1.1                          A bill for an act 
  1.2             relating to energy; enacting the Minnesota Energy 
  1.3             Security and Reliability Act; requiring an energy 
  1.4             security blueprint and a state transmission plan; 
  1.5             establishing position of reliability administrator; 
  1.6             providing for essential energy infrastructure; 
  1.7             modifying provisions for siting, routing, and 
  1.8             determining the need for large electric power 
  1.9             facilities; regulating conservation expenditures by 
  1.10            energy utilities and eliminating state pre-approval of 
  1.11            conservation plans by public utilities; encouraging 
  1.12            regulatory flexibility in supplying and obtaining 
  1.13            energy; regulating interconnection of distributed 
  1.14            utility resources; providing for safety and service 
  1.15            standards from distribution utilities; clarifying the 
  1.16            state cold weather disconnection requirements; 
  1.17            authorizing municipal utilities, municipal power 
  1.18            agencies, cooperative utilities, and investor-owned 
  1.19            utilities to form joint ventures to provide utility 
  1.20            services; eliminating the requirement for individual 
  1.21            utility resource plans; requiring reports; making 
  1.22            technical, conforming, and clarifying changes; 
  1.23            appropriating money; amending Minnesota Statutes 2000, 
  1.24            sections 16B.32, subdivision 2; 116C.52, subdivisions 
  1.25            4, 10; 116C.53, subdivisions 2, 3; 116C.57, 
  1.26            subdivisions 1, 2, 4, by adding subdivisions; 116C.58; 
  1.27            116C.59, subdivisions 1, 4; 116C.60; 116C.61, 
  1.28            subdivisions 1, 3; 116C.62; 116C.64; 116C.645; 
  1.29            116C.65; 116C.66; 116C.69; 216B.095; 216B.097, 
  1.30            subdivision 1; 216B.16, subdivision 15; 216B.1645; 
  1.31            216B.241, subdivisions 1, 1a, 1b, 2; 216B.2421, 
  1.32            subdivision 2; 216B.243, subdivisions 3, 4, 8; 
  1.33            216B.62, subdivision 5; 216C.051, subdivisions 6, 9; 
  1.34            216C.41, subdivisions 3, 5, by adding a subdivision; 
  1.35            proposing coding for new law in Minnesota Statutes, 
  1.36            chapters 16B; 116C; 216B; 216C; 452; repealing 
  1.37            Minnesota Statutes 2000, sections 116C.55, 
  1.38            subdivisions 2, 3; 116C.57, subdivisions 3, 5, 5a; 
  1.39            116C.67; 216B.2421, subdivision 3. 
  1.40  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.41                             ARTICLE 1
  1.42                PUBLIC BUILDING ENERGY CONSERVATION
  2.1      Section 1.  Minnesota Statutes 2000, section 16B.32, 
  2.2   subdivision 2, is amended to read: 
  2.3      Subd. 2.  [ENERGY CONSERVATION GOALS; EFFICIENCY 
  2.4   PROGRAM.] (a) The commissioner of administration in consultation 
  2.5   with the department of public service commerce, in cooperation 
  2.6   with one or more public utilities or comprehensive energy 
  2.7   services providers, may conduct a shared-savings program 
  2.8   involving energy conservation expenditures on state-owned and 
  2.9   wholly state-leased buildings.  The public utility or energy 
  2.10  services provider shall contract with appropriate state agencies 
  2.11  to implement energy efficiency improvements in the selected 
  2.12  buildings.  A contract must require the public utility or energy 
  2.13  services provider to include all energy efficiency improvements 
  2.14  in selected buildings that are calculated to achieve a cost 
  2.15  payback within ten years.  The contract must require that the 
  2.16  public utility or energy services provider be repaid solely from 
  2.17  energy cost savings and only to the extent of energy cost 
  2.18  savings.  Repayments must be interest-free.  The goal of the 
  2.19  program in this paragraph is to demonstrate that through 
  2.20  effective energy conservation the total energy consumption per 
  2.21  square foot of state-owned and wholly state-leased buildings 
  2.22  could be reduced exceed existing energy code by at least 25 30 
  2.23  percent from consumption in the base year of 1990.  All agencies 
  2.24  participating in the program must report to the commissioner of 
  2.25  administration their monthly energy usage, building schedules, 
  2.26  inventory of energy-consuming equipment, and other information 
  2.27  as needed by the commissioner to manage and evaluate the program.
  2.28     (b) The commissioner may exclude from the program of 
  2.29  paragraph (a) a building in which energy conservation measures 
  2.30  are carried out.  "Energy conservation measures" means measures 
  2.31  that are applied to a state building that improve energy 
  2.32  efficiency and have a simple return of investment in ten years 
  2.33  or within the remaining period of a lease, whichever time is 
  2.34  shorter, and involves energy conservation, conservation 
  2.35  facilities, renewable energy sources, improvements in operations 
  2.36  and maintenance efficiencies, or retrofit activities. 
  3.1      (c) This subdivision expires January 1, 2001. 
  3.2      Sec. 2.  [16B.325] [SUSTAINABLE BUILDING GUIDELINES.] 
  3.3      The department of administration and the department of 
  3.4   commerce, with the assistance of other agencies, shall develop 
  3.5   sustainable building design guidelines for all new state 
  3.6   buildings by January 15, 2003.  The primary objectives of these 
  3.7   guidelines are to ensure that all new state buildings initially 
  3.8   exceed existing energy code, as established in Minnesota Rules, 
  3.9   chapter 7676, by at least 30 percent.  The guidelines must focus 
  3.10  on achieving the lowest possible lifetime cost for new buildings 
  3.11  and allow for changes in the guidelines that encourage continual 
  3.12  energy conservation improvements in new buildings.  The design 
  3.13  guidelines must establish sustainability guidelines that include 
  3.14  air quality and lighting standards and that create and maintain 
  3.15  a healthy environment and facilitate productivity improvements; 
  3.16  specify ways to reduce material costs; and must consider the 
  3.17  long-term operating costs of the building, including the use of 
  3.18  renewable energy sources and distributed electric energy 
  3.19  generation that uses a renewable source or natural gas or a fuel 
  3.20  that is as clean or cleaner than natural gas.  In developing the 
  3.21  guidelines, the departments shall use an open process, including 
  3.22  providing the opportunity for public comment.  The guidelines 
  3.23  established under this section are mandatory for all new 
  3.24  buildings receiving funding from the bond proceeds fund after 
  3.25  January 1, 2004. 
  3.26     Sec. 3.  [BENCHMARKS FOR EXISTING PUBLIC BUILDINGS.] 
  3.27     The department of administration shall maintain information 
  3.28  on energy usage in all public buildings for the purpose of 
  3.29  establishing energy efficiency benchmarks and energy 
  3.30  conservation goals.  The department shall report preliminary 
  3.31  energy conservation goals to the chairs of the senate 
  3.32  telecommunications, energy and utilities committee and the house 
  3.33  regulated industries committee by January 15, 2002.  The 
  3.34  department shall develop a comprehensive plan by January 15, 
  3.35  2003, to maximize electrical and thermal energy efficiency in 
  3.36  existing public buildings through conservation measures having a 
  4.1   simple payback within ten to 15 years.  The plan must detail the 
  4.2   steps necessary to implement the conservation measures and 
  4.3   include the projected costs of these measures.  The owner or 
  4.4   operator of a public building subject to this section shall 
  4.5   provide information to the department of administration 
  4.6   necessary to accomplish the purposes of this section.  
  4.7                              ARTICLE 2
  4.8                            JOINT VENTURES
  4.9      Section 1.  [452.25] [JOINT VENTURES BY UTILITIES.] 
  4.10     Subdivision 1.  [APPLICABILITY.] This section applies to 
  4.11  all home rule charter and statutory cities, except as provided 
  4.12  in section 2. 
  4.13     Subd. 2.  [DEFINITIONS.] For purposes of this section: 
  4.14     (a) "City" means a statutory or home rule charter city, 
  4.15  section 410.015 to the contrary notwithstanding. 
  4.16     (b) "Cooperative association" means a cooperative 
  4.17  association organized under chapter 308A.  
  4.18     (c) "Governing body" means (1) the city council in a city 
  4.19  that operates a municipal utility, or (2) a board, commission, 
  4.20  or body empowered by law, city charter, or ordinance or 
  4.21  resolution of the city council to control and operate the 
  4.22  municipal utility. 
  4.23     (d) "Investor-owned utility" means an entity that provides 
  4.24  utility services to the public under chapter 216B and that is 
  4.25  owned by private persons.  
  4.26     (e) "Municipal power agency" means an organization created 
  4.27  under sections 453.51 to 453.62. 
  4.28     (f) "Municipal utility" means a utility owned, operated, or 
  4.29  controlled by a city to provide utility services. 
  4.30     (g) "Public utility" or "utility" means a provider of 
  4.31  electric or water facilities or services or an entity engaged in 
  4.32  other similar or related operations authorized by law or charter.
  4.33     Subd. 3.  [AUTHORITY.] (a) Upon the approval of its elected 
  4.34  utilities commission or, if there be none, its city council, a 
  4.35  municipal utility may enter into a joint venture with other 
  4.36  municipal utilities, municipal power agencies, cooperative 
  5.1   associations, or investor-owned utilities to provide utility 
  5.2   services.  Retail electric utility services provided by a joint 
  5.3   venture must be within the boundaries of each utility's 
  5.4   exclusive electric service territory as shown on the map of 
  5.5   service territories maintained by the department of commerce.  
  5.6   The terms and conditions of the joint venture are subject to 
  5.7   ratification by the governing bodies of the respective utilities 
  5.8   and may include the formation of a corporate or other separate 
  5.9   legal entity with an administrative and governance structure 
  5.10  independent of the respective utilities. 
  5.11     (b) A corporate or other separate legal entity, if formed: 
  5.12     (1) has the authority and legal capacity and, in the 
  5.13  exercise of the joint venture, the powers, privileges, 
  5.14  responsibilities, and duties authorized by this section; 
  5.15     (2) is subject to the laws and rules applicable to the 
  5.16  organization, internal governance, and activities of the entity; 
  5.17     (3) in connection with its property and affairs and in 
  5.18  connection with property within its control, may exercise any 
  5.19  and all powers that may be exercised by a natural person or a 
  5.20  private corporation or other private legal entity in connection 
  5.21  with similar property and affairs; and 
  5.22     (4) a joint venture that does not include an investor-owned 
  5.23  utility may elect to be deemed a municipal utility or a 
  5.24  cooperative association for purposes of chapter 216B or other 
  5.25  federal or state law regulating utility operations; and 
  5.26     (5) for a joint venture that includes an investor-owned 
  5.27  utility, the commission has authority over the activities, 
  5.28  services and rates of the joint venture, and may exercise that 
  5.29  authority, to the same extent the commission has authority over 
  5.30  the activities, services and rates of the investor-owned utility 
  5.31  itself. 
