text end new text begin C-BED new text end energy deleted text begin directly, or through the purchase of credits from a provider that
has received certification of eligible power supply pursuant to subdivision 3 deleted text end . If a utility is
not able to arrange an adequate supply of deleted text begin renewable or high-efficiency deleted text end new text begin C-BED new text end energy
to meet its customers' demand under this section, the utility must file a report with the
commission detailing its efforts and reasons for its failure.

Subd. 3.

Certification deleted text begin and tradeable credits deleted text end .

deleted text begin (a) deleted text end The commissioner shall certify a
power supply or supplies as eligible to satisfy customer requirements under this section
upon finding:

(1) the power supply deleted text begin is renewable energy or energy generated by high-efficiency,
low-emissions, distributed generation deleted text end new text begin meets the requirements of section 216B.1612 new text end ; and

(2) the sales arrangements of energy from the supplies are such that the power
supply is only sold once to retail consumers.

deleted text begin (b) To facilitate compliance with this section, the commission may, by order,
establish a program for tradeable credits for eligible power supplies.
deleted text end

new text begin Subd. 4. new text end

new text begin C-BED logo. new text end

new text begin (a) The commissioner of commerce shall design or contract
for the design of a logo that qualifying entities may affix to their products and to advertising
for their products that contains the words "C-BED: 100% Minnesota Renewable Energy."
The logo may also contain a standardized pictorial representation or design.
new text end

new text begin (b) The commissioner of commerce shall certify in writing that an entity is
authorized to use the logo if the commissioner determines that all the electricity consumed
by an applicant is purchased from a C-BED project. The commissioner shall develop
forms and procedures to govern the application and certification processes and the use
of the logo by an entity that receives certification. No person may use the logo without
certification from the commissioner.
new text end

new text begin (c) For the purposes of this subdivision, "qualifying entity" means a person or entity
that has received certification from the commissioner granting the entity authority to use
the C-BED logo in the manner prescribed by the commissioner.
new text end

Sec. 6.

Minnesota Statutes 2006, section 216B.2426, is amended to read:

216B.2426 OPPORTUNITIES FOR DISTRIBUTED new text begin AND DISPERSED
new text end GENERATION.

The commission shall ensure that opportunities for the installation of distributed
generation, as that term is defined in section 216B.169, subdivision 1, paragraph (c),
new text begin and dispersed generation new text end are considered in any proceeding under section 216B.2422,
216B.2425, or 216B.243 new text begin , and may, by order, establish standards and procedures to comply
with this subdivision. For purposes of this section, "dispersed generation" means an
electric generation project of between ten and 40 megawatts of capacity that utilizes an
eligible energy technology, as defined in section 216B.1691, subdivision 1, paragraph (a) new text end .

Sec. 7.

Minnesota Statutes 2006, section 216C.052, is amended to read:

216C.052 RELIABILITY ADMINISTRATOR.

Subdivision 1.

Responsibilities.

(a) There is established the position of reliability
administrator in the deleted text begin Public Utilities Commission deleted text end new text begin Department of Commerce new text end . The
administrator shall act as a source of independent expertise and a technical advisor to
new text begin the commissioner of commerce, new text end the commission and the public on issues related to the
reliability of the electric system. In conducting its work, the administrator shall deleted text begin provide
assistance to the commission in administering and implementing the commission's duties
under sections 216B.2422, 216B.2425, and 216B.243; chapters 216E, 216F, and 216G;
and rules associated with those provisions. Subject to resource constraints, the reliability
administrator may also deleted text end :

(1) model and monitor the use and operation of the energy infrastructure in the
state, including generation facilities, transmission lines, natural gas pipelines, and other
energy infrastructure;

(2) develop and present to the commission and parties technical analyses of proposed
infrastructure projects, and provide technical advice to the commission; new text begin and
new text end

(3) present independent, factual, expert, and technical information on infrastructure
proposals and reliability issues at public meetings hosted by the task force, the
Environmental Quality Board, the department, or the commission.

