1.1                          A bill for an act
  1.2             relating to utilities; regulating area development 
  1.3             rate plans; amending Minnesota Statutes 1994, section 
  1.4             216B.161; and Laws 1990, chapter 370, section 7. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 1994, section 216B.161, is 
  1.7   amended to read: 
  1.8      216B.161 [AREA DEVELOPMENT RATE PLAN.] 
  1.9      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  1.10  section, the following terms have the meanings given them in 
  1.11  this subdivision. 
  1.12     (b) "Area development rate" means a rate schedule 
  1.13  established by a utility that provides customers within an area 
  1.14  development zone service under a base utility rate schedule, 
  1.15  except that monthly demand charges may be reduced from the base 
  1.16  rate as agreed upon by the utility and the customer consistent 
  1.17  with this section. 
  1.18     (c) "Area development zone" means a contiguous or 
  1.19  noncontiguous area designated by an authority or municipality 
  1.20  for development or redevelopment and within which one of the 
  1.21  following conditions exists: 
  1.22     (1) obsolete buildings not suitable for improvement or 
  1.23  conversion or other identified hazards to the health, safety, 
  1.24  and general well-being of the community; 
  1.25     (2) buildings in need of substantial rehabilitation or in 
  2.1   substandard condition; or 
  2.2      (3) low values and damaged investments. 
  2.3      (d) "Authority" means a rural development financing 
  2.4   authority established under sections 469.142 to 469.150; a 
  2.5   housing and redevelopment authority established under sections 
  2.6   469.001 to 469.047; a port authority established under sections 
  2.7   469.048 to 469.068; an economic development authority 
  2.8   established under sections 469.090 to 469.108; a redevelopment 
  2.9   agency as defined in sections 469.152 to 469.165; the iron range 
  2.10  resources and rehabilitation board established under section 
  2.11  298.22; a municipality that is administering a development 
  2.12  district created under sections 469.124 to 469.134 or any 
  2.13  special law; a municipality that undertakes a project under 
  2.14  sections 469.152 to 469.165, except a town located outside the 
  2.15  metropolitan area as defined in section 473.121, subdivision 2, 
  2.16  or with a population of 5,000 persons or less; or a municipality 
  2.17  that exercises the powers of a port authority under any general 
  2.18  or special law.  
  2.19     (e) "Municipality" means a city, however organized, and, 
  2.20  with respect to a project undertaken under sections 469.152 to 
  2.21  469.165, "municipality" has the meaning given in sections 
  2.22  469.152 to 469.165, and, with respect to a project undertaken 
  2.23  under sections 469.142 to 469.151 or a county or multicounty 
  2.24  project undertaken under sections 469.004 to 469.008, also 
  2.25  includes any county. 
  2.26     Subd. 2.  [PILOT AREA DEVELOPMENT RATE PLAN PROGRAM.] The 
  2.27  commission shall order at least one public utility to establish 
  2.28  a pilot program that offers an may allow gas or electric public 
  2.29  utilities to offer area development rate rates.  The program 
  2.30  must be designed to assist industrial revitalization projects 
  2.31  located within the service area of the participating utility. 
  2.32     Subd. 3.  [TERMS AND CONDITIONS OF THE RATE.] An area 
  2.33  development rate offered under this section must: 
  2.34     (1) be offered for a period of more than two years but no 
  2.35  more than five years specified length of time to be determined 
  2.36  by the commission; 
  3.1      (2) be offered as a supplement to other development 
  3.2   incentives offered by the authority or municipality in which the 
  3.3   rate is available; 
  3.4      (3) be available only to new or expanding manufacturing or 
  3.5   wholesale trade customers; 
  3.6      (4) be designed to recover at least the incremental cost of 
  3.7   providing service to the participating customers; 
  3.8      (5) be offered in a fixed number of area development zones; 
  3.9   and 
  3.10     (6) include a provision that the utility provide 
  3.11  participating customers with an energy audit and inform those 
  3.12  customers of all existing energy conservation programs available 
  3.13  from the utility. 
  3.14  Recovery of costs under clause (4) may be made only from the 
  3.15  class of customers to which the rate is offered and not must not 
  3.16  be from residential customers.  A utility within a general rate 
  3.17  case, may seek recovery of the difference in revenue collected 
  3.18  under the area development plan rate and what would have been 
  3.19  collected under the standard tariff. 
  3.20     Subd. 4.  [EVALUATION.] The commission shall evaluate the 
  3.21  impact and effectiveness of the area development plan or plans 
  3.22  established under this section.  The evaluation must include 
  3.23  analysis of information submitted by the utility regarding the 
  3.24  plan.  Within 60 days after the expiration of a plan, the 
  3.25  commission shall determine whether the area development rates 
  3.26  should be continued, modified, or eliminated.  The commission 
  3.27  shall submit its findings to the legislature by January 1, 1995. 
  3.28     Sec. 2.  Laws 1990, chapter 370, section 7, is amended to 
  3.29  read: 
  3.30     Sec. 7.  [REPEALER.] 
  3.31     Sections 2 and 3 are Section 3 is repealed July 1, 1995. 
  3.32     Sec. 3.  [EFFECTIVE DATE.] 
  3.33     Sections 1 and 2 are effective the day following final 
  3.34  enactment.