  5.32     (c) Any corporation, if formed, must comply with section 
  5.33  465.719, subdivisions 9, 10, 11, 12, 13, and 14.  The term 
  5.34  "political subdivision," as it is used in section 465.719, shall 
  5.35  refer to the city council of a city. 
  5.36     Subd. 4.  [RETAIL CUSTOMERS.] Unless the joint venture's 
  6.1   retail electric rates, as defined in section 216B.02, 
  6.2   subdivision 5, of a joint venture that does not include an 
  6.3   investor-owned utility, are approved by the governing body of 
  6.4   each municipal utility or municipal power agency and the board 
  6.5   of directors of each cooperative association that is party to 
  6.6   the joint venture, the retail electric customers of the joint 
  6.7   venture, if their number be more than 25, may elect to become 
  6.8   subject to electric rate regulation by the public utilities 
  6.9   commission as provided in chapter 216B.  The election is subject 
  6.10  to and must be carried out according to the procedures in 
  6.11  section 216B.026 and, for these purposes, each retail electric 
  6.12  customer of the joint venture is deemed a member or stockholder 
  6.13  as referred to in section 216B.026.  
  6.14     Subd. 5.  [POWERS.] (a) A joint venture under this section 
  6.15  has the powers, privileges, responsibilities, and duties of the 
  6.16  separate utilities entering into the joint venture as the joint 
  6.17  venture agreement may provide, including the powers under 
  6.18  paragraph (b), except that: 
  6.19     (1) with respect to retail electric utility services, a 
  6.20  joint venture shall not enlarge or extend the service territory 
  6.21  served by the joint venture by virtue of the authority granted 
  6.22  in sections 216B.44, 216B.45, and 216B.47; 
  6.23     (2) a joint venture may extend service to an existing 
  6.24  connected load of 2,000 kilowatts or more, pursuant to section 
  6.25  216B.42, when the load is outside of the assigned service area 
  6.26  of the joint venture, or of the electric utilities party to the 
  6.27  joint venture, only if the load is already being served by one 
  6.28  of the electric utilities party to the joint venture; and 
  6.29     (3) a privately owned utility, as defined in section 
  6.30  216B.02, may extend service to an existing connected load of 
  6.31  2,000 kilowatts or more, pursuant to section 216B.42, when the 
  6.32  load is located within the assigned service territory of the 
  6.33  joint venture, or of the electric utilities party to the joint 
  6.34  venture, only if the load is already being served by that 
  6.35  privately owned utility. 
  6.36  The limitations of clauses (1) to (3) do not apply if written 
  7.1   consent to the action is obtained from the electric utility 
  7.2   assigned to and serving the affected service territory or 
  7.3   connected load. 
  7.4      (b) Joint venture powers include, but are not limited to, 
  7.5   the authority to: 
  7.6      (1) finance, own, acquire, construct, and operate 
  7.7   facilities necessary to provide utility services to retail 
  7.8   customers of the joint venture, including generation, 
  7.9   transmission, and distribution facilities, and like facilities 
  7.10  used in other utility services; 
  7.11     (2) combine assigned service territories, in whole or in 
  7.12  part, upon notice to, hearing by, and approval of the public 
  7.13  utilities commission; 
  7.14     (3) serve customers in the utilities' service territories 
  7.15  or in the combined service territory; 
  7.16     (4) combine, share, or employ administrative, managerial, 
  7.17  operational, or other staff if combining or sharing will not 
  7.18  degrade safety, reliability, or customer service standards; 
  7.19     (5) provide for joint administrative functions, such as 
  7.20  meter reading and billings; 
  7.21     (6) purchase or sell utility services at wholesale for 
  7.22  resale to customers; 
  7.23     (7) provide conservation programs, other utility programs, 
  7.24  and public interest programs, such as cold weather shut-off 
  7.25  protection and conservation spending programs, as required by 
  7.26  law and rule; and 
  7.27     (8) participate as the parties deem necessary in providing 
  7.28  utility services with other municipal utilities, cooperative 
  7.29  utilities, investor-owned utilities, or other entities, public 
  7.30  or private. 
  7.31     (c) Notwithstanding any contrary provision within this 
  7.32  section, a joint venture formed under this section may engage in 
  7.33  wholesale utility services unless the municipal utility, 
  7.34  municipal power agency, cooperative association, or 
  7.35  investor-owned utility party to the joint venture is prohibited 
  7.36  under current law from conducting that activity; but, in any 
  8.1   case, the joint venture may provide wholesale services to a 
  8.2   municipal utility, a cooperative association, or an 
  8.3   investor-owned utility that is party to the joint venture. 
  8.4      (d) This subdivision does not limit the authority of a 
  8.5   joint venture to exercise rights of eminent domain for other 
  8.6   utility purposes to the same extent as is permitted of those 
  8.7   utilities party to the joint venture. 
  8.8      Subd. 6.  [CONSTRUCTION.] (a) The powers conferred by this 
  8.9   section are in addition to the powers conferred by other law or 
  8.10  charter.  A joint venture under this section, and a municipal 
  8.11  utility with respect to any joint venture under this section, 
  8.12  have the powers necessary to effect the intent and purpose of 
  8.13  this section, including, but not limited to, the expenditure of 
  8.14  public funds and the transfer of real or personal property in 
  8.15  accordance with the terms and conditions of the joint venture 
  8.16  and the joint venture agreement.  This section is complete in 
  8.17  itself with respect to the formation and operation of a joint 
  8.18  venture under this section and with respect to a municipal 
  8.19  utility, a cooperative association, or an investor-owned utility 
  8.20  party to a joint venture related to their creation of and 
  8.21  dealings with the joint venture, without regard to other laws or 
  8.22  city charter provisions that do not specifically address or 
  8.23  refer to this section or a joint venture created under this 
  8.24  section. 
  8.25     (b) This section must not be construed to supersede or 
  8.26  modify: 
  8.27     (1) the power of a city council conferred by charter to 
  8.28  overrule or override any action of a governing body other than 
  8.29  the actions of the joint venture; 
  8.30     (2) chapter 216B; 
  8.31     (3) any referendum requirements applicable to the creation 
  8.32  of a new electric utility by a municipality under section 
  8.33  216B.46 or 216B.465; or 
  8.34     (4) any powers, privileges, or authority or any duties or 
  8.35  obligations of a municipal utility, municipal power agency, or 
  8.36  cooperative association acting as a separate legal entity 
  9.1   without reference to a joint venture created under this section. 
  9.2      Sec. 2.  [EXCEPTION.] 
  9.3      Laws 1996, chapter 300, section 1, as amended by Laws 1997, 
  9.4   chapter 232, section 1, shall govern joint ventures created 
  9.5   under it and those joint ventures are not governed by section 1. 
  9.6      Sec. 3.  [EFFECTIVE DATE.] 
  9.7      Sections 1 and 2 are effective the day following final 
  9.8   enactment. 
  9.9                              ARTICLE 3
  9.10                           MISCELLANEOUS
  9.11     Section 1.  [216B.1611] [INTERCONNECTION OF ON-SITE 
  9.12  DISTRIBUTED GENERATION.] 
  9.13     Subdivision 1.  [PURPOSE.] The purpose of this section is 
  9.14  to: (1) establish the terms and conditions that govern the 
  9.15  interconnection and parallel operation of on-site distributed 
  9.16  generation; (2) to provide cost savings and reliability benefits 
  9.17  to customers; (3) to establish technical requirements that will 
  9.18  promote the safe and reliable parallel operation of on-site 
  9.19  distributed generation resources; (4) to enhance both the 
  9.20  reliability of electric service and economic efficiency in the 
  9.21  production and consumption of electricity; and (5) to promote 
  9.22  the use of distributed resources in order to provide electric 
  9.23  system benefits during periods of capacity constraints. 
  9.24     Subd. 2.  [DISTRIBUTED GENERATION; GENERIC PROCEEDING.] (a) 
  9.25  The commission shall initiate a proceeding within 30 days of the 
  9.26  effective date of this section, to establish, by order, generic 
  9.27  standards for utility tariffs for the interconnection and 
  9.28  parallel operation of distributed generation fueled by natural 
  9.29  gas or a renewable fuel, or another similarly clean fuel or 
  9.30  combination of fuels of no more than ten megawatts of 
  9.31  interconnected capacity.  At a minimum, these tariff standards 
  9.32  must:  
  9.33     (1) to the extent possible, be consistent with industry and 
  9.34  other federal and state operational and safety standards; 
  9.35     (2) provide for the low-cost, safe, and standardized 
  9.36  interconnection of facilities; 
 10.1      (3) take into account differing system requirements and 
 10.2   hardware, as well as the overall demand load requirements of 
 10.3   individual utilities; 
 10.4      (4) allow for reasonable terms and conditions, consistent 
 10.5   with the cost and operating characteristics of the various 
 10.6   technologies, so that a utility can reasonably be assured of the 
 10.7   reliable, safe, and efficient operation of the interconnected 
 10.8   equipment; and 
 10.9      (5) establish:  (i) a standard interconnection agreement 
 10.10  that sets forth the contractual conditions under which a company 
 10.11  and a customer agree that one or more facilities may be 
 10.12  interconnected with the company's utility system; and (ii) a 
 10.13  standard application for interconnection and parallel operation 
 10.14  with the utility system. 
 10.15     (b) The commission may develop financial incentives based 
 10.16  on a public utility's performance in encouraging residential and 
 10.17  small business customers to participate in on-site generation. 
 10.18     Subd. 3.  [DISTRIBUTED GENERATION TARIFF.] Within 90 days 
 10.19  of the issuance of an order under subdivision 2: 
 10.20     (1) each public utility providing electric service at 
 10.21  retail shall file a distributed generation tariff consistent 
 10.22  with that order, for commission approval or approval with 
 10.23  modification; and 
 10.24     (2) each municipal utility and cooperative electric 
 10.25  association shall adopt a distributed generation tariff that 
 10.26  addresses the issues included in the commission's order. 
 10.27     Subd. 4.  [REPORTING REQUIREMENTS.] (a) Each electric 
 10.28  utility shall maintain records concerning applications received 
 10.29  for interconnection and parallel operation of distributed 
 10.30  generation.  The records must include the date each application 
 10.31  is received, documents generated in the course of processing 
 10.32  each application, correspondence regarding each application, and 
 10.33  the final disposition of each application.  
 10.34     (b) Every electric utility shall file with the commissioner 
 10.35  a distributed generation interconnection report for the 
 10.36  preceding calendar year that identifies each distributed 
 11.1   generation facility interconnected with the utility's 
 11.2   distribution system.  The report must list the new distributed 
 11.3   generation facilities interconnected with the system since the 
 11.4   previous year's report, any distributed generation facilities no 
 11.5   longer interconnected with the utility's system since the 
 11.6   previous report, the capacity of each facility, and the feeder 
 11.7   or other point on the company's utility system where the 
 11.8   facility is connected.  The annual report must also identify all 
 11.9   applications for interconnection received during the previous 
 11.10  one-year period, and the disposition of the applications. 
