Minnesota Legislature
HF 1189
as introduced - 87th Legislature (2011 - 2012) Posted on 03/17/2011 09:50am
Current Version - as introduced
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A bill for an act
relating to energy; modifying provisions related to exemptions from conservation
improvement programs; amending Minnesota Statutes 2010, sections 216B.2401;
216B.241, subdivisions 1, 1a, 1b, 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2010, section 216B.2401, is amended to read:
216B.2401 ENERGY CONSERVATION POLICY GOAL.
It is the energy policy of the state of Minnesota to achieve annual energy savings
equal to 1.5 percent of annual retail energy sales of electricity and natural gas directly
throughnew text begin customer-initiated conservation activities,new text end energy conservation improvement
programs and rate design, such as inverted block rates in which lower energy prices
are made available to lower-usage residential customers, and indirectly through energy
codes and appliance standards, programs designed to transform the market or change
consumer behavior, energy savings resulting from efficiency improvements to the utility
infrastructure and system, and other efforts to promote energy efficiency and energy
conservation.
Sec. 2.
Minnesota Statutes 2010, section 216B.241, subdivision 1, is amended to read:
Subdivision 1.
Definitions.
For purposes of this section and section 216B.16,
subdivision 6b, the terms defined in this subdivision have the meanings given them.
(a) "Commission" means the Public Utilities Commission.
(b) "Commissioner" means the commissioner of commerce.
(c) "Customer facility" means all buildings, structures, equipment, and installations
at a single site.
(d) "Department" means the Department of Commerce.
(e) "Energy conservation" means demand-side management of energy supplies
resulting in a net reduction in energy use. Load management that reduces overall energy
use is energy conservation.
(f) "Energy conservation improvement" means a project that results in energy
efficiency or energy conservation. Energy conservation improvement may include waste
heat recovery converted into electricity but does not include electric utility infrastructure
projects approved by the commission under section 216B.1636.
(g) "Energy efficiency" means measures or programs, including energy conservation
measures or programs, that target consumer behavior, equipment, processes, or devices
designed to produce either an absolute decrease in consumption of electric energy or
natural gas or a decrease in consumption of electric energy or natural gas on a per unit
of production basis without a reduction in the quality or level of service provided to
the energy consumer.
(h) "Gross annual retail energy sales" means annual electric sales to all retail
customers in a utility's or association's Minnesota service territory or natural gas
throughput to all retail customers, including natural gas transportation customers, on a
utility's distribution system in Minnesota. For purposes of this section, gross annual retail
energy sales exclude gas sales to a large energy facility and gas and electric sales to a
large deleted text begin electricdeleted text end new text begin energynew text end customer deleted text begin facilitydeleted text end exempted deleted text begin by the commissionerdeleted text end under subdivision
1a, paragraph (b).
(i) "Investments and expenses of a public utility" includes the investments and
expenses incurred by a public utility in connection with an energy conservation
improvement, including but not limited to:
(1) the differential in interest cost between the market rate and the rate charged on a
no-interest or below-market interest loan made by a public utility to a customer for the
purchase or installation of an energy conservation improvement;
(2) the difference between the utility's cost of purchase or installation of energy
conservation improvements and any price charged by a public utility to a customer for
such improvements.
(j) "Large deleted text begin electricdeleted text end new text begin energynew text end customer deleted text begin facilitydeleted text end " means a customer new text begin with a new text end facilitynew text begin or
facilitiesnew text end that deleted text begin imposesdeleted text end new text begin imposenew text end a peak electrical demand on an electric utility's system of
not less than deleted text begin 20,000deleted text end new text begin 10,000new text end kilowatts, measured in the same way as the utility that serves
the customer facilitynew text begin or facilitiesnew text end measures electrical demand for billing purposesdeleted text begin , and for
which electric services are provided at retail on a single bill by a utility operating in the
statedeleted text end new text begin or a customer with a facility or facilities that consume a peak gas demand on a gas
utility's system of not less than 500,000 dekatherms annual consumptionnew text end .
(k) "Large energy facility" has the meaning given it in section 216B.2421,
subdivision 2, clause (1).
(l) "Load management" means an activity, service, or technology to change the
timing or the efficiency of a customer's use of energy that allows a utility or a customer to
respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.
(m) "Low-income programs" means energy conservation improvement programs
that directly serve the needs of low-income persons, including low-income renters.
(n) "Waste heat recovery converted into electricity" means an energy recovery
process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
for engines or manufacturing or industrial processes, or the reduction of high pressure
in water or gas pipelines.
Sec. 3.
Minnesota Statutes 2010, section 216B.241, subdivision 1a, is amended to read:
Subd. 1a.
Investment, expenditure, and contribution; public utility.
(a) For
purposes of this subdivision and subdivision 2, "public utility" has the meaning given it
in section 216B.02, subdivision 4. Each public utility shall spend and invest for energy
conservation improvements under this subdivision and subdivision 2 the following
amounts:
(1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
from service provided in the state;
(2) for a utility that furnishes electric service, 1.5 percent of its gross operating
revenues from service provided in the state; and
(3) for a utility that furnishes electric service and that operates a nuclear-powered
electric generating plant within the state, two percent of its gross operating revenues
from service provided in the state.
