2003 Minnesota Statutes

     473.1293 Energy forward pricing mechanisms. 

    Subdivision 1.    Definitions.  The following 
 definitions apply in this section. 

    (a) "Energy" means natural gas, heating oil, diesel fuel, 
 or any other energy source, except electric, used in 
 Metropolitan Council operations. 

    (b) "Forward pricing mechanism" means either: 

    (1) a contract or financial instrument that obligates an 
 entity to buy or sell a specified amount of an energy commodity 
 at a future date and at a set price; or 

    (2) an option to buy or sell the contract or financial 
 instrument. 

    Subd. 2.    Authority provided.  Notwithstanding any 
 other law to the contrary, the council may use forward pricing 
 mechanisms for budget risk reduction. 

    Subd. 3.    Conditions.  (a) Forward pricing 
 transactions made under this section must be made only under the 
 conditions in paragraphs (b), (c), and (d). 

    (b) The amount of energy forward priced must not exceed the 
 estimated energy usage for council operations for the period of 
 time covered by the forward pricing mechanism. 

    (c) The holding period and expiration date for any forward 
 pricing mechanism must not exceed 24 months from the trade date 
 of the transaction. 

    (d) Separate accounts must be established for each 
 operational energy for which forward pricing mechanisms are used 
 under this section. 

    Subd. 4.    Written policies and procedures.  Before 
 exercising authority under subdivision 2, the council must have 
 written policies and procedures governing the use of forward 
 pricing mechanisms. 

    Subd. 5.    Oversight process.  (a) Before exercising 
 authority under subdivision 2, the governing body of the council 
 must establish an oversight process that provides for review of 
 the council's use of forward pricing mechanisms.  

    (b) The process must include: 

    (1) internal or external audit reviews; 

    (2) quarterly reports to, and review by, an internal 
 investment committee; and 

    (3) internal management control. 

    HIST: 1Sp2003 c 16 s 2