 11.11     Sec. 2.  [216B.79] [PREVENTATIVE MAINTENANCE.] 
 11.12     The commission may order public utilities to make adequate 
 11.13  infrastructure investments and undertake sufficient preventative 
 11.14  maintenance with regard to generation, transmission, and 
 11.15  distribution facilities.  
 11.16     Sec. 3.  [ALTERNATIVE AND RENEWABLE ENERGY SOURCE 
 11.17  DEVELOPMENT.] 
 11.18     The legislative electric energy task force shall evaluate 
 11.19  options and priorities related to energy source development of 
 11.20  resources derived from agricultural production and to energy 
 11.21  options available in rural parts of the state.  These energy 
 11.22  sources include, but are not limited to: 
 11.23     (1) alternative diesel engine fuels derived from soybean 
 11.24  and other agricultural plant oils or animal fats; 
 11.25     (2) ethanol derived from grains or other agricultural 
 11.26  products or by-products; 
 11.27     (3) methane or other combustible gases derived from the 
 11.28  processing of plant or animal wastes; 
 11.29     (4) biomass fuels such as short-rotation woody or fibrous 
 11.30  agricultural crops produced for conversion to useful energy; 
 11.31     (5) use of corn and corn by-products as a fuel for electric 
 11.32  generation, including for cogeneration facilities; and 
 11.33     (6) further development of the solar, wind, and biomass 
 11.34  energy potential in the state. 
 11.35                             ARTICLE 4
 11.36                        CONSUMER PROTECTION
 12.1      Section 1.  Minnesota Statutes 2000, section 216B.095, is 
 12.2   amended to read: 
 12.3      216B.095 [DISCONNECTION DURING COLD WEATHER.] 
 12.4      The commission shall amend its rules governing 
 12.5   disconnection of residential utility customers who are unable to 
 12.6   pay for utility service during cold weather to include the 
 12.7   following: 
 12.8      (1) coverage of customers whose household income is less 
 12.9   than 185 percent of the federal poverty level 50 percent of the 
 12.10  state median income; 
 12.11     (2) a requirement that a customer who pays the utility at 
 12.12  least ten percent of the customer's income or the full amount of 
 12.13  the utility bill, whichever is less, in a cold weather month 
 12.14  cannot be disconnected during that month.  The customer's income 
 12.15  means the actual monthly income of the customer or the average 
 12.16  monthly income of the customer computed on an annual calendar 
 12.17  year, whichever is less, and does not include any amount 
 12.18  received for energy assistance; 
 12.19     (3) that the ten percent figure in clause (2) must be 
 12.20  prorated between energy providers proportionate to each 
 12.21  provider's share of the customer's total energy costs where the 
 12.22  customer receives service from more than one provider; 
 12.23     (4) that a customer's household income does not include any 
 12.24  amount received for energy assistance; 
 12.25     (5) verification of income by the local energy assistance 
 12.26  provider or the utility, unless the customer is automatically 
 12.27  eligible for protection against disconnection as a recipient of 
 12.28  any form of public assistance, including energy assistance, that 
 12.29  uses income eligibility in an amount at or below the income 
 12.30  eligibility in clause (1); and 
 12.31     (6) (5) a requirement that the customer receive, from the 
 12.32  local energy assistance provider or other entity, budget 
 12.33  counseling and referral referrals to energy assistance, 
 12.34  weatherization, conservation, or other programs likely to reduce 
 12.35  the customer's consumption of energy bills; and 
 12.36     (6) a requirement that customers who have demonstrated an 
 13.1   inability to pay on forms provided for that purpose by the 
 13.2   utility, and who make reasonably timely payments to the utility 
 13.3   under a payment plan that considers the financial resources of 
 13.4   the household, cannot be disconnected from utility service from 
 13.5   October 15 through April 15.  A customer who is receiving energy 
 13.6   assistance is deemed to have demonstrated an inability to pay. 
 13.7   For the purpose of clause (2), the "customer's income" means the 
 13.8   actual monthly income of the customer except for a customer who 
 13.9   is normally employed only on a seasonal basis and whose annual 
 13.10  income is over 135 percent of the federal poverty level, in 
 13.11  which case the customer's income is the average monthly income 
 13.12  of the customer computed on an annual calendar year basis. 
 13.13     Sec. 2.  Minnesota Statutes 2000, section 216B.097, 
 13.14  subdivision 1, is amended to read: 
 13.15     Subdivision 1.  [APPLICATION; NOTICE TO RESIDENTIAL 
 13.16  CUSTOMER.] (a) A municipal utility or a cooperative electric 
 13.17  association must not disconnect the utility service of a 
 13.18  residential customer during the period between October 15 and 
 13.19  April 15 if the disconnection affects the primary heat source 
 13.20  for the residential unit when the following conditions are met: 
 13.21     (1) the disconnection would occur during the period between 
 13.22  October 15 and April 15; 
 13.23     (2) the customer has declared inability to pay on forms 
 13.24  provided by the utility.  For the purposes of this clause, a 
 13.25  customer that is receiving energy assistance is deemed to have 
 13.26  demonstrated an inability to pay; 
 13.27     (3) (2) the household income of the customer is less than 
 13.28  185 percent of the federal poverty level, as documented by the 
 13.29  customer to the utility; and 50 percent of the state median 
 13.30  income; 
 13.31     (3) verification of income may be conducted by the local 
 13.32  energy assistance provider or the utility, unless the customer 
 13.33  is automatically eligible for protection against disconnection 
 13.34  as a recipient of any form of public assistance, including 
 13.35  energy assistance that uses income eligibility in an amount at 
 13.36  or below the income eligibility in clause (2); 
 14.1      (4) the customer's a customer whose account is current for 
 14.2   the billing period immediately prior to October 15 or the 
 14.3   customer has entered who, at any time, enters into a payment 
 14.4   schedule that considers the financial resources of the household 
 14.5   and is reasonably current with payments under the schedule; and 
 14.6      (5) the customer receives referrals to energy assistance 
 14.7   programs, weatherization, conservation, or other programs likely 
 14.8   to reduce the customer's energy bills. 
 14.9      (b) A municipal utility or a cooperative electric 
 14.10  association must, between August 15 and October 15 of each year, 
 14.11  notify all residential customers of the provisions of this 
 14.12  section. 
 14.13     Sec. 3.  [216B.098] [RESIDENTIAL CUSTOMER PROTECTIONS.] 
 14.14     Subdivision 1.  [APPLICABILITY.] The provisions of this 
 14.15  section apply to residential customers of public utilities, 
 14.16  municipal utilities, and cooperative electric associations.  
 14.17  Each municipal utility and cooperative electric association may 
 14.18  establish terms and conditions for the plans and agreements 
 14.19  required under subdivisions 2 and 3. 
 14.20     Subd. 2.  [BUDGET BILLING PLANS.] A utility shall offer a 
 14.21  customer a budget billing plan for payment of charges for 
 14.22  service, including adequate notice to customers prior to 
 14.23  changing budget payment amounts.  Municipal utilities having 
 14.24  3,000 or fewer customers are exempt from this requirement.  
 14.25  Municipal utilities having more than 3,000 customers shall 
 14.26  implement this requirement within two years of the effective 
 14.27  date of this chapter.  
 14.28     Subd. 3.  [PAYMENT AGREEMENTS.] A utility shall offer a 
 14.29  payment agreement for the payment of arrears.  
 14.30     Subd. 4.  [UNDERCHARGES.] A utility shall offer a payment 
 14.31  agreement to customers who have been undercharged if no culpable 
 14.32  conduct by the customer or resident of the customer's household 
 14.33  caused the undercharge.  The agreement must cover a period equal 
 14.34  to the time over which the undercharge occurred or a different 
 14.35  time period that is mutually agreeable to the customer and the 
 14.36  utility.  No interest or delinquency fee may be charged under 
 15.1   this agreement.  
 15.2      Subd. 5.  [MEDICALLY NECESSARY EQUIPMENT.] A utility shall 
 15.3   reconnect or continue service to a customer's residence where a 
 15.4   medical emergency exists or where medical equipment requiring 
 15.5   electricity is necessary to sustain life is in use, provided 
 15.6   that the utility receives from a medical doctor written 
 15.7   certification, or initial certification by telephone and written 
 15.8   certification within five business days, that failure to 
 15.9   reconnect or continue service will impair or threaten the health 
 15.10  or safety of a resident of the customer's household.  The 
 15.11  customer must enter into a payment agreement. 
 15.12     Subd. 6.  [COMMISSION AUTHORITY.] In addition to any other 
 15.13  authority, the commission has the authority to resolve customer 
 15.14  complaints against a public utility, as defined in section 
 15.15  216B.02, subdivision 4, whether or not the complaint involves a 
 15.16  violation of this chapter.  The commission may delegate this 
 15.17  authority to commission staff as it deems appropriate. 
 15.18     Sec. 4.  Minnesota Statutes 2000, section 216B.16, 
 15.19  subdivision 15, is amended to read: 
 15.20     Subd. 15.  [LOW-INCOME RATE PROGRAMS; REPORT.] (a) The 
 15.21  commission may consider ability to pay as a factor in setting 
 15.22  utility rates and may establish programs for low-income 
 15.23  residential ratepayers in order to ensure affordable, reliable, 
 15.24  and continuous service to low-income utility customers.  The 
 15.25  commission shall order a pilot program for at least one 
 15.26  utility.  In ordering pilot programs, the commission shall 
 15.27  consider the following: 
 15.28     (1) the potential for low-income programs to provide 
 15.29  savings to the utility for all collection costs including but 
 15.30  not limited to:  costs of disconnecting and reconnecting 
 15.31  residential ratepayers' service, all activities related to the 
 15.32  utilities' attempt to collect past due bills, utility working 
 15.33  capital costs, and any other administrative costs related to 
 15.34  inability to pay programs and initiatives; 
 15.35     (2) the potential for leveraging federal low-income energy 
 15.36  dollars to the state; and 
 16.1      (3) the impact of energy costs as a percentage of the total 
 16.2   income of a low-income residential customer. 
 16.3      (b) In determining the structure of the pilot utility 
 16.4   program, the commission shall: 
 16.5      (1) consult with advocates for and representatives of 
 16.6   low-income utility customers, administrators of energy 
 16.7   assistance and conservation programs, and utility 
 16.8   representatives; 
 16.9      (2) coordinate eligibility for the program with the state 
 16.10  and federal energy assistance program and low-income residential 
 16.11  energy programs, including weatherization programs; and 
 16.12     (3) evaluate comprehensive low-income programs offered by 
 16.13  utilities in other states. The purpose of the low-income 
 16.14  programs is to lower the percentage of income that low-income 
 16.15  households devote to energy bills, to increase customer 
 16.16  payments, and to lower the utility costs associated with 
 16.17  customer account collection activities.  In ordering low-income 
 16.18  programs, the commission may require public utilities to file 
 16.19  program evaluations, including the coordination of other 
 16.20  available low-income bill payment and conservation resources and 
 16.21  the effect of the program on: 
 16.22     (1) reducing the percentage of income that participating 
 16.23  households devote to energy bills; 
 16.24     (2) service disconnections; and 
 16.25     (3) customer payment behavior, utility collection costs, 
 16.26  arrearages, and bad debt.  
