HF 1038

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 02/16/2017 03:47pm

A bill for an act
relating to energy; establishing an energy fund account and related requirements;
establishing a legislative council to make funding recommendations to the
legislature; amending Minnesota Statutes 2016, section 116C.779, subdivision 1,
by adding a subdivision; proposing coding for new law in Minnesota Statutes,
chapter 116C.

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

Section 1.

Minnesota Statutes 2016, section 116C.779, subdivision 1, is amended to read:

Subdivision 1.

deleted text begin Renewable development deleted text end new text begin Energy fund new text end account.

(a) new text begin The energy fund
account is established as a separate account in the special revenue fund in the state treasury.
Appropriations and transfers to the account are credited to the account. Earnings, such as
interest, dividends, and any other earnings arising from assets of the account, are credited
to the account. Funds remaining in the account at the end of a fiscal year do not cancel to
the general fund, but remain in the account until expended.
new text end

new text begin (b) On July 1, 2017, the public utility that owns the Prairie Island nuclear generating
plant must transfer all funds in the renewable development account previously established
under this subdivision and managed by the public utility to the energy fund account
established in paragraph (a). Funds awarded to grantees in previous grant cycles that have
not yet been expended and unencumbered funds required to be paid in calendar year 2017
under sections 116C.7791, 116C.7792, and 216C.41 are not subject to transfer under this
paragraph.
new text end

new text begin (c) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing
each January 15 thereafter, new text end the public utility that owns the Prairie Island nuclear generating
plant must transfer to deleted text begin a renewable development deleted text end new text begin the energy fund new text end account $500,000 each
year for each dry cask containing spent fuel that is located at the Prairie Island power plant
for each year the plant is in operation, and $7,500,000 each year the plant is not in operation
if ordered by the commission pursuant to paragraph deleted text begin (c) deleted text end new text begin (f) new text end . The fund transfer must be made
if nuclear waste is stored in a dry cask at the independent spent-fuel storage facility at Prairie
Island for any part of a year.

deleted text begin (b) deleted text end new text begin (d) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing
each January 15 thereafter, new text end the public utility that owns the Monticello nuclear generating
plant must transfer to the deleted text begin renewable development deleted text end new text begin energy fund new text end account $350,000 each year
for each dry cask containing spent fuel that is located at the Monticello nuclear power plant
for each year the plant is in operation, and $5,250,000 each year the plant is not in operation
if ordered by the commission pursuant to paragraph deleted text begin (c) deleted text end new text begin (f) new text end . The fund transfer must be made
if nuclear waste is stored in a dry cask at the independent spent-fuel storage facility at
Monticello for any part of a year.

new text begin (e) Each year, the public utility must withhold from the funds transferred to the energy
fund account under paragraphs (c) and (d) the amount necessary to pay its obligations under
sections 116C.7791, 116C.7792, and 216C.41 for that calendar year.
new text end

deleted text begin (c) deleted text end new text begin (f) new text end After discontinuation of operation of the Prairie Island nuclear plant or the
Monticello nuclear plant and each year spent nuclear fuel is stored in dry cask at the
discontinued facility, the commission shall require the public utility to pay $7,500,000 for
the discontinued Prairie Island facility and $5,250,000 for the discontinued Monticello
facility for any year in which the commission finds, by the preponderance of the evidence,
that the public utility did not make a good faith effort to remove the spent nuclear fuel stored
at the facility to a permanent or interim storage site out of the state. This determination shall
be made at least every two years.

new text begin (g) Funds in the account may only be expended to support the expansion of:
new text end

new text begin (1) electric energy generated from solar, wind, or biomass resources;
new text end

new text begin (2) heat energy from solar thermal or geothermal projects;
new text end

new text begin (3) energy efficiency;
new text end

new text begin (4) motor vehicles fueled by sources other than gasoline or diesel fuel; or
new text end

new text begin (5) energy storage.
new text end

new text begin Except as provided in section 116C.7793, subdivision 7, expenditures from the fund must
only benefit ratepayers receiving electric service from the utility that owns a nuclear powered
electric generating plant in this state.
new text end

deleted text begin (d) Funds in the account may be expended only for any of the following purposes:
deleted text end

deleted text begin (1) to increase the market penetration within the state of renewable electric energy
resources at reasonable costs;
deleted text end

deleted text begin (2) to promote the start-up, expansion, and attraction of renewable electric energy projects
and companies within the state;
deleted text end

deleted text begin (3) to stimulate research and development within the state into renewable electric energy
technologies; and
deleted text end

deleted text begin (4) to develop near-commercial and demonstration scale renewable electric projects or
near-commercial and demonstration scale electric infrastructure delivery projects if those
delivery projects enhance the delivery of renewable electric energy.
deleted text end

deleted text begin The utility that owns a nuclear generating plant is eligible to apply for renewable development
account grants.
deleted text end