(b) Upon request and subject to resource constraints, the administrator shall
provide technical assistance regarding matters unrelated to applications for infrastructure
improvements to the task force, the department, or the commission.

(c) The administrator may not advocate for any particular outcome in a commission
proceeding, but may give technical advice to the commission as to the impact on the
reliability of the energy system of a particular project or projects.

Subd. 2.

Administrative issues.

(a) The deleted text begin commission deleted text end new text begin commissioner new text end may select
the administrator who shall serve for a four-year term. The administrator may not have
been a party or a participant in a commission energy proceeding for at least one year
prior to selection by the deleted text begin commission deleted text end new text begin commissioner new text end . The deleted text begin commission deleted text end new text begin commissioner new text end
shall oversee and direct the work of the administrator, annually review the expenses of
the administrator, and annually approve the budget of the administrator. deleted text begin Pursuant to
commission approval, deleted text end The administrator may hire staff and may contract for technical
expertise in performing duties when existing state resources are required for other state
responsibilities or when special expertise is required. The salary of the administrator is
governed by section 15A.0815, subdivision 2.

(b) Costs relating to a specific proceeding, analysis, or project are not general
administrative costs. For purposes of this section, "energy utility" means public utilities,
generation and transmission cooperative electric associations, and municipal power
agencies providing natural gas or electric service in the state.

(c) The deleted text begin commission deleted text end new text begin Department of Commerce new text end shall pay:

(1) the general administrative costs of the administrator, not to exceed $1,000,000 in
a fiscal year, and shall assess energy utilities for those administrative costs. These costs
must be consistent with the budget approved by the deleted text begin commission deleted text end new text begin commissioner new text end under
paragraph (a). The deleted text begin commission deleted text end new text begin department new text end shall apportion the costs among all energy
utilities in proportion to their respective gross operating revenues from sales of gas or
electric service within the state during the last calendar year, and shall then render a
bill to each utility on a regular basis; and

(2) costs relating to a specific proceeding analysis or project and shall render a bill to
the specific energy utility or utilities participating in the proceeding, analysis, or project
directly, either at the conclusion of a particular proceeding, analysis, or project, or from
time to time during the course of the proceeding, analysis, or project.

(d) For purposes of administrative efficiency, the deleted text begin commission deleted text end new text begin department new text end shall
assess energy utilities and issue bills in accordance with the billing and assessment
procedures provided in section 216B.62, to the extent that these procedures do not
conflict with this subdivision. The amount of the bills rendered by the deleted text begin commission deleted text end new text begin
department new text end under paragraph (c) must be paid by the energy utility into an account in the
special revenue fund in the state treasury within 30 days from the date of billing and is
appropriated to the deleted text begin commission deleted text end new text begin department new text end for the purposes provided in this section.
The commission shall approve or approve as modified a rate schedule providing for the
automatic adjustment of charges to recover amounts paid by utilities under this section.
All amounts assessed under this section are in addition to amounts appropriated to the
commission new text begin and the department new text end by other law.

Subd. 3.

Assessment and appropriation.

In addition to the amount noted in
subdivision 2, the deleted text begin commission deleted text end new text begin commissioner new text end may assess utilities, using the mechanism
specified in that subdivision, up to an additional $500,000 annually through June 30,
2008. The amounts assessed under this subdivision are appropriated to the deleted text begin commission deleted text end new text begin
commissioner new text end , and some or all of the amounts assessed may be transferred to the
commissioner of administration, for the purposes specified in section 16B.325 and Laws
2001, chapter 212, article 1, section 3, as needed to implement those sections.

Subd. 4.

Expiration.

Subdivisions 1 and 2 expire June 30, deleted text begin 2007 deleted text end new text begin 2012 new text end . Subdivision
3 expires June 30, 2008.

