HF 3640

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 03/22/2010 10:18am

A bill for an act
relating to energy; allowing for advance determination of prudence determination
by Public Utilities Commission for certain environmental projects of a public
utility; proposing coding for new law in Minnesota Statutes, chapter 216B.

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

Section 1.

new text begin [216B.1695] ENVIRONMENTAL PROJECTS; ADVANCE
DETERMINATION OF PRUDENCE.
new text end

new text begin Subdivision 1. new text end

new text begin Qualifying project. new text end

new text begin A public utility may petition the commission for
an advance determination of prudence for a project undertaken to comply with federal
or state air quality standards of states in which the utility's electric generation facilities
are located, if the project has an expected jurisdictional cost to Minnesota ratepayers of
at least $10,000,000. A project is undertaken to comply with federal or state air quality
standards if it is required:
new text end

new text begin (1) by the state in which the generation facility is located in a state implementation
plan, permit, or order; or
new text end

new text begin (2) to comply with section 111 or 112 of the federal Clean Air Act, United States
Code, title 42, section 7411 or 7412.
new text end

new text begin Subd. 2. new text end

new text begin Regulatory cost assessments and reports. new text end

new text begin A utility requesting an advance
determination under subdivision 1 must, as part of the evidence required when filing a
petition under subdivision 3, provide to the commission and the Pollution Control Agency
an assessment of all anticipated state and federal environmental regulations related to
the production of electricity from the utility's facility subject to the filing, including
regulations relating to:
new text end

new text begin (1) air pollution by nitrogen oxide and sulfur dioxide, including an assumption that
Minnesota will be included in the federal Clean Air Interstate Rule region, hazardous air
pollutants, carbon dioxide, particulates, and ozone;
new text end

new text begin (2) coal waste; and
new text end

new text begin (3) water consumption and water pollution.
new text end

new text begin In addition, the utility shall provide an assessment of the financial and operational
impacts of these pending regulations applicable to the generating facility that is subject
to the filing and analyze a range of regulatory response scenarios that include, but are
not limited to:
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new text begin (1) the installation of pollution control equipment;
new text end

new text begin (2) the benefits of the retirement or repowering of the plant that is the subject of
the filing with cleaner fuels considering the costs of complying with state and federal
environmental regulations; and
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new text begin (3) the use of pollution allowances to achieve compliance.
new text end

new text begin The utility shall consult with interested stakeholders in establishing the scope of the
regulatory, financial, and operational assessments prior to or during the 60-day period of
the notice under subdivision 4.
new text end

new text begin Subd. 3. new text end

new text begin Petition. new text end

new text begin A petition filed under this section must include a description of
the project, evidence supporting the project's reasonableness, a discussion of project
alternatives, a project implementation schedule, a cost estimate and support for the
reasonableness of the estimated cost, and a description of the public utility's efforts to
ensure the lowest reasonable costs. Following receipt of the Pollution Control Agency's
verification under subdivision 4, the commission shall allow opportunity for oral and
written comment on the petition. The commission shall make a final determination on
the petition within ten months of its filing date. The commission must make findings
in support of its determination.
new text end

new text begin Subd. 4. new text end

new text begin Verification. new text end

new text begin At least 60 days prior to filing a petition to the commission
under subdivision 3, the utility shall file notice with the Pollution Control Agency that
describes the project and how it qualifies under subdivision 1. The Pollution Control
Agency shall, within 60 days of receipt of the notice, verify that the project qualifies under
subdivision 1, and shall forward written verification to the commission.
new text end

new text begin Subd. 5. new text end

new text begin Cost recovery. new text end

new text begin The utility may begin recovery of costs that have been
incurred by the utility in connection with implementation of the project in the next rate
case following an advance determination of prudence. The commission shall review the
costs incurred by the utility for the project. The utility must show that the project costs
are reasonable and necessary, and demonstrate its efforts to ensure the lowest reasonable
project costs. Notwithstanding the commission's prior determination of prudence, it may
accept, modify, or reject any of the project costs. The commission may determine whether
to require an allowance for funds used during construction offset.
new text end

new text begin Subd. 6. new text end

new text begin Expiration. new text end

new text begin A petition for an advance determination of prudence may not
be filed after December 31, 2015.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end