HF 1677

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

A bill for an act
relating to energy; modifying conservation reinvestment program provision
regarding expenditures by existing heating or cooling system; amending
Minnesota Statutes 2006, section 216B.241, subdivision 1b.

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

Section 1.

Minnesota Statutes 2006, 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 gross operating revenues in excess of $5,000,000 from sales
of 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 electric customer facility for which the commissioner has issued an
exemption 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 that do not reduce energy use but that increase the
efficiency of the electric system 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) At least every four years, on a schedule determined by the commissioner, each
municipality or cooperative shall file an overview of its conservation improvement plan
with the commissioner. With this overview, the municipality or cooperative shall also
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. Up to three percent of a utility's conservation spending obligation under this
section may be used for program pre-evaluation, testing, and monitoring and program
evaluation. The overview and evaluation filed by a municipality with less than 60,000,000
kilowatt-hours in annual retail sales of electric service may consist of a letter from the
governing board of the municipal utility to the department providing the amount of annual
conservation spending required of that municipality and certifying that the required
amount has been spent on conservation programs pursuant to this subdivision.

(h) The commissioner shall also review each evaluation for whether a portion of the
money spent on residential conservation improvement programs is devoted to programs
that directly address the needs of renters and low-income persons unless an insufficient
number of appropriate programs are available. For the purposes of this subdivision and
subdivision 2, "low-income" means an income at or below 50 percent of the state median
income.

(i) As part of its spending for conservation improvement, a municipality or
association may contribute to the energy and conservation account. A municipality or
association may propose to the commissioner to designate that all or a portion of funds
contributed to the account be used for research and development projects that can best
be implemented on a statewide basis. Any amount contributed must be remitted to the
commissioner by February 1 of each year.

(j) A municipality may spend up to 50 percent of its required spending under this
section to refurbish an existing district heating or cooling system deleted text begin . This paragraph expires deleted text end new text begin
until new text end July 1, 2007. new text begin From July 1, 2007, through June 30, 2011, expenditures made to
refurbish an existing heating or cooling system are considered to be load-management
activities under paragraph (e). This paragraph expires July 1, 2011.
new text end