1.1                          A bill for an act 
  1.2             relating to renewable energy; providing for action by 
  1.3             the public utilities commission on purchases of wind 
  1.4             and biomass power; exempting certain plants from 
  1.5             certificate of need proceedings; requiring a study; 
  1.6             amending Minnesota Statutes 1996, section 216B.2422, 
  1.7             subdivision 5; proposing coding for new law in 
  1.8             Minnesota Statutes, chapter 216B. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  [216B.1645] [POWER PURCHASE CONTRACTS OR 
  1.11  INVESTMENTS.] 
  1.12     Upon the petition of a public utility, the public utilities 
  1.13  commission shall approve or disapprove power purchase contracts 
  1.14  or investments entered into or made by the utility to satisfy 
  1.15  the wind and biomass mandates contained in sections 216B.2423 
  1.16  and 216B.2424.  The expenses incurred in accordance with the 
  1.17  contract and the reasonable investments made by a public utility 
  1.18  with the approval of the commission shall be included by the 
  1.19  commission in its determination of just and reasonable rates.  
  1.20  Upon petition by a public utility, the commission shall approve 
  1.21  or approve as modified a rate schedule providing for the 
  1.22  automatic adjustment of charges to recover the expenses or costs 
  1.23  approved by the commission. 
  1.24     Sec. 2.  Minnesota Statutes 1996, section 216B.2422, 
  1.25  subdivision 5, is amended to read: 
  1.26     Subd. 5.  [BIDDING; EXEMPTION FROM CERTIFICATE OF NEED 
  1.27  PROCEEDING.] (a) A utility may select resources to meet its 
  2.1   projected energy demand through a bidding process approved or 
  2.2   established by the commission.  A utility shall use the 
  2.3   environmental cost estimates determined under subdivision 3 in 
  2.4   evaluating bids submitted in a process established under this 
  2.5   subdivision. 
  2.6      (b) A certificate of need proceeding is not required for an 
  2.7   electric power generating plant that has been selected in a 
  2.8   bidding process approved or established by the commission, or 
  2.9   such other selection process approved by the commission, to 
  2.10  satisfy, in whole or in part, the wind power mandate of section 
  2.11  216B.2423 or the biomass mandate of section 216B.2424. 
  2.12     Sec. 3.  [EVALUATION OF BIOMASS FACILITIES.] 
  2.13     The commissioner of agriculture shall evaluate alternative 
  2.14  financing mechanisms by which the cost of financing biomass 
  2.15  energy projects can be reduced to improve the financial 
  2.16  viability of such projects and produce savings for electric 
  2.17  energy consumers in the state. 
  2.18     The analysis must include the extent to which financial 
  2.19  participation of public and private institutions can achieve 
  2.20  interest savings for the incremental development of biomass 
  2.21  energy projects.  Financing options to be reviewed must include: 
  2.22     (1) use of the bonding capacity of existing public 
  2.23  financing authorities; 
  2.24     (2) private financing options for biomass energy 
  2.25  facilities; 
  2.26     (3) establishment of a new development authority to 
  2.27  facilitate public financial participation in biomass energy 
  2.28  projects; 
  2.29     (4) issuance of tax exempt or taxable state general 
  2.30  obligation bonds to produce interest savings for development of 
  2.31  biomass energy facilities; and 
  2.32     (5) production credit payments for biomass energy 
  2.33  production. 
  2.34     In conducting this analysis, the commissioner shall work 
  2.35  with the commissioners of finance, public service, and trade and 
  2.36  economic development and with stakeholders involved in 
  3.1   farm-grown, closed-loop biomass energy projects.  The analysis 
  3.2   with recommendations must be submitted to the legislature by 
  3.3   January 15, 1998.