 16.27     (c) The commission shall implement at least one pilot 
 16.28  project by January 1, 1995, and shall allow a utility required 
 16.29  to implement a pilot project to recover the net costs of the 
 16.30  project in the utility's rates. 
 16.31     (d) The commission, in conjunction with the commissioner of 
 16.32  the department of public service and the commissioner of 
 16.33  economic security, shall review low-income rate programs and 
 16.34  shall report to the legislature by January 1, 1998.  The report 
 16.35  must include: 
 16.36     (1) the increase in federal energy assistance money 
 17.1   leveraged by the state as a result of this program; 
 17.2      (2) the effect of the program on low-income customer's 
 17.3   ability to pay energy costs; 
 17.4      (3) the effect of the program on utility customer bad debt 
 17.5   and arrearages; 
 17.6      (4) the effect of the program on the costs and numbers of 
 17.7   utility disconnections and reconnections and other costs 
 17.8   incurred by the utility in association with inability to pay 
 17.9   programs; 
 17.10     (5) the ability of the utility to recover the costs of the 
 17.11  low-income program without a general rate change; 
 17.12     (6) how other ratepayers have been affected by this 
 17.13  program; 
 17.14     (7) recommendations for continuing, eliminating, or 
 17.15  expanding the low-income pilot program; and 
 17.16     (8) how general revenue funds may be utilized in 
 17.17  conjunction with low-income programs. 
 17.18                             ARTICLE 5
 17.19                         INCENTIVE PAYMENTS
 17.20     Section 1.  Minnesota Statutes 2000, section 216C.41, 
 17.21  subdivision 3, is amended to read: 
 17.22     Subd. 3.  [ELIGIBILITY WINDOW.] Payments may be made under 
 17.23  this section only for electricity generated: 
 17.24     (1) from a qualified hydroelectric facility that is 
 17.25  operational and generating electricity before December 31, 
 17.26  2001 2002; or 
 17.27     (2) from a qualified wind energy conversion facility that 
 17.28  is operational and generating electricity before January 1, 2005.
 17.29     Sec. 2.  Minnesota Statutes 2000, section 216C.41, 
 17.30  subdivision 5, is amended to read: 
 17.31     Subd. 5.  [AMOUNT OF PAYMENT.] (a) An incentive payment is 
 17.32  based on the number of kilowatt hours of electricity generated. 
 17.33  The amount of the payment is 1.5 cents per kilowatt hour.  For 
 17.34  electricity generated by qualified wind energy conversion 
 17.35  facilities, the incentive payment under this section is limited 
 17.36  to no more than 100 megawatts of nameplate capacity.  During any 
 18.1   period in which qualifying claims for incentive payments exceed 
 18.2   100 megawatts of nameplate capacity, the payments must be made 
 18.3   to producers in the order in which the production capacity was 
 18.4   brought into production.  
 18.5      (b) Beginning January 1, 2002, the total size of a wind 
 18.6   energy conversion system under this section must be determined 
 18.7   according to this paragraph.  Unless the systems are 
 18.8   interconnected with different distribution systems, the 
 18.9   nameplate capacity of one wind energy conversion system must be 
 18.10  combined with the nameplate capacity of any other wind energy 
 18.11  conversion system that is: 
 18.12     (1) located within five miles of the wind energy conversion 
 18.13  system; 
 18.14     (2) constructed within the same calendar year as the wind 
 18.15  energy conversion system; and 
 18.16     (3) under common ownership. 
 18.17  In the case of a dispute, the commissioner of commerce shall 
 18.18  determine the total size of the system, and shall draw all 
 18.19  reasonable inferences in favor of combining the systems. 
 18.20     (c) In making a determination under paragraph (b), the 
 18.21  commissioner of commerce may determine that two wind energy 
 18.22  conversion systems are under common ownership when the 
 18.23  underlying ownership structure contains similar persons or 
 18.24  entities, even if the ownership shares differ between the two 
 18.25  systems.  Wind energy conversion systems are not under common 
 18.26  ownership solely because the same person or entity provided 
 18.27  equity financing for the systems. 
 18.28     Sec. 3.  Minnesota Statutes 2000, section 216C.41, is 
 18.29  amended by adding a subdivision to read: 
 18.30     Subd. 6.  [OWNERSHIP; FINANCING; CURE.] (a) For the 
 18.31  purposes of subdivision 1, paragraph (c), clause (2), a wind 
 18.32  energy conversion facility qualifies if it is owned at least 51 
 18.33  percent by one or more of any combination of the entities listed 
 18.34  in that clause. 
 18.35     (b) A subsequent owner of a qualified facility may continue 
 18.36  to receive the incentive payment for the duration of the 
 19.1   original payment period if the subsequent owner qualifies for 
 19.2   the incentive under subdivision 1. 
 19.3      (c) Nothing in this section may be construed to deny 
 19.4   incentive payment to an otherwise qualified facility that has 
 19.5   obtained debt or equity financing for construction or operation 
 19.6   as long as the ownership requirements of subdivision 1 and this 
 19.7   subdivision are met.  If, during the incentive payment period 
 19.8   for a qualified facility, the owner of the facility is in 
 19.9   default of a lending agreement and the lender takes possession 
 19.10  of and operates the facility and makes reasonable efforts to 
 19.11  transfer ownership of the facility to an entity other than the 
 19.12  lender, the lender may continue to receive the incentive payment 
 19.13  for electricity generated and sold by the facility for a period 
 19.14  not to exceed 18 months.  A lender who takes possession of a 
 19.15  facility shall notify the commissioner immediately on taking 
 19.16  possession and, at least quarterly, document efforts to transfer 
 19.17  ownership of the facility. 
 19.18     (d) If, during the incentive payment period, a qualified 
 19.19  facility loses the right to receive the incentive because of 
 19.20  changes in ownership, the facility may regain the right to 
 19.21  receive the incentive upon cure of the ownership structure that 
 19.22  resulted in the loss of eligibility and may reapply for the 
 19.23  incentive, but in no case may the payment period be extended 
 19.24  beyond the original ten-year limit. 
 19.25     (e) A subsequent or requalifying owner under paragraph (b)  
 19.26  or (d) retains the facility's original priority order for 
 19.27  incentive payments as long as the ownership structure 
 19.28  requalifies within two years from the date the facility became 
 19.29  unqualified or two years from the date a lender takes possession.
 19.30     Sec. 4.  [EFFECTIVE DATE.] 
 19.31     This article is effective the day following final enactment.
 19.32                             ARTICLE 6
 19.33                      DISTRIBUTION RELIABILITY
 19.34     Section 1.  [216B.81] [STANDARDS FOR DISTRIBUTION 
 19.35  UTILITIES.] 
 19.36     Subdivision 1.  [STANDARDS.] (a) The commission and each 
 20.1   cooperative electric association and municipal utility shall 
 20.2   adopt standards for safety, reliability, and service quality for 
 20.3   distribution utilities.  Standards for cooperative electric 
 20.4   associations and municipal utilities should be as consistent as 
 20.5   possible with the commission standards. 
 20.6      (b) Reliability standards must be based on the system 
 20.7   average interruption frequency index, system average 
 20.8   interruption duration index, and customer average interruption 
 20.9   duration index measurement indices.  Service quality standards 
 20.10  must specify, if technically and administratively feasible: 
 20.11     (1) average call center response time; 
 20.12     (2) customer disconnection rate; 
 20.13     (3) meter-reading frequency; 
 20.14     (4) complaint resolution response time; 
 20.15     (5) service extension request response time; 
 20.16     (6) recording of service and circuit interrupter data; 
 20.17     (7) summary reporting; 
 20.18     (8) historical reliability performance reporting; 
 20.19     (9) notices of interruptions of bulk power supply 
 20.20  facilities and other interruptions of power; and 
 20.21     (10) customer complaints. 
 20.22     (c) Minimum performance standards developed under this 
 20.23  section must treat similarly situated distribution systems 
 20.24  similarly and recognize differing characteristics of system 
 20.25  design and hardware. 
 20.26     (d) Electric distribution utilities shall comply with all 
 20.27  applicable governmental and industry standards required for the 
 20.28  safety, design, construction, and operation of electric 
 20.29  distribution facilities, including section 326.243. 
 20.30     Subd. 2.  [DEFINITIONS.] For the purpose of this section, 
 20.31  the terms defined in this subdivision have the meanings given 
 20.32  them.  
 20.33     (a) The "system average interruption frequency index" is 
 20.34  the average number of interruptions per customer per year.  It 
 20.35  is determined by dividing the total annual number of customer 
 20.36  interruptions by the average number of customers served during 
 21.1   the year.  
 21.2      (b) The "system average interruption duration index" is the 
 21.3   average customer-minutes of interruption per customer.  It is 
 21.4   determined by dividing the annual sum of customer-minutes of 
 21.5   interruption by the average number of customers served during 
 21.6   the year.  
 21.7      (c) The "customer average interruption duration index" is 
 21.8   the average customer-minutes of interruption per customer 
 21.9   interruption.  It approximates the average length of time 
 21.10  required to complete service restoration.  It is determined by 
 21.11  dividing the annual sum of all customer-minutes of interruption 
 21.12  durations by the annual number of customer interruptions.  
 21.13     Sec. 2.  [COST BENEFIT ANALYSIS.] 
 21.14     The commissioner of commerce shall provide an analysis of 
 21.15  the costs and benefits to consumers and utilities of the 
 21.16  provisions of section 216B.81, including any recommended changes 
 21.17  to those provisions, to the chairs of the house of 
 21.18  representatives and senate policy and finance committees with 
 21.19  jurisdiction over electric utility issues by February 1, 2003. 
 21.20     Sec. 3.  [EFFECTIVE DATE.] 
 21.21     Section 1 is effective July 1, 2001.  Section 2 is 
 21.22  effective the day following final enactment. 
 21.23                             ARTICLE 7
 21.24                       SITING AND ROUTING OF
 21.25                POWER PLANTS AND TRANSMISSION LINES
 21.26     Section 1.  Minnesota Statutes 2000, section 116C.52, 
 21.27  subdivision 4, is amended to read: 
 21.28     Subd. 4.  [HIGH VOLTAGE TRANSMISSION LINE.] "High voltage 
 21.29  transmission line" means a conductor of electric energy and 
 21.30  associated facilities designed for and capable of operation at a 
 21.31  nominal voltage of 200 100 kilovolts or more, except that the 
 21.32  board, by rule, may exempt lines pursuant to section 116C.57, 
 21.33  subdivision 5. 