For purposes of this paragraph (a), "gross operating revenues" do not include revenues
from large deleted text begin electric customer facilitiesdeleted text end new text begin energy customersnew text end exempted deleted text begin by the commissionerdeleted text end
under paragraph (b).
(b) deleted text begin The owner of deleted text end A large deleted text begin electricdeleted text end new text begin energynew text end customer deleted text begin facilitydeleted text end may deleted text begin petitiondeleted text end new text begin file withnew text end the
commissioner to exempt both electric and gas utilities serving the large energy customer
deleted text begin facilitydeleted text end from the investment and expenditure requirements of paragraph (a) with respect
to retail revenues attributable to the deleted text begin facilitydeleted text end new text begin customernew text end . deleted text begin At a minimum,deleted text end The deleted text begin petition must
be supported by evidence relating todeleted text end new text begin filing must include a discussion of thenew text end competitive
or economic pressures on the customer and deleted text begin a showing by the customer of reasonabledeleted text end new text begin
of thenew text end effortsnew text begin taken by the customernew text end to identify, evaluate, and implement cost-effective
conservation improvements deleted text begin at the facilitydeleted text end . deleted text begin If a petition is filed on or before October 1 of
any year, the order of the commissioner to exempt revenues attributable to the facility can
be effective no earlier than January 1 of the following year. The commissioner shall not
grant an exemption if the commissioner determines that granting the exemption is contrary
to the public interest. The commissioner may, after investigation, rescind any exemption
granted under this paragraph upon a determination that the customer is not continuing
to make reasonable efforts to identify, evaluate, and implement energy conservation
improvements at the large electric customer facility. For the purposes of investigations by
the commissioner under this paragraph, the owner of any large electric customer facility
shall, upon request, provide the commissioner with updated information comparable to that
originally supplied in or with the owner's original petition under this paragraph.deleted text end new text begin Any such
filing must be approved and become effective January 1 of the year following the filing. A
large energy customer that is exempt from the investment and expenditure requirements of
paragraph (a) under an order from the commissioner issued before the effective date of this
section does not need to resubmit a petition to retain its exempt status. No exempt large
energy customer may participate in a utility conservation improvement program unless the
large energy customer files with the commissioner to withdraw its exemption.
new text end
(c) The commissioner may require investments or spending greater than the amounts
required under this subdivision for a public utility whose most recent advance forecast
required under section 216B.2422 or 216C.17 projects a peak demand deficit of 100
megawatts or greater within five years under midrange forecast assumptions.
(d) A public utility deleted text begin or owner of a large electric customer facilitydeleted text end may appeal
a decision of the commissioner under paragraph deleted text begin (b) ordeleted text end (c) to the commission under
subdivision 2. In reviewing a decision of the commissioner under paragraph deleted text begin (b) ordeleted text end (c),
the commission shall rescind the decision if it finds that the required investments or
spending will:
(1) not result in cost-effective energy conservation improvements; or
(2) otherwise not be in the public interest.
Sec. 4.
Minnesota Statutes 2010, section 216B.241, subdivision 1b, is amended to read:
Subd. 1b.
Conservation improvement by cooperative association or
municipality.
(a) This subdivision applies to:
(1) a cooperative electric association that provides retail service to its members;
(2) a municipality that provides electric service to retail customers; and
(3) a municipality with more than 1,000,000,000 cubic feet in annual throughput
sales to natural gas to retail customers.
(b) Each cooperative electric association and municipality subject to this subdivision
shall spend and invest for energy conservation improvements under this subdivision
the following amounts:
(1) for a municipality, 0.5 percent of its gross operating revenues from the sale of
gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding
gross operating revenues from electric and gas service provided in the state to large
electric customer facilities; and
(2) for a cooperative electric association, 1.5 percent of its gross operating revenues
from service provided in the state, excluding gross operating revenues from service
provided in the state to large electric customer facilities indirectly through a distribution
cooperative electric association.
(c) Each municipality and cooperative electric association subject to this subdivision
shall identify and implement energy conservation improvement spending and investments
that are appropriate for the municipality or association, except that a municipality or
association may not spend or invest for energy conservation improvements that directly
benefit a large energy facility or a large deleted text begin electricdeleted text end new text begin new text end new text begin energynew text end customer deleted text begin facility for which the
commissioner has issued an exemptiondeleted text end new text begin exemptednew text end under subdivision 1a, paragraph (b).
(d) Each municipality and cooperative electric association subject to this subdivision
may spend and invest annually up to ten percent of the total amount required to be spent
and invested on energy conservation improvements under this subdivision on research
and development projects that meet the definition of energy conservation improvement
in subdivision 1 and that are funded directly by the municipality or cooperative electric
association.
(e) Load-management activities may be used to meet 50 percent of the conservation
investment and spending requirements of this subdivision.