Sec. 8.

new text begin [216F.011] SIZE DETERMINATION.
new text end

new text begin (a) The total size of a combination of wind energy conversion systems for the
purpose of determining jurisdictional siting authority under sections 216F.01 to 216F.07
must be determined according to this section. The nameplate capacity of one wind energy
conversion system must be combined with the nameplate capacity of any other wind
energy conversion system that is:
new text end

new text begin (1) located within five miles of the wind energy conversion system;
new text end

new text begin (2) constructed within the same 12-month period as the wind energy conversion
system; and
new text end

new text begin (3) exhibits characteristics of being a single development, including but not
limited to ownership structure, an umbrella sales arrangement, shared interconnection,
revenue-sharing arrangements, and common debt or equity financing.
new text end

new text begin (b) The commissioner shall prepare and make available the necessary forms and
guidance for project developers to make a request for determination. Upon written
request of a project developer, the commissioner of commerce shall provide a written
determination under this section within 30 days of receipt of the request and information
necessary to make a determination. In the case of a dispute, the chair of the Public Utilities
Commission shall determine the total size of the system, and shall draw all reasonable
inferences in favor of combining the systems.
new text end

new text begin (c) An application to a county for a permit for a wind energy conversion system is
not complete without a jurisdictional determination made under this section.
new text end

Sec. 9.

new text begin [216F.08] PERMIT AUTHORITY; ASSUMPTION BY COUNTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For the purposes of this subdivision, the term
"processing" means:
new text end

new text begin (1) the distribution to applicants of application and determination forms provided
by the commission;
new text end

new text begin (2) the receipt and examination of completed application forms, and the certification,
in writing, to the commission either that the LWECS for which a permit was issued by the
county will comply with applicable rules and standards or, if the facility will not comply,
the respects in which a variance is required for the issuance of a permit; and
new text end

new text begin (3) rendering to applicants, upon request, assistance for the proper completion of
an application.
new text end

new text begin Subd. 2. new text end

new text begin Counties; processing applications for LWECS site permits. new text end

new text begin (a) Any
Minnesota county board may, by resolution and upon written notice to the commission,
assume responsibility for processing applications for permits required under this chapter
for LWECS with a combined nameplate capacity of less than 25 megawatts. The
responsibility for permit application processing, if assumed by a county, may be delegated
by the county board to an appropriate county officer or employee. Processing by a county
must be done in accordance with procedures and processes established under chapter 394.
new text end

new text begin (b) A county board that exercises its option under paragraph (a) and assumes
responsibility for processing applications for permits for LWECS within its borders
is responsible for issuing, denying, modifying, imposing conditions upon, or revoking
permits under this section or rules adopted pursuant to it. The action of the county board
with regard to a permit application is final, subject to appeal as provided in section 394.27.
new text end

new text begin (c) In adopting and enforcing rules or standards under this subdivision, the
commission shall cooperate closely with counties and other governmental agencies.
new text end

new text begin (d) The commission shall work with counties and wind developers to notify and
educate stakeholders with regard to rules or standards under this section at the time the
rules or standards are being developed and adopted and at least every two years thereafter.
new text end

new text begin (e) The commission shall, by order, establish general permit standards governing site
permits for LWECS under this section. These general permit standards must apply both to
permits issued by counties and to permits issued by the commission directly for LWECS
with a combined nameplate capacity of less than 25 megawatts. The order must contain
minimum standards necessary to ensure the protection of human health and safety and
wind resources on adjacent land and must be consistent with the general provisions of wind
permits issued by the commission in the five years before the effective date of this section.
new text end

new text begin (f) The commission and the commissioner of commerce shall provide technical
assistance to a county with respect to the processing of LWECS site permit applications
by the county.
new text end

new text begin (g) A county may adopt by ordinance standards for LWECS that are more stringent
than standards in commission rules or in the commission's permit standards. The
commission, in considering a permit for LWECS in a county that has adopted more
stringent standards, shall incorporate and apply those more stringent standards, unless the
commission finds there is good cause not to do so.
new text end

Sec. 10.

Minnesota Statutes 2006, section 500.30, subdivision 2, is amended to read:

Subd. 2.

Like any conveyance.