 21.34     Sec. 2.  Minnesota Statutes 2000, section 116C.52, 
 21.35  subdivision 10, is amended to read: 
 21.36     Subd. 10.  [UTILITY.] "Utility" shall mean any entity 
 22.1   engaged or intending to engage in this state in the generation, 
 22.2   transmission or distribution of electric energy including, but 
 22.3   not limited to, a private investor owned utility, cooperatively 
 22.4   owned utility, and a public or municipally owned utility. 
 22.5      Sec. 3.  Minnesota Statutes 2000, section 116C.53, 
 22.6   subdivision 2, is amended to read: 
 22.7      Subd. 2.  [JURISDICTION.] The board is hereby given the 
 22.8   authority to provide for site and route selection for large 
 22.9   electric power facilities.  The board shall issue permits for 
 22.10  large electric power facilities in a timely fashion.  When the 
 22.11  public utilities commission has determined the need for the 
 22.12  project under section 216B.243 or 216B.2425, questions of need, 
 22.13  including size, type, and timing; alternative system 
 22.14  configurations; and voltage are not within the board's siting 
 22.15  and routing authority and must not be included in the scope of 
 22.16  environmental review conducted under sections 116C.51 to 116C.69.
 22.17     Sec. 4.  Minnesota Statutes 2000, section 116C.53, 
 22.18  subdivision 3, is amended to read: 
 22.19     Subd. 3.  [INTERSTATE ROUTES.] If a route is proposed in 
 22.20  two or more states, the board shall attempt to reach agreement 
 22.21  with affected states on the entry and exit points prior 
 22.22  to authorizing the construction of the designating a route.  The 
 22.23  board, in discharge of its duties pursuant to sections 116C.51 
 22.24  to 116C.69 may make joint investigations, hold joint hearings 
 22.25  within or without the state, and issue joint or concurrent 
 22.26  orders in conjunction or concurrence with any official or agency 
 22.27  of any state or of the United States.  The board may negotiate 
 22.28  and enter into any agreements or compacts with agencies of other 
 22.29  states, pursuant to any consent of Congress, for cooperative 
 22.30  efforts in certifying the construction, operation, and 
 22.31  maintenance of large electric power facilities in accord with 
 22.32  the purposes of sections 116C.51 to 116C.69 and for the 
 22.33  enforcement of the respective state laws regarding such 
 22.34  facilities. 
 22.35     Sec. 5.  Minnesota Statutes 2000, section 116C.57, 
 22.36  subdivision 1, is amended to read: 
 23.1      Subdivision 1.  [DESIGNATION OF SITES SUITABLE FOR SPECIFIC 
 23.2   FACILITIES; REPORTS SITE PERMIT.] A utility must apply to the 
 23.3   board in a form and manner prescribed by the board for 
 23.4   designation of a specific site for a specific size and type of 
 23.5   facility.  The application shall contain at least two proposed 
 23.6   sites.  In the event a utility proposes a site not included in 
 23.7   the board's inventory of study areas, the utility shall specify 
 23.8   the reasons for the proposal and shall make an evaluation of the 
 23.9   proposed site based upon the planning policies, criteria and 
 23.10  standards specified in the inventory.  Pursuant to sections 
 23.11  116C.57 to 116C.60, the board shall study and evaluate any site 
 23.12  proposed by a utility and any other site the board deems 
 23.13  necessary which was proposed in a manner consistent with rules 
 23.14  adopted by the board concerning the form, content, and 
 23.15  timeliness of proposals for alternate sites.  No site 
 23.16  designation shall be made in violation of the site selection 
 23.17  standards established in section 116C.55.  The board shall 
 23.18  indicate the reasons for any refusal and indicate changes in 
 23.19  size or type of facility necessary to allow site designation. 
 23.20  Within a year after the board's acceptance of a utility's 
 23.21  application, the board shall decide in accordance with the 
 23.22  criteria specified in section 116C.55, subdivision 2, the 
 23.23  responsibilities, procedures and considerations specified in 
 23.24  section 116C.57, subdivision 4, and the considerations in 
 23.25  chapter 116D which proposed site is to be designated.  The board 
 23.26  may extend for just cause the time limitation for its decision 
 23.27  for a period not to exceed six months.  When the board 
 23.28  designates a site, it shall issue a certificate of site 
 23.29  compatibility to the utility with any appropriate conditions.  
 23.30  The board shall publish a notice of its decision in the State 
 23.31  Register within 30 days of site designation.  No large electric 
 23.32  power generating plant shall be constructed except on a site 
 23.33  designated by the board. No person may construct a large 
 23.34  electric generating plant without a site permit from the board.  
 23.35  A large electric generating plant may be constructed only on a 
 23.36  site approved by the board.  The board must incorporate into one 
 24.1   proceeding the route selection for a high voltage transmission 
 24.2   line that is directly associated with and necessary to 
 24.3   interconnect the large electric generating plant to the 
 24.4   transmission system and whose need is certified as part of the 
 24.5   generating plant project by the public utilities commission.  
 24.6      Sec. 6.  Minnesota Statutes 2000, section 116C.57, 
 24.7   subdivision 2, is amended to read: 
 24.8      Subd. 2.  [DESIGNATION OF ROUTES; PROCEDURE ROUTE 
 24.9   PERMIT.] A utility shall apply to the board in a form and manner 
 24.10  prescribed by the board for a permit for the construction of a 
 24.11  high voltage transmission line.  The application shall contain 
 24.12  at least two proposed routes.  Pursuant to sections 116C.57 to 
 24.13  116C.60, the board shall study, and evaluate the type, design, 
 24.14  routing, right-of-way preparation and facility construction of 
 24.15  any route proposed in a utility's application and any other 
 24.16  route the board deems necessary which was proposed in a manner 
 24.17  consistent with rules adopted by the board concerning the form, 
 24.18  content, and timeliness of proposals for alternate routes 
 24.19  provided, however, that the board shall identify the alternative 
 24.20  routes prior to the commencement of public hearings thereon 
 24.21  pursuant to section 116C.58.  Within one year after the board's 
 24.22  acceptance of a utility's application, the board shall decide in 
 24.23  accordance with the criteria and standards specified in section 
 24.24  116C.55, subdivision 2, and the considerations specified in 
 24.25  section 116C.57, subdivision 4, which proposed route is to be 
 24.26  designated.  The board may extend for just cause the time 
 24.27  limitation for its decision for a period not to exceed 90 days.  
 24.28  When the board designates a route, it shall issue a permit for 
 24.29  the construction of a high voltage transmission line specifying 
 24.30  the type, design, routing, right-of-way preparation and facility 
 24.31  construction it deems necessary and with any other appropriate 
 24.32  conditions.  The board may order the construction of high 
 24.33  voltage transmission line facilities which are capable of 
 24.34  expansion in transmission capacity through multiple circuiting 
 24.35  or design modifications.  The board shall publish a notice of 
 24.36  its decision in the state register within 30 days of issuance of 
 25.1   the permit.  No high voltage transmission line shall be 
 25.2   constructed except on a route designated by the board, unless it 
 25.3   was exempted pursuant to subdivision 5. No person may construct 
 25.4   a high voltage transmission line without a route permit from the 
 25.5   board.  A high voltage transmission line may be constructed only 
 25.6   along a route approved by the board.  
 25.7      Sec. 7.  Minnesota Statutes 2000, section 116C.57, is 
 25.8   amended by adding a subdivision to read: 
 25.9      Subd. 2a.  [APPLICATION.] Any person seeking to construct a 
 25.10  large electric power generating plant or a high voltage 
 25.11  transmission line must apply to the board for a site or route 
 25.12  permit.  The application shall contain such information as the 
 25.13  board may require.  The applicant shall propose at least two 
 25.14  sites for a large electric power generating plant and two routes 
 25.15  for a high voltage transmission line.  The chair of the board 
 25.16  shall determine whether an application is complete and advise 
 25.17  the applicant of any deficiencies within ten days of receipt.  
 25.18  An application is not incomplete if information not in the 
 25.19  application can be obtained from the applicant during the first 
 25.20  phase of the process and that information is not essential for 
 25.21  notice and initial public meetings.  
 25.22     Sec. 8.  Minnesota Statutes 2000, section 116C.57, is 
 25.23  amended by adding a subdivision to read: 
 25.24     Subd. 2b.  [NOTICE OF APPLICATION.] Within 15 days after 
 25.25  submission of an application to the board, the applicant shall 
 25.26  publish notice of the application in a legal newspaper of 
 25.27  general circulation in each county in which the site or route is 
 25.28  proposed and send a copy of the application by certified mail to 
 25.29  any regional development commission, county, incorporated 
 25.30  municipality, and township in which any part of the site or 
 25.31  route is proposed.  Within the same 15 days, the applicant shall 
 25.32  also send a notice of the submission of the application and 
 25.33  description of the proposed project to each owner whose property 
 25.34  is on or adjacent to any of the proposed sites for the power 
 25.35  plant or along any of the proposed routes for the transmission 
 25.36  line.  The notice shall identify a location where a copy of the 
 26.1   application can be reviewed.  For the purpose of giving mailed 
 26.2   notice under this subdivision, owners shall be those shown on 
 26.3   the records of the county auditor or, in any county where tax 
 26.4   statements are mailed by the county treasurer, on the records of 
 26.5   the county treasurer; but other appropriate records may be used 
 26.6   for this purpose.  The failure to give mailed notice to a 
 26.7   property owner, or defects in the notice, shall not invalidate 
 26.8   the proceedings, provided a bona fide attempt to comply with 
 26.9   this subdivision has been made.  Within the same 15 days, the 
 26.10  applicant shall also send the same notice of the submission of 
 26.11  the application and description of the proposed project to those 
 26.12  persons who have requested to be placed on a list maintained by 
 26.13  the board for receiving notice of proposed large electric 
 26.14  generating power plants and high voltage transmission lines.  
 26.15     Sec. 9.  Minnesota Statutes 2000, section 116C.57, is 
 26.16  amended by adding a subdivision to read: 
 26.17     Subd. 2c.  [ENVIRONMENTAL REVIEW.] The board shall prepare 
 26.18  an environmental impact statement on each proposed large 
 26.19  electric generating plant or high voltage transmission line for 
 26.20  which a complete application has been submitted.  For any 
 26.21  project that has obtained a certificate of need from the public 
 26.22  utilities commission, the board shall not consider whether or 
 26.23  not the project is needed.  No other state environmental review 
 26.24  documents shall be required.  The board shall study and evaluate 
 26.25  any site or route proposed by an applicant and any other site or 
 26.26  route the board deems necessary that was proposed in a manner 
 26.27  consistent with rules adopted by the board concerning the form, 
 26.28  content, and timeliness of proposals for alternate sites or 
 26.29  routes.  