(f) A generation and transmission cooperative electric association that provides
energy services to cooperative electric associations that provide electric service at retail to
consumers may invest in energy conservation improvements on behalf of the associations
it serves and may fulfill the conservation, spending, reporting, and energy-savings goals on
an aggregate basis. A municipal power agency or other not-for-profit entity that provides
energy service to municipal utilities that provide electric service at retail may invest in
energy conservation improvements on behalf of the municipal utilities it serves and may
fulfill the conservation, spending, reporting, and energy-savings goals on an aggregate
basis, under an agreement between the municipal power agency or not-for-profit entity
and each municipal utility for funding the investments.
(g) Each municipality or cooperative shall file energy conservation improvement
plans by June 1 on a schedule determined by order of the commissioner, but at least every
three years. Plans received by June 1 must be approved or approved as modified by the
commissioner by December 1 of the same year. The municipality or cooperative shall
provide an evaluation to the commissioner detailing its energy conservation improvement
spending and investments for the previous period. The evaluation must briefly describe
each conservation program and must specify the energy savings or increased efficiency in
the use of energy within the service territory of the utility or association that is the result of
the spending and investments. The evaluation must analyze the cost-effectiveness of the
utility's or association's conservation programs, using a list of baseline energy and capacity
savings assumptions developed in consultation with the department. The commissioner
shall review each evaluation and make recommendations, where appropriate, to the
municipality or association to increase the effectiveness of conservation improvement
activities.
(h) A municipality may spend up to 50 percent of its required spending under this
section to refurbish an existing district heating or cooling system until July 1, 2007. From
July 1, 2007, through June 30, 2011, expenditures made to refurbish a district heating or
cooling system are considered to be load-management activities under paragraph (e). This
paragraph expires July 1, 2011.
(i) The commissioner shall consider and may require a utility, association, or
other entity providing energy efficiency and conservation services under this section to
undertake a program suggested by an outside source, including a political subdivision,
nonprofit corporation, or community organization.
Sec. 5.
Minnesota Statutes 2010, section 216B.241, subdivision 2, is amended to read:
Subd. 2.
Programs.
(a) The commissioner may require public utilities to make
investments and expenditures in energy conservation improvements, explicitly setting
forth the interest rates, prices, and terms under which the improvements must be offered to
the customers. The required programs must cover no more than a three-year period. Public
utilities shall file conservation improvement plans by June 1, on a schedule determined by
order of the commissioner, but at least every three years. Plans received by a public utility
by June 1 must be approved or approved as modified by the commissioner by December
1 of that same year. The commissioner shall evaluate the program on the basis of
cost-effectiveness and the reliability of technologies employed. The commissioner's order
must provide to the extent practicable for a free choice, by consumers participating in the
program, of the device, method, material, or project constituting the energy conservation
improvement and for a free choice of the seller, installer, or contractor of the energy
conservation improvement, provided that the device, method, material, or project seller,
installer, or contractor is duly licensed, certified, approved, or qualified, including under
the residential conservation services program, where applicable.
(b) The commissioner may require a utility to make an energy conservation
improvement investment or expenditure whenever the commissioner finds that the
improvement will result in energy savings at a total cost to the utility less than the cost
to the utility to produce or purchase an equivalent amount of new supply of energy. The
commissioner shall nevertheless ensure that every public utility operate one or more
programs under periodic review by the department.
(c) Each public utility subject to subdivision 1a may spend and invest annually up to
ten percent of the total amount required to be spent and invested on energy conservation
improvements under this section by the utility on research and development projects
that meet the definition of energy conservation improvement in subdivision 1 and that
are funded directly by the public utility.
(d) A public utility may not spend for or invest in energy conservation improvements
that directly benefit a large energy facility or a large deleted text begin electricdeleted text end new text begin energynew text end customer deleted text begin facility for
which the commissioner has issued an exemptiondeleted text end new text begin exemptednew text end pursuant to subdivision 1a,
paragraph (b). The commissioner shall consider and may require a utility to undertake
a program suggested by an outside source, including a political subdivision, a nonprofit
corporation, or community organization.
(e) A utility, a political subdivision, or a nonprofit or community organization
that has suggested a program, the attorney general acting on behalf of consumers and
small business interests, or a utility customer that has suggested a program and is not
represented by the attorney general under section 8.33 may petition the commission to
modify or revoke a department decision under this section, and the commission may do
so if it determines that the program is not cost-effective, does not adequately address the
residential conservation improvement needs of low-income persons, has a long-range
negative effect on one or more classes of customers, or is otherwise not in the public
interest. The commission shall reject a petition that, on its face, fails to make a reasonable
argument that a program is not in the public interest.
(f) The commissioner may order a public utility to include, with the filing of the
utility's proposed conservation improvement plan under paragraph (a), the results of an
independent audit of the utility's conservation improvement programs and expenditures
performed by the department or an auditor with experience in the provision of energy
conservation and energy efficiency services approved by the commissioner and chosen by
the utility. The audit must specify the energy savings or increased efficiency in the use
of energy within the service territory of the utility that is the result of the spending and
investments. The audit must evaluate the cost-effectiveness of the utility's conservation
programs.