deleted text begin (e) Expenditures authorized by this subdivision from the account may be made only
after approval by order of the Public Utilities Commission upon a petition by the public
utility. The commission may approve proposed expenditures, may disapprove proposed
expenditures that it finds to be not in compliance with this subdivision or otherwise not in
the public interest, and may, if agreed to by the public utility, modify proposed expenditures.
The commission may approve reasonable and necessary expenditures for administering the
account in an amount not to exceed five percent of expenditures. Commission approval is
not required for expenditures required under subdivisions 2 and 3, section 116C.7791, or
other law.
deleted text end

deleted text begin (f) The account shall be managed by the public utility but the public utility must consult
about account expenditures with an advisory group that includes, among others,
representatives of its ratepayers. The commission may require that other interests be
represented on the advisory group. The advisory group must be consulted with respect to
the general scope of expenditures in designing a request for proposal and in evaluating
projects submitted in response to a request for proposals. In addition to consulting with the
advisory group, the public utility must utilize an independent third-party expert to evaluate
proposals submitted in response to a request for proposal, including all proposals made by
deleted text end deleted text begin the public utility. A request for proposal for research and development under paragraph (d),
clause (3), may be limited to or include a request to higher education institutions located in
Minnesota for multiple projects authorized under paragraph (d), clause (3). The request for
multiple projects may include a provision that exempts the projects from the third-party
expert review and instead provides for project evaluation and selection by a merit peer
review grant system. The utility should attempt to reach agreement with the advisory group
after consulting with it but the utility has full and sole authority to determine which
expenditures shall be submitted to the commission for commission approval. In the process
of determining request for proposal scope and subject and in evaluating responses to request
for proposals, the public utility must strongly consider, where reasonable, potential benefit
to Minnesota citizens and businesses and the utility's ratepayers.
deleted text end

deleted text begin (g) Funds in the account may not be directly appropriated by the legislature by a law
enacted after January 1, 2012, and unless appropriated by a law enacted prior to that date
may be expended only pursuant to an order of the commission according to this subdivision.
deleted text end

deleted text begin (h) A request for proposal for renewable energy generation projects must, when feasible
and reasonable, give preference to projects that are most cost-effective for a particular energy
source.
deleted text end

deleted text begin (i) The public utility must annually, by February 15, report to the chairs and ranking
minority members of the legislative committees with jurisdiction over energy policy on
projects funded by the account for the prior year and all previous years. The report must,
to the extent possible and reasonable, itemize the actual and projected financial benefit to
the public utility's ratepayers of each project.
deleted text end

deleted text begin (j) A project receiving funds from the account must produce a written final report that
includes sufficient detail for technical readers and a clearly written summary for nontechnical
readers. The report must include an evaluation of the project's financial, environmental, and
other benefits to the state and the public utility's ratepayers.
deleted text end

deleted text begin (k) Final reports, any mid-project status reports, and renewable development account
financial reports must be posted online on a public Web site designated by the commission.
deleted text end

deleted text begin (l) All final reports must acknowledge that the project was made possible in whole or
part by the Minnesota renewable development fund, noting that the fund is financed by the
public utility's ratepayers.
deleted 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

Sec. 2.

Minnesota Statutes 2016, section 116C.779, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Payment termination. new text end

new text begin (a) The commissioner shall track the cumulative
transfers made to the account and its predecessor, the renewable development account, each
year since 1999 for each dry cask containing spent fuel that is stored at an independent
spent-fuel storage facility at Prairie Island or Monticello. During the time when state law
required the public utility to transfer a specific amount of funds to the account for all the
casks stored, the per-cask allocation shall be calculated by dividing the total amount
transferred by the number of casks stored that year.
new text end

new text begin (b) When the commissioner determines that the cumulative transfers calculated under
paragraph (a) for a specific cask reach $10,000,000, the commissioner shall notify the public
utility that no additional transfers to the account for that cask shall be made.
new text end

new text begin (c) This subdivision does not affect any provisions of subdivision 1, paragraph (c) or
(d), with respect to transfers to the account made after a plant has ceased operation.
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

Sec. 3.

new text begin [116C.7793] LEGISLATIVE RENEWABLE ENERGY COUNCIL.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin (a) The Legislative Renewable Energy Council of 11
members is established in the legislative branch, consisting of:
new text end

new text begin (1) five members of the house of representatives appointed by the speaker of the house,
three of whom are from the majority caucus and two of whom are from the minority caucus;
and
new text end

new text begin (2) five members of the senate appointed by the Subcommittee on Committees of the
Committee on Rules and Administration, three of whom are from the majority caucus and
two of whom are from the minority caucus; and
new text end

new text begin (3) one representative of the Prairie Island Indian Community appointed by that
community's tribal council.
new text end