 26.30     Sec. 10.  Minnesota Statutes 2000, section 116C.57, is 
 26.31  amended by adding a subdivision to read: 
 26.32     Subd. 2d.  [PUBLIC HEARING.] The board shall hold a public 
 26.33  hearing on an application for a site permit for a large electric 
 26.34  power generating plant or a route permit for a high voltage 
 26.35  transmission line.  All hearings held for designating a site or 
 26.36  route shall be conducted by an administrative law judge from the 
 27.1   office of administrative hearings pursuant to the contested case 
 27.2   procedures of chapter 14.  Notice of the hearing shall be given 
 27.3   by the board at least ten days in advance but no earlier than 45 
 27.4   days prior to the commencement of the hearing.  Notice shall be 
 27.5   by publication in a legal newspaper of general circulation in 
 27.6   the county in which the public hearing is to be held and by 
 27.7   certified mail to chief executives of the regional development 
 27.8   commissions, counties, organized towns, townships, and the 
 27.9   incorporated municipalities in which a site or route is 
 27.10  proposed.  Any person may appear at the hearings and offer 
 27.11  testimony and exhibits without the necessity of intervening as a 
 27.12  formal party to the proceedings.  The administrative law judge 
 27.13  may allow any person to ask questions of other witnesses.  The 
 27.14  administrative law judge shall hold a portion of the hearing in 
 27.15  the area where the power plant or transmission line is proposed 
 27.16  to be located.  
 27.17     Sec. 11.  Minnesota Statutes 2000, section 116C.57, 
 27.18  subdivision 4, is amended to read: 
 27.19     Subd. 4.  [CONSIDERATIONS IN DESIGNATING SITES AND ROUTES.] 
 27.20  The board's site and route permit determinations must be guided 
 27.21  by the state's goals to conserve resources, minimize 
 27.22  environmental impacts, minimize human settlement and other land 
 27.23  use conflicts, and ensure the state's electric energy security 
 27.24  through efficient, cost-effective power supply and electric 
 27.25  transmission infrastructure.  To facilitate the study, research, 
 27.26  evaluation and designation of sites and routes, the board shall 
 27.27  be guided by, but not limited to, the 
 27.28  following responsibilities, procedures, and considerations: 
 27.29     (1) Evaluation of research and investigations relating to 
 27.30  the effects on land, water and air resources of large electric 
 27.31  power generating plants and high voltage transmission line 
 27.32  routes lines and the effects of water and air discharges and 
 27.33  electric and magnetic fields resulting from such facilities on 
 27.34  public health and welfare, vegetation, animals, materials and 
 27.35  aesthetic values, including base line studies, predictive 
 27.36  modeling, and monitoring of the water and air mass at proposed 
 28.1   and operating sites and routes, evaluation of new or improved 
 28.2   methods for minimizing adverse impacts of water and air 
 28.3   discharges and other matters pertaining to the effects of power 
 28.4   plants on the water and air environment; 
 28.5      (2) Environmental evaluation of sites and routes proposed 
 28.6   for future development and expansion and their relationship to 
 28.7   the land, water, air and human resources of the state; 
 28.8      (3) Evaluation of the effects of new electric power 
 28.9   generation and transmission technologies and systems related to 
 28.10  power plants designed to minimize adverse environmental effects; 
 28.11     (4) Evaluation of the potential for beneficial uses of 
 28.12  waste energy from proposed large electric power generating 
 28.13  plants; 
 28.14     (5) Analysis of the direct and indirect economic impact of 
 28.15  proposed sites and routes including, but not limited to, 
 28.16  productive agricultural land lost or impaired; 
 28.17     (6) Evaluation of adverse direct and indirect environmental 
 28.18  effects which that cannot be avoided should the proposed site 
 28.19  and route be accepted; 
 28.20     (7) Evaluation of alternatives to the applicant's proposed 
 28.21  site or route proposed pursuant to subdivisions 1 and 2; 
 28.22     (8) Evaluation of potential routes which that would use or 
 28.23  parallel existing railroad and highway rights-of-way; 
 28.24     (9) Evaluation of governmental survey lines and other 
 28.25  natural division lines of agricultural land so as to minimize 
 28.26  interference with agricultural operations; 
 28.27     (10) Evaluation of the future needs for additional high 
 28.28  voltage transmission lines in the same general area as any 
 28.29  proposed route, and the advisability of ordering the 
 28.30  construction of structures capable of expansion in transmission 
 28.31  capacity through multiple circuiting or design modifications; 
 28.32     (11) Evaluation of irreversible and irretrievable 
 28.33  commitments of resources should the proposed site or route be 
 28.34  approved; and 
 28.35     (12) Where When appropriate, consideration of problems 
 28.36  raised by other state and federal agencies and local entities. 
 29.1      (13) If the board's rules are substantially similar to 
 29.2   existing rules and regulations of a federal agency to which the 
 29.3   utility in the state is subject, the federal rules and 
 29.4   regulations shall must be applied by the board. 
 29.5      (14) No site or route shall be designated which violates 
 29.6   state agency rules. 
 29.7      Sec. 12.  Minnesota Statutes 2000, section 116C.57, is 
 29.8   amended by adding a subdivision to read: 
 29.9      Subd. 7.  [TIMING.] The board shall make a final decision 
 29.10  on an application within 60 days after receipt of the report of 
 29.11  the administrative law judge.  A final decision on the request 
 29.12  for a site permit or route permit shall be made within one year 
 29.13  after the chair's determination that an application is 
 29.14  complete.  The board may extend this time limit for up to three 
 29.15  months for just cause or upon agreement of the applicant.  
 29.16     Sec. 13.  Minnesota Statutes 2000, section 116C.57, is 
 29.17  amended by adding a subdivision to read: 
 29.18     Subd. 8.  [FINAL DECISION.] (a) No site permit shall be 
 29.19  issued in violation of the site selection standards and criteria 
 29.20  established in this section and in rules adopted by the board.  
 29.21  When the board designates a site, it shall issue a site permit 
 29.22  to the applicant with any appropriate conditions.  The board 
 29.23  shall publish a notice of its decision in the State Register 
 29.24  within 30 days of issuance of the site permit. 
 29.25     (b) No route permit shall be issued in violation of the 
 29.26  route selection standards and criteria established in this 
 29.27  section and in rules adopted by the board.  When the board 
 29.28  designates a route, it shall issue a permit for the construction 
 29.29  of a high voltage transmission line specifying the design, 
 29.30  routing, right-of-way preparation, and facility construction it 
 29.31  deems necessary, and with any other appropriate conditions.  The 
 29.32  board may order the construction of high voltage transmission 
 29.33  line facilities that are capable of expansion in transmission 
 29.34  capacity through multiple circuiting or design modifications.  
 29.35  The board shall publish a notice of its decision in the State 
 29.36  Register within 30 days of issuance of the permit.  
 30.1      Sec. 14.  [116C.575] [ALTERNATIVE REVIEW OF APPLICATIONS.] 
 30.2      Subdivision 1.  [ALTERNATIVE REVIEW.] An applicant who 
 30.3   seeks a site permit or route permit for one of the projects 
 30.4   identified in this section shall have the option of following 
 30.5   the procedures in this section rather than the procedures in 
 30.6   section 116C.57.  The applicant shall notify the chair at the 
 30.7   time the application is submitted which procedure the applicant 
 30.8   chooses to follow. 
 30.9      Subd. 2.  [APPLICABLE PROJECTS.] The requirements and 
 30.10  procedures in this section apply to the following projects:  
 30.11     (1) large electric power generating plants with a capacity 
 30.12  of less than 80 megawatts; 
 30.13     (2) large electric power generating plants that are fueled 
 30.14  by natural gas; 
 30.15     (3) high voltage transmission lines of between 100 and 200 
 30.16  kilovolts; 
 30.17     (4) high voltage transmission lines in excess of 200 
 30.18  kilovolts and less than five miles in length in Minnesota; 
 30.19     (5) high voltage transmission lines in excess of 200 
 30.20  kilovolts if at least 80 percent of the distance of the line in 
 30.21  Minnesota will be located along existing high voltage 
 30.22  transmission line right-of-way; 
 30.23     (6) a high voltage transmission line service extension to a 
 30.24  single customer between 200 and 300 kilovolts and less than ten 
 30.25  miles in length; and 
 30.26     (7) a high voltage transmission line rerouting to serve the 
 30.27  demand of a single customer when the rerouted line will be 
 30.28  located at least 80 percent on property owned or controlled by 
 30.29  the customer or the owner of the transmission line. 
 30.30     Subd. 3.  [APPLICATION.] The applicant for a site or route 
 30.31  permit for any of the projects listed in subdivision 2 who 
 30.32  chooses to follow these procedures shall submit information as 
 30.33  the board may require, but the applicant shall not be required 
 30.34  to propose a second site or route for the project.  The 
 30.35  applicant shall identify in the application any other sites or 
 30.36  routes that were rejected by the applicant and the board may 
 31.1   identify additional sites or routes to consider during the 
 31.2   processing of the application.  The chair of the board shall 
 31.3   determine whether an application is complete and advise the 
 31.4   applicant of any deficiencies.  
 31.5      Subd. 4.  [NOTICE OF APPLICATION.] Upon submission of an 
 31.6   application under this section, the applicant shall provide the 
 31.7   same notice as required by section 116C.57, subdivision 2b.  
 31.8      Subd. 5.  [ENVIRONMENTAL REVIEW.] For the projects 
 31.9   identified in subdivision 2 and following these procedures, the 
 31.10  board shall prepare an environmental assessment.  The 
 31.11  environmental assessment shall contain information on the human 
 31.12  and environmental impacts of the proposed project and other 
 31.13  sites or routes identified by the board and shall address 
 31.14  mitigating measures for all of the sites or routes considered.  
 31.15  The environmental assessment shall be the only state 
 31.16  environmental review document required to be prepared on the 
 31.17  project.  
 31.18     Subd. 6.  [PUBLIC HEARING.] The board shall hold a public 
 31.19  hearing in the area where the facility is proposed to be 
 31.20  located.  The board shall give notice of the public hearing in 
 31.21  the same manner as notice under section 116C.57, subdivision 
 31.22  2d.  The board shall conduct the public hearing under procedures 
 31.23  established by the board.  The applicant shall be present at the 
 31.24  hearing to present evidence and to answer questions.  The board 
 31.25  shall provide opportunity at the public hearing for any person 
 31.26  to present comments and to ask questions of the applicant and 
 31.27  board staff.  The board shall also afford interested persons an 
 31.28  opportunity to submit written comments into the record.  
 31.29     Subd. 7.  [TIMING.] The board shall make a final decision 
 31.30  on an application within 60 days after completion of the public 
 31.31  hearing.  A final decision on the request for a site permit or 
 31.32  route permit under this section shall be made within six months 
 31.33  after the chair's determination that an application is 
 31.34  complete.  The board may extend this time limit for up to three 
 31.35  months for just cause or upon agreement of the applicant. 
