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HF 1084

as introduced - 88th Legislature (2013 - 2014) Posted on 03/04/2013 01:45pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/04/2013

Current Version - as introduced

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A bill for an act
relating to energy; regulating utility recovery of transmission costs; amending
Minnesota Statutes 2012, section 216B.16, subdivision 7b; proposing coding for
new law in Minnesota Statutes, chapter 216B.

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

Section 1.

Minnesota Statutes 2012, section 216B.16, subdivision 7b, is amended to
read:


Subd. 7b.

Transmission cost adjustment.

(a) Notwithstanding any other
provision of this chapter, the commission may approve a tariff mechanism for the
automatic annual adjustment of charges for the Minnesota jurisdictional costs of (i) new
transmission facilities that have been separately filed and reviewed and approved by
the commission under section 216B.243 or are certified as a priority project or deemed
to be a priority transmission project under section 216B.2425; deleted text begin anddeleted text end (ii) new text begin new transmission
facilities proposed to be constructed by a utility, or an affiliate operating an integrated
system with the utility, approved by the regulatory commission of the state in which
the new transmission facilities are to be constructed to the extent approval is required
by the laws of that state, and determined by the Midwest Independent Transmission
System Operator to benefit the utility or integrated utility transmission system; (iii) new
transmission facilities to be constructed by a utility, or an affiliate operating an integrated
utility transmission system with the utility, where the commission has made an advance
determination under section 216B.1696; and (iv)
new text end charges incurred by a utility that accrue
from other transmission owners' regionally planned transmission projects that have been
determined by the Midwest Independent new text begin Transmission new text end System Operator to benefit the
utilitynew text begin or integrated systemnew text end , as provided for under a federally approved tariff.

(b) Upon filing by a public utility or utilities providing transmission service, the
commission may approve, reject, or modify, after notice and comment, a tariff that:

(1) allows the utility to recover on a timely basis the costs net of revenues of
facilities approved under section 216B.243 or certified or deemed to be certified under
section 216B.2425 or exempt from the requirements of section 216B.243;

(2) allows the charges incurred by a utility that accrue from other transmission
owners' regionally planned transmission projects that have been determined by the
Midwest Independent new text begin Transmission new text end System Operator to benefit the utilitynew text begin or integrated
system
new text end , as provided for under a federally approved tariff. These charges must be reduced
or offset by revenues received by the utility and by amounts the utility charges to other
regional transmission owners, to the extent those revenues and charges have not been
otherwise offset;

(3) new text begin allows the utility to recover on a timely basis the net costs of revenues of facilities
approved by the regulatory commission of the state in which the new transmission
facilities are to be constructed and determined by the Midwest Independent Transmission
System Operator to benefit the utility or integrated transmission system;
new text end

new text begin (4) allows the utility to recover on a timely basis the net costs of revenues of facilities
where the commission has made an advance determination under section 216B.1696;
new text end

new text begin (5) new text end allows a return on investment at the level approved in the utility's last general
rate case, unless a different return is found to be consistent with the public interest;

deleted text begin (4)deleted text end new text begin (6) new text end provides a current return on construction work in progress, provided that
recovery from Minnesota retail customers for the allowance for funds used during
construction is not sought through any other mechanism;

deleted text begin (5)deleted text end new text begin (7) new text end allows for recovery of other expenses if shown to promote a least-cost project
option or is otherwise in the public interest;

deleted text begin (6)deleted text end new text begin (8) new text end allocates project costs appropriately between wholesale and retail customers;

deleted text begin (7)deleted text end new text begin (9) new text end provides a mechanism for recovery above cost, if necessary to improve the
overall economics of the project or projects or is otherwise in the public interest; and

(deleted text begin 8)deleted text end new text begin (10) new text end terminates recovery once costs have been fully recovered or have otherwise
been reflected in the utility's general rates.

(c) A public utility may file annual rate adjustments to be applied to customer bills
paid under the tariff approved in paragraph (b). In its filing, the public utility shall provide:

(1) a description of and context for the facilities included for recovery;

(2) a schedule for implementation of applicable projects;

(3) the utility's costs for these projects;

(4) a description of the utility's efforts to ensure the lowest costs to ratepayers for
the project; and

(5) calculations to establish that the rate adjustment is consistent with the terms
of the tariff established in paragraph (b).

(d) Upon receiving a filing for a rate adjustment pursuant to the tariff established in
paragraph (b), the commission shall approve the annual rate adjustments provided that,
after notice and comment, the costs included for recovery through the tariff were or are
expected to be prudently incurred and achieve transmission system improvements at the
lowest feasible and prudent cost to ratepayers.

Sec. 2.

new text begin [216B.1696] TRANSMISSION PROJECTS; ADVANCE
DETERMINATION OF PRUDENCE.
new text end

new text begin Subdivision 1. new text end

new text begin Qualifying project. new text end

new text begin A public utility may petition the commission for
an advance determination of prudence for one or more transmission projects undertaken
by a utility, or an affiliate operating an integrated transmission system with the utility, that
will be constructed within Minnesota or in another state, if the projects have an expected
jurisdictional cost to Minnesota ratepayers of at least $1,000,000.
new text end

new text begin Subd. 2. new text end

new text begin Petition. new text end

new text begin A petition filed under this section must include a description of the
project; evidence supporting the project's reasonableness, which may include the Midwest
Independent Transmission System Operator regional transmission plan that includes
the transmission project; a discussion of project alternatives; a project implementation
schedule; a cost estimate and support for the reasonableness of the estimated cost; and a
description of the public utility's or affiliate's efforts to ensure the lowest reasonable costs.
The commission shall allow opportunity for oral and written comment on the petition. The
commission shall make a final determination on the petition within ten months of its filing
date. The commission must make findings in support of its determination.
new text end