Any property owner may grant a solar or wind
easement in the same manner and with the same effect as a conveyance of an interest in
real property. The easements shall be created in writing and shall be filed, duly recorded,
and indexed in the office of the recorder of the county in which the easement is granted.
No duly recorded easement shall be unenforceable on account of lack of privity of estate or
privity of contract; such easements shall run with the land or lands benefited and burdened
and shall constitute a perpetual easement, except that an easement may terminate new text begin (1) new text end upon
the conditions stated therein deleted text begin or deleted text end new text begin , (2) new text end pursuant to the provisions of section 500.20 new text begin , or (3) in
the case of a wind easement, if a wind energy project on the property to which the easement
applies does not begin commercial operation within five years after the easement is
created. Clause (3) applies only to easements created after the effective date of this section new text end .

Sec. 11. new text begin STATEWIDE STUDY OF DISPERSED GENERATION POTENTIAL.
new text end

new text begin Subdivision 1. new text end

new text begin Study participants. new text end

new text begin Each electric utility subject to Minnesota
Statutes, section 216B.1691, must participate collaboratively in conducting a two-phase
study of the potential for dispersed generation projects that can be developed in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin First phase study content; report. new text end

new text begin In the first phase of the study,
participants must analyze the impacts of the addition of 600 megawatts of new dispersed
generation projects distributed among the following Minnesota electric transmission
planning zones: the Northeast zone, the Northwest zone, the Southeast zone, the Southwest
zone and the West-central zone. Study participants must use a generally accepted 2010
year transmission system model including all transmission facilities expected to be
operating in 2010. The study must take into consideration regional projected load growth,
planned changes in the bulk transmission network, and the long-range transmission
conceptual plan being developed under Laws 2007, chapter 3, section 2. In determining
locations for the installation of dispersed generation projects that consist of wind energy
conversion systems, the study should consider, at a minimum, wind resource availability,
existing and contracted wind projects, and current dispersed generation projects in the
Midwest Independent System Operator interconnection queue. The study must analyze
the impacts of individual projects and all projects in aggregate on the transmission system,
and identify specific modifications to the transmission system necessary to remedy
any problems caused by the installation of dispersed generation projects, including
cost estimates for the modifications. The study must analyze the additional dispersed
generation projects connected at the lowest voltage level transmission that exists in the
vicinity of the projected generation sites. A preliminary analysis to identify transmission
system problems must be conducted with the projects installed at initially selected
locations. The technical review committee may, after reviewing the locations selected
for installation, recommend moving the installation sites to new locations to reduce
undesirable transmission system impacts. The commissioner of commerce must submit a
report containing the findings and recommendations of the first phase of the study to the
Public Utilities Commission no later than June 15, 2008.
new text end

new text begin Subd. 3. new text end

new text begin Second phase study content; report. new text end

new text begin In the second phase of the study,
participants must analyze the impacts of an additional 600 megawatts of dispersed
generation projects installed among the five transmission planning zones, or a higher total
capacity amount if agreed to by both the utilities and the technical review committee. The
utilities must employ an analysis method similar to that used in the first phase of the study,
and must use the most recent information available, including information developed in
the first phase. The second phase of the study must use a generally accepted 2013 year
transmission system model including all transmission facilities that are expected to be
in-service at that time. The commissioner of commerce must submit a report containing
the findings and recommendations of the second phase of the study to the commission no
later than September 15, 2009.
new text end

new text begin Subd. 4. new text end

new text begin Technical review committee. new text end

new text begin Before the start of the first phase of
the study, the commissioner of commerce must appoint a technical review committee
consisting of between ten and 15 individuals with experience and expertise in electric
transmission system engineering, renewable energy generation technology, and dispersed
generation project development, including representatives from the federal Department
of Energy, the Midwest Independent System Operator, and stakeholder interests. The
technical review committee must oversee both phases of the study, and must:
new text end

new text begin (1) make recommendations to the utilities regarding the proposed methods and
assumptions to be used in the technical study;
new text end