 31.36     Subd. 8.  [CONSIDERATIONS.] The considerations in section 
 32.1   116C.57, subdivision 4, shall apply to any projects subject to 
 32.2   this section.  
 32.3      Subd. 9.  [FINAL DECISION.] (a) No site permit shall be 
 32.4   issued in violation of the site selection standards and criteria 
 32.5   established in this section and in rules adopted by the board.  
 32.6   When the board designates a site, it shall issue a site permit 
 32.7   to the applicant with any appropriate conditions.  The board 
 32.8   shall publish a notice of its decision in the State Register 
 32.9   within 30 days of issuance of the site permit. 
 32.10     (b) No route designation shall be made in violation of the 
 32.11  route selection standards and criteria established in this 
 32.12  section and in rules adopted by the board.  When the board 
 32.13  designates a route, it shall issue a permit for the construction 
 32.14  of a high voltage transmission line specifying the design, 
 32.15  routing, right-of-way preparation, and facility construction it 
 32.16  deems necessary and with any other appropriate conditions.  The 
 32.17  board may order the construction of high voltage transmission 
 32.18  line facilities that are capable of expansion in transmission 
 32.19  capacity through multiple circuiting or design modifications.  
 32.20  The board shall publish a notice of its decision in the State 
 32.21  Register within 30 days of issuance of the permit. 
 32.22     Sec. 15.  [116C.576] [LOCAL REVIEW OF APPLICATIONS.] 
 32.23     Subdivision 1.  [LOCAL REVIEW.] (a) Notwithstanding the 
 32.24  requirements of sections 116C.57 and 116C.575, an applicant who 
 32.25  seeks a site or route permit for one of the projects identified 
 32.26  in this section shall have the option of applying to those local 
 32.27  units of government that have jurisdiction over the site or 
 32.28  route for approval to build the project.  If local approval is 
 32.29  granted, a site or route permit is not required from the board.  
 32.30  If the applicant files an application with the board, the 
 32.31  applicant shall be deemed to have waived its right to seek local 
 32.32  approval of the project.  
 32.33     (b) A local unit of government with jurisdiction over a 
 32.34  project identified in this section to whom an applicant has 
 32.35  applied for approval to build the project may request the board 
 32.36  to assume jurisdiction and make a decision on a site or route 
 33.1   permit under the applicable provisions of sections 116C.52 to 
 33.2   116C.69.  A local unit of government must file the request with 
 33.3   the board within 60 days after an application for the project 
 33.4   has been filed with any one local unit of government.  If one of 
 33.5   the local units of government with jurisdiction over the project 
 33.6   requests the board to assume jurisdiction, jurisdiction over the 
 33.7   project transfers to the board.  If the local units of 
 33.8   government maintain jurisdiction over the project, the board 
 33.9   shall select the appropriate local unit of government to be the 
 33.10  responsible governmental unit to conduct environmental review of 
 33.11  the project.  
 33.12     Subd. 2.  [APPLICABLE PROJECTS.] Applicants may seek 
 33.13  approval from local units of government to construct the 
 33.14  following projects:  
 33.15     (1) large electric power generating plants with a capacity 
 33.16  of less than 80 megawatts; 
 33.17     (2) large electric power generating plants of any size that 
 33.18  burn natural gas and are intended to be a peaking plant; 
 33.19     (3) high voltage transmission lines of between 100 and 200 
 33.20  kilovolts; 
 33.21     (4) substations with a voltage designed for and capable of 
 33.22  operation at a nominal voltage of 100 kilovolts or more; 
 33.23     (5) a high voltage transmission line service extension to a 
 33.24  single customer between 200 and 300 kilovolts and less than ten 
 33.25  miles in length; and 
 33.26     (6) a high voltage transmission line rerouting to serve the 
 33.27  demand of a single customer when the rerouted line will be 
 33.28  located at least 80 percent on property owned or controlled by 
 33.29  the customer or the owner of the transmission line. 
 33.30     Subd. 3.  [NOTICE OF APPLICATION.] Within ten days of 
 33.31  submission of an application to a local unit of government for 
 33.32  approval of an eligible project, the applicant shall notify the 
 33.33  board that the applicant has elected to seek local approval of 
 33.34  the proposed project.  
 33.35     Sec. 16.  [116C.577] [EMERGENCY PERMIT.] 
 33.36     (a) Any utility whose electric power system requires the 
 34.1   immediate construction of a large electric power generating 
 34.2   plant or high voltage transmission line due to a major 
 34.3   unforeseen event may apply to the board for an emergency permit 
 34.4   after providing notice in writing to the public utilities 
 34.5   commission of the major unforeseen event and the need for 
 34.6   immediate construction.  The permit must be issued in a timely 
 34.7   manner, no later than 195 days after the board's acceptance of 
 34.8   the application and upon a finding by the board that (1) a 
 34.9   demonstrable emergency exists, (2) the emergency requires 
 34.10  immediate construction, and (3) adherence to the procedures and 
 34.11  time schedules specified in section 116C.57 would jeopardize the 
 34.12  utility's electric power system or would jeopardize the 
 34.13  utility's ability to meet the electric needs of its customers in 
 34.14  an orderly and timely manner. 
 34.15     (b) A public hearing to determine if an emergency exists 
 34.16  must be held within 90 days of the application.  The board, 
 34.17  after notice and hearing, shall adopt rules specifying the 
 34.18  criteria for emergency certification.  
 34.19     Sec. 17.  Minnesota Statutes 2000, section 116C.58, is 
 34.20  amended to read: 
 34.21     116C.58 [PUBLIC HEARINGS; NOTICE ANNUAL HEARING.] 
 34.22     The board shall hold an annual public hearing at a time and 
 34.23  place prescribed by rule in order to afford interested persons 
 34.24  an opportunity to be heard regarding its inventory of study 
 34.25  areas and any other aspects of the board's activities and duties 
 34.26  or policies specified in sections 116C.51 to 116C.69.  The board 
 34.27  shall hold at least one public hearing in each county where a 
 34.28  site or route is being considered for designation pursuant to 
 34.29  section 116C.57.  Notice and agenda of public hearings and 
 34.30  public meetings of the board held in each county shall be given 
 34.31  by the board at least ten days in advance but no earlier than 45 
 34.32  days prior to such hearings or meetings.  Notice shall be by 
 34.33  publication in a legal newspaper of general circulation in the 
 34.34  county in which the public hearing or public meeting is to be 
 34.35  held and by certified mailed notice to chief executives of the 
 34.36  regional development commissions, counties, organized towns and 
 35.1   the incorporated municipalities in which a site or route is 
 35.2   proposed.  All hearings held for designating a site or route or 
 35.3   for exempting a route shall be conducted by an administrative 
 35.4   law judge from the office of administrative hearings pursuant to 
 35.5   the contested case procedures of chapter 14.  Any person may 
 35.6   appear at the hearings and present testimony and exhibits and 
 35.7   may question witnesses without the necessity of intervening as a 
 35.8   formal party to the proceedings any matters relating to the 
 35.9   siting of large electric generating power plants and routing of 
 35.10  high voltage transmission lines.  At the meeting, the board 
 35.11  shall advise the public of the permits issued by the board in 
 35.12  the past year.  The board shall provide at least ten days but no 
 35.13  more than 45 days' notice of the annual meeting by mailing 
 35.14  notice to those persons who have requested notice and by 
 35.15  publication in the EQB Monitor. 
 35.16     Sec. 18.  Minnesota Statutes 2000, section 116C.59, 
 35.17  subdivision 1, is amended to read: 
 35.18     Subdivision 1.  [ADVISORY TASK FORCE.] The board may 
 35.19  appoint one or more advisory task forces to assist it in 
 35.20  carrying out its duties.  Task forces appointed to evaluate 
 35.21  sites or routes considered for designation shall be comprised of 
 35.22  as many persons as may be designated by the board, but at least 
 35.23  one representative from each of the following:  Regional 
 35.24  development commissions, counties and municipal corporations and 
 35.25  one town board member from each county in which a site or route 
 35.26  is proposed to be located.  No officer, agent, or employee of a 
 35.27  utility shall serve on an advisory task force.  Reimbursement 
 35.28  for expenses incurred shall be made pursuant to the rules 
 35.29  governing state employees.  The task forces expire as provided 
 35.30  in section 15.059, subdivision 6.  At the time the task force is 
 35.31  appointed, the board shall specify the charge to the task 
 35.32  force.  The task force shall expire upon completion of its 
 35.33  charge, upon designation by the board of alternative sites or 
 35.34  routes to be included in the environmental impact statement, or 
 35.35  upon the specific date identified by the board in the charge, 
 35.36  whichever occurs first.  
 36.1      Sec. 19.  Minnesota Statutes 2000, section 116C.59, 
 36.2   subdivision 4, is amended to read: 
 36.3      Subd. 4.  [SCIENTIFIC ADVISORY TASK FORCE.] The board may 
 36.4   appoint one or more advisory task forces composed of technical 
 36.5   and scientific experts to conduct research and make 
 36.6   recommendations concerning generic issues such as health and 
 36.7   safety, underground routes, double circuiting and long-range 
 36.8   route and site planning.  Reimbursement for expenses incurred 
 36.9   shall be made pursuant to the rules governing reimbursement of 
 36.10  state employees.  The task forces expire as provided in section 
 36.11  15.059, subdivision 6.  The time allowed for completion of a 
 36.12  specific site or route procedure may not be extended to await 
 36.13  the outcome of these generic investigations.  
 36.14     Sec. 20.  Minnesota Statutes 2000, section 116C.60, is 
 36.15  amended to read: 
 36.16     116C.60 [PUBLIC MEETINGS; TRANSCRIPT OF PROCEEDINGS; 
 36.17  WRITTEN RECORDS.] 
 36.18     Meetings of the board, including hearings, shall be open to 
 36.19  the public.  Minutes shall be kept of board meetings and a 
 36.20  complete record of public hearings shall be kept.  All books, 
 36.21  records, files, and correspondence of the board shall be 
 36.22  available for public inspection at any reasonable time.  The 
 36.23  council board shall also be subject to chapter 13D. 
 36.24     Sec. 21.  Minnesota Statutes 2000, section 116C.61, 
 36.25  subdivision 1, is amended to read: 
 36.26     Subdivision 1.  [REGIONAL, COUNTY AND LOCAL ORDINANCES, 
 36.27  RULES, REGULATIONS; PRIMARY RESPONSIBILITY AND REGULATION OF 
 36.28  SITE DESIGNATION, IMPROVEMENT AND USE.] To assure the paramount 
 36.29  and controlling effect of the provisions herein over other state 
 36.30  agencies, regional, county and local governments, and special 
 36.31  purpose government districts, the issuance of a certificate of 
 36.32  site permit compatibility or transmission line 
 36.33  construction route permit and subsequent purchase and use of 
 36.34  such site or route locations for large electric power generating 
 36.35  plant and high voltage transmission line purposes shall be the 
 36.36  sole site or route approval required to be obtained by the 
 37.1   utility.  Such certificate or permit shall supersede and preempt 
 37.2   all zoning, building, or land use rules, regulations, or 
 37.3   ordinances promulgated by regional, county, local and special 
 37.4   purpose government. 
