HF 2253

1st Engrossment - 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; 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. new text begin CITATION.
new text end

new text begin Sections 1 to 14 may be known as the "Community-Based Energy Development
Act of 2007."
new text end

Sec. 2.

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 deleted text begin the laws of this state deleted text end new text begin chapter
322B new text end 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,
deleted text begin other than deleted text end new text begin including new text end a rural electric cooperative association or a generation and
transmission cooperative new text begin on behalf of and at the request of a member distribution utility new text end ;

(5) a Minnesota political subdivision or local government deleted text begin other than deleted text end new text begin including,
but not limited to, new text end a municipal electric utility or new text begin a new text end municipal power agency new text begin on behalf
of and at the request of a member distribution utility new text end , deleted text begin including, but not limited to, deleted text end 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) "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.

(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) new text begin "Renewable" refers to a technology listed in section 216B.1691, subdivision 1,
paragraph (a).
new text end

new text begin (g) new text end "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:

deleted text begin (1) 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, is owned entirely by one or more
qualifying owners, with at least 51 percent of the total financial benefits over the life of the
project flowing to qualifying owners; and
deleted text end

new text begin (1) provides that at least 51 percent of the total payments made as a direct result of a
power purchase agreement or similar agreement with a utility accrue to:
new text end

new text begin (i) qualifying owners, in the form of net cash payments under the power purchase
agreement that amount to no less than 35 percent made over the term of the power
purchase agreement;
new text end

new text begin (ii) owners of land upon which a project is sited, in the form of easement or lease
payments;
new text end

new text begin (iii) local units of government, in the form of taxes paid under section 272.029; and
new text end

new text begin (iv) lenders chartered under section 46.044, in the form of interest paid on C-BED
project debt financed by a lender;
new text end

new text begin (2) allows, if the project is a wind energy project consisting of more than two
turbines, no single qualifying owner to own more than 15 percent of the project;
new text end

new text begin (3) allows, if the project is a wind energy project, a public entity listed in paragraph
(c), clause (5), except for a municipal utility, to own more than 15 percent of the project;
and
new text end

deleted text begin (3) deleted text end new text begin (4) new text end 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 have a rate
schedule that allows for a deleted text begin rate up to a 2.7 cents per kilowatt-hour deleted text end net present value rate
over the 20-year life of the power purchase agreement. The tariff must provide for a rate
that is higher in the first ten years of the power purchase agreement than in the last ten
years. The discount rate required to calculate the net present value must be the utility's
normal discount rate used for its other business purposes.

(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.

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. new text begin A utility whose
renewable energy plan has been approved by the commission under section 216B.1645,
subdivision 2a, must negotiate in good faith with developers of C-BED projects that meet
the specifications of this paragraph and whose aggregated capacity is equal to the capacity
of C-BED projects identified in the plan from which the utility intends to purchase energy.
new 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 municipal power agency or generation and transmission cooperative must,
when issuing a request for proposals for C-BED projects to satisfy its standard obligation
under section 216B.1691, provide notice to its member distribution utilities that they
may propose, in partnership with other qualifying owners, a C-BED project for the
consideration of the municipal power agency or generation and transmission cooperative.
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 are encouraged to participate, in a community-based energy project, as
owner, equity partner, or provider of technical or financial assistance, subject to the limits
specified in this section.
new text end

new text begin Subd. 9. new text end

new text begin C-BED advisory determination. new text end

new text begin A developer of a proposed project may
request the commissioner of commerce to issue an advisory determination as to whether
the proposed project qualifies as a C-BED project under this section. The request must
be made on a form and under a procedure approved by the commissioner. A positive
advisory determination of the commissioner under this subdivision establishes a rebuttable
presumption that the project qualifies as a C-BED project.
new text end

Sec. 3.

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 owns a
nuclear generation facility and 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 a proposed schedule for purchasing renewable energy from
C-BED and non-C-BED projects, a proposed schedule of acquisition and construction
of generation facilities and their expected in-service dates, and 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,
energy purchased from C-BED and non-C-BED 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 maximize benefits to Minnesota citizens, as required by section
216B.1691, subdivision 9.
new text end

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

Sec. 4.