new text begin (2) in conjunction with the appropriate utilities, hold public meetings on each phase
of the study in each electricity transmission planning zone before the beginning of each
phase of study, after the impact analysis is completed, and when a draft final report is
available; and
new text end

new text begin (3) review the initial and final drafts of the study and make recommendations for
improvement, including with respect to problems associated with the interconnections
among utility systems that may be amenable to solution through cooperation between the
utilities in each zone. During each phase of the study, the technical review committee
may recommend that the installation of dispersed generation projects be moved to new
locations that cause fewer undesirable transmission system impacts.
new text end

new text begin Subd. 5. new text end

new text begin Inclusion in biennial transmission report. new text end

new text begin Beginning in 2009, each utility
submitting a biennial transmission report under Minnesota Statutes, section 216B.2425,
must address in the report steps taken to facilitate locating dispersed generation projects
in its service area.
new text end

Sec. 12. new text begin TRANSFERRING RELIABILITY ADMINISTRATOR
RESPONSIBILITIES.
new text end

new text begin All responsibilities, as defined in Minnesota Statutes, section 15.039, subdivision
1, held by the Public Utilities Commission relating to the reliability administrator under
Minnesota Statutes, section 216C.052, are transferred to the Minnesota Department of
Commerce under Minnesota Statutes, section 15.039.
new text end

Sec. 13. new text begin TRANSMISSION AUTHORITY AND INTERCONNECTION
STUDIES.
new text end

new text begin Subdivision 1. new text end

new text begin State transmission authority study. new text end

new text begin From the money available
to the commissioner of commerce for purposes of studies and technical assistance by
the reliability administrator under Minnesota Statutes, section 216C.052, the reliability
administrator shall conduct a study of the need for, and potential authorities of, a new
state agency to plan, finance, construct, own, maintain, and operate electric transmission
lines in Minnesota and other states. The study must consider the need for additional
electric transmission in Minnesota over the next 20 years and the state's commitment to
accelerating the development of renewable sources of electric generation, as specified in
Minnesota Statutes, section 216B.1691, as well as the difficulties of building transmission
lines that have resulted from the decoupling of generation and transmission functions. The
study must examine the powers of similar agencies in other states, including Kansas, North
Dakota, South Dakota, and Wyoming, and their operations to date, and must evaluate
whether the existence of a similar organization in Minnesota would have the potential to
increase the reliability of the electrical grid in the state, hasten the development of needed
transmission lines, accelerate the development of renewable energy projects, especially
in rural areas of the state, and reduce costs to Minnesota ratepayers. The reliability
administrator must report the study's findings and recommendations to the chairs of the
senate and house of representatives committees with jurisdiction over energy policy by
February 15, 2008. No more than $....... may be expended on the study.
new text end

new text begin Subd. 2. new text end

new text begin Dispersed generation interconnection study. new text end

new text begin From the money available
to the commissioner of commerce for purposes of studies and technical assistance by
the reliability administrator under Minnesota Statutes, section 216C.052, the reliability
administrator must conduct a study identifying administrative procedures that ensure
efficient, effective, and coordinated action between state authority for interconnecting
dispersed generation projects to locations on Minnesota's retail load serving power
system at interconnection voltages less than 100 kilovolts and the Midwest Independent
System Operator's authority with respect to interconnections at voltages in excess of 100
kilovolts. The study must identify changes, including, but not limited to, standardized
application forms and interconnection agreements for dispersed generation projects,
that may expedite interconnection. The reliability administrator must report the study's
findings and recommendations to the chairs of the senate and house of representatives
committees with jurisdiction over energy policy by February 15, 2008. No more than
$....... may be expended on the study. For the purposes of this subdivision, "dispersed
generation project" means an electric generation project with a capacity of 25 megawatts
or less that utilizes an eligible energy technology as defined in Minnesota Statutes, section
216B.1691, subdivision 1, paragraph (a).
new text end

Sec. 14. new text begin REPEALER.
new text end

new text begin Laws 2007, chapter 3, section 3, new text end new text begin is repealed.
new text end