new text begin (b) Eight legislative members appointed to the council must represent legislative districts
in which at least 60 percent of residents receive electric service from the utility that owns
a nuclear powered electric generating plant in this state. No member may be appointed to
the council from a legislative district that does not contain any electric retail customers of
the utility that owns a nuclear powered electric generating plant in this state. Council
members must be geographically balanced to represent the entire electric service area of
that utility.
new text end

new text begin (c) Council members shall elect a chair, a vice-chair, and other officers as determined
by the council. The chair may convene meetings as necessary to conduct the duties prescribed
by this section.
new text end

new text begin (d) The Legislative Coordinating Commission may appoint nonpartisan staff and contract
with consultants as necessary to support the functions of the council. The council has final
approval authority to hire an executive director. Up to one-half of one percent of the money
appropriated from the fund may be used to pay for the council's administrative expenses.
new text end

new text begin Subd. 2. new text end

new text begin Council recommendations. new text end

new text begin (a) The council must make recommendations to
the legislature on appropriations from the energy fund account established under section
116C.779 that are consistent with that section and state law. The council's recommendations
must be submitted no later than December 15 each year. The council must present its
recommendations to the senate and house of representatives committees with jurisdiction
over energy policy and finance by February 15 in odd-numbered years, and within the first
four weeks of the legislative session in even-numbered years.
new text end

new text begin (b) Recommendations of the council, including approval of recommendations for
expenditures from the energy fund account, require an affirmative vote of at least eight
members of the council.
new text end

new text begin (c) The council must develop and implement a decision-making process that ensures
citizens and potential recipients of funds are included at each stage of the process. The
process must include a fair, equitable, and thorough method to review funding requests,
and a clear and easily understood process to rank projects.
new text end

new text begin Subd. 3. new text end

new text begin Conflict of interest. new text end

new text begin (a) A council member may not be an advocate for or
against a council action or vote on any action that may be a conflict of interest. A conflict
of interest must be disclosed as soon as it is discovered. The council must follow the policies
and requirements related to conflicts of interest developed by the Office of Grants
Management under section 16B.98.
new text end

new text begin (b) For the purposes of this section, a conflict of interest exists when a person has an
organizational conflict of interest or a direct financial conflict of interest, and the conflict
of interest presents the appearance that it will be difficult for the person to impartially fulfill
the person's duties as a member of the council. An organizational conflict of interest exists
when a person has an affiliation with an organization subject to council activities that presents
the appearance of a conflict between organizational interests and the council member's
duties under this section. An organizational conflict of interest does not exist if the person's
only affiliation with an organization is being a member of the organization.
new text end

new text begin Subd. 4. new text end

new text begin Audit. new text end

new text begin The legislative auditor must audit energy fund account expenditures
recommended by the council, including administrative and staffing expenditures, to ensure
the money is spent in compliance with all applicable laws.
new text end

new text begin Subd. 5. new text end

new text begin Recipient requirements. new text end

new text begin (a) A recipient of a direct appropriation from the
energy fund account recommended by the council must compile and submit all information
for funded projects or programs, including proposed measurable outcomes required by the
council.
new text end

new text begin (b) A recipient's future eligibility to receive funds from the energy fund account is
contingent upon the recipient satisfying all applicable requirements under this section, as
well as any additional requirements contained in applicable law. If the Office of the
Legislative Auditor, in the course of an audit or investigation, publicly reports that a recipient
of funds from the energy fund account has not complied with the laws, rules, or regulations
under this section or other laws applicable to the recipient, the recipient is not eligible for
future funding from the energy fund account until the recipient demonstrates compliance
to the legislative auditor.
new text end

new text begin (c) A recipient of a direct appropriation from the energy fund account pursuant to a
recommendation by the council may not receive funds from another direct appropriation
from the council until four years after completion of the project funded by the prior direct
appropriation.
new text end

new text begin Subd. 6. new text end

new text begin Accomplishment plans. new text end

new text begin As a condition of accepting funds appropriated from
the energy fund account on the council's recommendation, a recipient must agree to submit
an accomplishment plan and periodic accomplishment reports to the council in the form
determined by the council. The accomplishment plan must identify the project manager
responsible for expending the appropriation and the final product. The accomplishment plan
must account for the use of the appropriation, identify outcomes of the expenditure, and
include an evaluation of results.
new text end

new text begin Subd. 7. new text end

new text begin Expenditures. new text end

new text begin (a) The council's recommendations regarding expenditures from
the energy fund account may include but are not limited to research and development
projects, demonstration projects, and statewide programs and financial incentives.
new text end

new text begin (b) If general fund money is transferred to the energy fund account, the council may
recommend the expenditure of, and the legislature may appropriate, funds from the account
up to the amount of general fund money present in the account for purposes that do not
exclusively benefit ratepayers receiving electric service from the utility that owns a nuclear
powered generating plant in this state.
new text end

new text begin Subd. 8. new text end

new text begin Administration. new text end

new text begin The council shall develop administrative procedures for the
submission and review of proposals seeking funding from the council.
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