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) 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. 5.

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

new text begin The commission shall, by September 1, 2007, initiate a review of curtailment
payments for wind energy projects to assess whether utilities are unduly discriminating
among project ownership structures in regard to the contractual availability of curtailment
payments.
new text end

Sec. 6.

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" has the meaning
given in section 216B.1612, subdivision 2, paragraph (g) 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 or is provided through the purchase of
renewable energy credits from a C-BED project 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 new text begin or credits new text end and the cost of generating or purchasing the same amount of
deleted text begin nonrenewable deleted text end energy new text begin or credits 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 directly, or through the purchase of credits deleted text begin from a provider
that has received certification of eligible power supply pursuant to subdivision 3 deleted text end new text begin issued
under the program established by the commission under section 216B.1691, subdivision
4, if available new 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 new text begin or credits new text end 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 "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 must 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 directly, or by purchasing credits from a C-BED project. The
commissioner of commerce must 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 of commerce granting the entity
authority to use the C-BED logo in the manner prescribed by the commissioner.
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, new text end the commission new text begin , new text end and the public on issues related to the reliability of
the electric system. In conducting its work, the administrator shall provide assistance
to the deleted text begin commission deleted text end new text begin commissioner new text end in administering and implementing the deleted text begin commission's deleted text end new text begin
department's new text end duties under sections new text begin 216B.1612, 216B.1691, new text end 216B.2422, 216B.2425, and
216B.243; chapters 216E, 216F, and 216G; and rules associated with those provisions deleted text begin .
Subject to resource constraints, the reliability administrator may also deleted text end new text begin and shall also new 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 deleted text begin who shall serve for a four-year term deleted text end . The administrator new text begin must demonstrate
technical training, expertise, or experience in energy reliability issues, and new text end 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 Public Utilities
Commission, assume responsibility for processing applications for permits required
under this chapter for LWECS with a combined nameplate capacity of less than 25,000
kilowatts. 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 shall 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 25,000 kilowatts. 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 prior to enactment 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 upon the
conditions stated therein or pursuant to the provisions of section 500.20. new text begin A wind easement
or lease of wind rights shall also terminate after five years from the date the easement is
created or lease is entered into, if a wind energy project on the property to which the
easement or lease applies does not begin commercial operation within the five-year period.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to wind easements created and wind rights leases entered into on or 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 Definition. new text end

new text begin "Dispersed generation" means an electric generation
project with a generating capacity between ten and 40 megawatts that utilizes an eligible
energy technology, as defined in Minnesota Statutes, section 216B.1691, subdivision 1,
paragraph (a).
new text end

new text begin Subd. 2. 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. 3. 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 a total 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 commission no later than June 15, 2008.
new text end

new text begin Subd. 4. 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 total of 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. 5. new text end

new text begin Technical review committee. new text end

new text begin Prior to 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 prior to 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

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
EVALUATIONS.
new text end

new text begin The reliability administrator shall, in consultation with interested stakeholders:
new text end

new text begin (1) review the structures, powers, and duties for constructing, owning, maintaining,
and operating transmission facilities of state transmission authorities established in
Kansas, North Dakota, South Dakota, and Wyoming, and evaluate whether the existence
of a similar organization in Minnesota would have the potential to increase the reliability
and efficiency 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 delivered energy costs to Minnesota ratepayers; and
new text end

new text begin (2) assess the potential for and barriers to interconnecting dispersed generation
projects to locations on the electrical grid where a generator interconnection would not be
subject to the interconnection rules of the Federal Energy Regulatory Commission or the
Midwest Independent System Operator.
new text end

new text begin No technical or engineering analyses are necessary in order to complete these duties. The
reliability administrator must report findings and any recommendations to the chairs of the
senate and house of representatives committees with jurisdiction over energy policy by
February 15, 2008.
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