HF 29

as introduced - 91st Legislature, 2020 2nd Special Session (2020 - 2020) Posted on 07/13/2020 12:20pm

A bill for an act
relating to energy; authorizing a power purchase agreement for certain electric
cogeneration activities; amending Minnesota Statutes 2018, section 216B.2424,
by adding subdivisions.

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

Section 1.

Minnesota Statutes 2018, section 216B.2424, is amended by adding a subdivision
to read:

new text begin Subd. 5b. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of subdivision 5c, the following terms have
the meanings given.
new text end

new text begin (b) "Ash" means all species of the genus Fraxinus.
new text end

new text begin (c) "Cogeneration facility" means the St. Paul district heating and cooling system
cogeneration facility that provides thermal energy to St. Paul and sells electricity to a public
utility through a power purchase agreement approved by the Public Utilities Commission.
new text end

new text begin (d) "Department" means the Department of Agriculture.
new text end

new text begin (e) "Emerald ash borer" means the insect known as emerald ash borer, Agrilus planipennis
Fairmaire, in any stage of development.
new text end

new text begin (f) "Renewable energy technology" has the meaning given to "eligible energy technology"
in section 216B.1691, subdivision 1.
new text end

new text begin (g) "St. Paul district heating and cooling system" means a system of boilers, distribution
pipes, and other equipment that provides energy for heating and cooling in St. Paul, and
includes the cogeneration facility.
new text end

new text begin (h) "Waste wood from ash trees" means ash logs and lumber, ash tree waste, and ash
chips and mulch.
new text end

Sec. 2.

Minnesota Statutes 2018, section 216B.2424, is amended by adding a subdivision
to read:

new text begin Subd. 5c. new text end

new text begin New power purchase agreement. new text end

new text begin (a) No later than December 31, 2021, a
public utility subject to subdivision 5 and the cogeneration facility may jointly file a proposal
with the commission to enter into a new power agreement that governs the public utility's
purchase of electricity generated by the cogeneration facility. The new power purchase
agreement is effective through December 31, 2023, with an option to extend to a date no
later than (1) the completion date of an electrification project approved by the commission
under this subdivision, or (2) another date agreed to by the parties and approved by the
commission, whichever is later.
new text end

new text begin (b) The commission is prohibited from approving a new power purchase agreement filed
under this subdivision that does not meet all of the following conditions:
new text end

new text begin (1) the cogeneration facility agrees to continue to utilize waste wood as its primary fuel
source;
new text end

new text begin (2) the cogeneration facility agrees that any waste wood from ash trees removed from
Minnesota counties that have been designated as quarantined areas in Section IV of the
Minnesota State Formal Quarantine for Emerald Ash Borer, issued by the commissioner of
agriculture under section 18G.06, effective November 14, 2019, as amended, for utilization
as biomass fuel by the cogeneration facility must be accompanied by evidence:
new text end

new text begin (i) demonstrating that the transport of biomass fuel from processed waste wood from
ash trees to the cogeneration facility complies with the department's regulatory requirements
under the Minnesota State Formal Quarantine for Emerald Ash Borer, which may consist
of:
new text end

new text begin (A) a certificate authorized or prepared by the commissioner of agriculture or an employee
of the Animal and Plant Health Inspection Service of the United States Department of
Agriculture verifying compliance; or
new text end

new text begin (B) shipping documents demonstrating compliance; or
new text end

new text begin (ii) certifying that the waste wood from ash trees has been chipped to one inch or less
in two dimensions within the county from which the ash trees were originally removed;
new text end

new text begin (3) the price per megawatt hour of electricity paid by the public utility is comparable,
as determined by the commission, with the average cost paid by the utility for electricity
generated by refuse-derived fuel, as defined in section 115A.03, subdivision 25d, that is
purchased by the public utility for sale in Minnesota and does not increase the total costs
charged to the utility's ratepayers, considering all charges;
new text end

new text begin (4) the proposal includes a proposal to the commission for an electrification project that
results in the St. Paul district heating and cooling system being powered by electricity
generated from renewable energy technologies. The proposal must evaluate electrification
of 30, 60, and 100 percent of the energy used by the St. Paul district heating and cooling
system to be accomplished by December 31, 2027. The proposal may also evaluate alternative
dates for implementation. For each level of electrification analyzed, the proposal must
contain:
new text end

new text begin (i) a description of the alternative electrification technologies evaluated and proposed
to be implemented by the electrification project;
new text end

new text begin (ii) an estimate of the cost of the electrification project to the public utility, the impact
on the monthly energy bills of the public utility's Minnesota customers, and the impact on
the monthly energy bills of the customers of the St. Paul district heating and cooling system;
new text end

new text begin (iii) an estimate of the reduction in greenhouse gas emissions resulting from the
electrification project, including greenhouse gas emissions associated with the transportation
of waste wood;
new text end

new text begin (iv) estimated impacts on the operations of the St. Paul district heating and cooling
system; and
new text end

new text begin (v) a timeline for the electrification project; and
new text end

new text begin (5) the power purchase agreement provides a net benefit to the utility customers or the
state.
new text end

new text begin (c) The commission may approve or modify a power purchase agreement and an
electrification project proposed under this subdivision upon finding that the power purchase
agreement and electrification project meet the requirements of paragraphs (a) and (b),
respectively, and are in the public interest, or it may reject the power purchase agreement
and electrification project. The commission is prohibited from approving the modification
of a power purchase agreement or an electrification project individually, but must approve
or reject both together. When determining whether an electrification project is in the public
interest, the commission must consider the effects of the electrification project on air
emissions from the St. Paul district heating and cooling system and how those emissions
impact the environment and residents of affected neighborhoods.
new text end

new text begin (d) If the commission approves the proposal submitted under paragraph (b), clause (4),
the commission may allow the public utility to recover prudently incurred costs net of
revenues resulting from the electrification project through an automatic cost recovery
mechanism that allows for cost recovery outside of a general rate case. The cost recovery
mechanism approved by the commission must:
new text end

new text begin (1) allow a reasonable return on the capital invested in the electrification project by the
public utility, as determined by the commission; and
new text end

new text begin (2) recover costs only from the public utility's Minnesota electric service customers.
new text end