 37.5      Sec. 22.  Minnesota Statutes 2000, section 116C.61, 
 37.6   subdivision 3, is amended to read: 
 37.7      Subd. 3.  [STATE AGENCY PARTICIPATION.] State agencies 
 37.8   authorized to issue permits required for construction or 
 37.9   operation of large electric power generating plants or high 
 37.10  voltage transmission lines shall participate in and present the 
 37.11  position of the agency during routing and siting at public 
 37.12  hearings and all other activities of the board on specific site 
 37.13  or route designations and design considerations of the board, 
 37.14  which position and shall clearly state whether the site or route 
 37.15  being considered for designation or permit and other design 
 37.16  matters under consideration for approval for a certain size and 
 37.17  type of facility will be in compliance with state agency 
 37.18  standards, rules or policies. 
 37.19     Sec. 23.  Minnesota Statutes 2000, section 116C.62, is 
 37.20  amended to read: 
 37.21     116C.62 [IMPROVEMENT OF SITES AND ROUTES.] 
 37.22     Utilities which that have acquired a site or route in 
 37.23  accordance with sections 116C.51 to 116C.69 may proceed to 
 37.24  construct or improve the site or route for the intended purposes 
 37.25  at any time, subject to section 116C.61, subdivision 2, provided 
 37.26  that if the construction and improvement commences more than has 
 37.27  not commenced within four years after a certificate or permit 
 37.28  for the site or route has been issued, then the utility must 
 37.29  certify to the board that the site or route continues to meet 
 37.30  the conditions upon which the certificate of site compatibility 
 37.31  or transmission line construction or route permit was issued. 
 37.32     Sec. 24.  Minnesota Statutes 2000, section 116C.64, is 
 37.33  amended to read: 
 37.34     116C.64 [FAILURE TO ACT.] 
 37.35     If the board fails to act within the times specified in 
 37.36  section 116C.57, the applicant or any affected utility person 
 38.1   may seek an order of the district court requiring the board to 
 38.2   designate or refuse to designate a site or route. 
 38.3      Sec. 25.  Minnesota Statutes 2000, section 116C.645, is 
 38.4   amended to read: 
 38.5      116C.645 [REVOCATION OR SUSPENSION.] 
 38.6      A site certificate or construction route permit may be 
 38.7   revoked or suspended by the board after adequate notice of the 
 38.8   alleged grounds for revocation or suspension and a full and fair 
 38.9   hearing in which the affected utility has an opportunity to 
 38.10  confront any witness and respond to any evidence against it and 
 38.11  to present rebuttal or mitigating evidence upon a finding by the 
 38.12  board of: 
 38.13     (1) Any false statement knowingly made in the application 
 38.14  or in accompanying statements or studies required of the 
 38.15  applicant, if a true statement would have warranted a change in 
 38.16  the board's findings; 
 38.17     (2) Failure to comply with material conditions of the site 
 38.18  certificate or construction permit, or failure to maintain 
 38.19  health and safety standards; or 
 38.20     (3) Any material violation of the provisions of sections 
 38.21  116C.51 to 116C.69, any rule promulgated pursuant thereto, or 
 38.22  any order of the board. 
 38.23     Sec. 26.  Minnesota Statutes 2000, section 116C.65, is 
 38.24  amended to read: 
 38.25     116C.65 [JUDICIAL REVIEW.] 
 38.26     Any utility applicant, party or person aggrieved by the 
 38.27  issuance of a certificate site or route permit or emergency 
 38.28  certificate of site compatibility or transmission line 
 38.29  construction permit from the board or a certification of 
 38.30  continuing suitability filed by a utility with the board or by a 
 38.31  final order in accordance with any rules promulgated by the 
 38.32  board, may appeal to the court of appeals in accordance with 
 38.33  chapter 14.  The appeal shall be filed within 60 30 days after 
 38.34  the publication in the State Register of notice of the issuance 
 38.35  of the certificate or permit by the board or certification filed 
 38.36  with the board or the filing of any final order by the board.  
 39.1      Sec. 27.  Minnesota Statutes 2000, section 116C.66, is 
 39.2   amended to read: 
 39.3      116C.66 [RULES.] 
 39.4      The board, in order to give effect to the purposes of 
 39.5   sections 116C.51 to 116C.69, shall prior to July 1, 1978, may 
 39.6   adopt rules consistent with sections 116C.51 to 116C.69, 
 39.7   including promulgation of site and route designation criteria, 
 39.8   the description of the information to be furnished by the 
 39.9   utilities, establishment of minimum guidelines for public 
 39.10  participation in the development, revision, and enforcement of 
 39.11  any rule, plan or program established by the board, procedures 
 39.12  for the revocation or suspension of a construction site or route 
 39.13  permit or a certificate of site compatibility, and the procedure 
 39.14  and timeliness for proposing alternative routes and sites, and 
 39.15  route exemption criteria and procedures.  No rule adopted by the 
 39.16  board shall grant priority to state-owned wildlife management 
 39.17  areas over agricultural lands in the designation of route 
 39.18  avoidance areas.  The provisions of chapter 14 shall apply to 
 39.19  the appeal of rules adopted by the board to the same extent as 
 39.20  it applies to review of rules adopted by any other agency of 
 39.21  state government. 
 39.22     The chief administrative law judge shall, prior to January 
 39.23  1, 1978, adopt procedural rules for public hearings relating to 
 39.24  the site and route designation permit process and to the route 
 39.25  exemption process.  The rules shall attempt to maximize citizen 
 39.26  participation in these processes consistent with the time limits 
 39.27  for board decision established in sections 116C.57, subdivision 
 39.28  8, and 116C.575, subdivision 7. 
 39.29     Sec. 28.  Minnesota Statutes 2000, section 116C.69, is 
 39.30  amended to read: 
 39.31     116C.69 [BIENNIAL REPORT; APPLICATION FEES; APPROPRIATION; 
 39.32  FUNDING.] 
 39.33     Subdivision 1.  [BIENNIAL REPORT.] Before November 15 of 
 39.34  each even-numbered year the board shall prepare and submit to 
 39.35  the legislature a report of its operations, activities, findings 
 39.36  and recommendations concerning sections 116C.51 to 116C.69.  The 
 40.1   report shall also contain information on the board's biennial 
 40.2   expenditures, its proposed budget for the following biennium, 
 40.3   and the amounts paid in certificate and permit application fees 
 40.4   pursuant to subdivisions 2 and 2a and in assessments pursuant to 
 40.5   subdivision 3 this section.  The proposed budget for the 
 40.6   following biennium shall be subject to legislative review. 
 40.7      Subd. 2.  [SITE APPLICATION FEE.] Every applicant for a 
 40.8   site certificate permit shall pay to the board a fee in an 
 40.9   amount equal to $500 for each $1,000,000 of production plant 
 40.10  investment in the proposed installation as defined in the 
 40.11  Federal Power Commission Uniform System of Accounts.  The board 
 40.12  shall specify the time and manner of payment of the fee.  If any 
 40.13  single payment requested by the board is in excess of 25 percent 
 40.14  of the total estimated fee, the board shall show that the excess 
 40.15  is reasonably necessary.  The applicant shall pay within 30 days 
 40.16  of notification any additional fees reasonably necessary for 
 40.17  completion of the site evaluation and designation process by the 
 40.18  board.  In no event shall the total fees required of the 
 40.19  applicant under this subdivision exceed an amount equal to 0.001 
 40.20  of said production plant investment ($1,000 for each 
 40.21  $1,000,000).  All money received pursuant to this subdivision 
 40.22  shall be deposited in a special account.  Money in the account 
 40.23  is appropriated to the board to pay expenses incurred in 
 40.24  processing applications for certificates site permits in 
 40.25  accordance with sections 116C.51 to 116C.69 and in the event the 
 40.26  expenses are less than the fee paid, to refund the excess to the 
 40.27  applicant.  
 40.28     Subd. 2a.  [ROUTE APPLICATION FEE.] Every applicant for a 
 40.29  transmission line construction route permit shall pay to the 
 40.30  board a base fee of $35,000 plus a fee in an amount equal to 
 40.31  $1,000 per mile length of the longest proposed route.  The board 
 40.32  shall specify the time and manner of payment of the fee.  If any 
 40.33  single payment requested by the board is in excess of 25 percent 
 40.34  of the total estimated fee, the board shall show that the excess 
 40.35  is reasonably necessary.  In the event the actual cost of 
 40.36  processing an application up to the board's final decision to 
 41.1   designate a route exceeds the above fee schedule, the board may 
 41.2   assess the applicant any additional fees necessary to cover the 
 41.3   actual costs, not to exceed an amount equal to $500 per mile 
 41.4   length of the longest proposed route.  All money received 
 41.5   pursuant to this subdivision shall be deposited in a special 
 41.6   account.  Money in the account is appropriated to the board to 
 41.7   pay expenses incurred in processing applications for 
 41.8   construction route permits in accordance with sections 116C.51 
 41.9   to 116C.69 and in the event the expenses are less than the fee 
 41.10  paid, to refund the excess to the applicant.  
 41.11     Subd. 3.  [FUNDING; ASSESSMENT.] The board shall finance 
 41.12  its base line studies, general environmental studies, 
 41.13  development of criteria, inventory preparation, monitoring of 
 41.14  conditions placed on site certificates and construction route 
 41.15  permits, and all other work, other than specific site and route 
 41.16  designation, from an assessment made quarterly, at least 30 days 
 41.17  before the start of each quarter, by the board against all 
 41.18  utilities with annual retail kilowatt-hour sales greater than 
 41.19  4,000,000 kilowatt-hours in the previous calendar year.  
 41.20     Each share shall be determined as follows:  (1) the ratio 
 41.21  that the annual retail kilowatt-hour sales in the state of each 
 41.22  utility bears to the annual total retail kilowatt-hour sales in 
 41.23  the state of all these utilities, multiplied by 0.667, plus (2) 
 41.24  the ratio that the annual gross revenue from retail 
 41.25  kilowatt-hour sales in the state of each utility bears to the 
 41.26  annual total gross revenues from retail kilowatt-hour sales in 
 41.27  the state of all these utilities, multiplied by 0.333, as 
 41.28  determined by the board.  The assessment shall be credited to 
 41.29  the special revenue fund and shall be paid to the state treasury 
 41.30  within 30 days after receipt of the bill, which shall constitute 
 41.31  notice of said assessment and demand of payment thereof.  The 
 41.32  total amount which may be assessed to the several utilities 
 41.33  under authority of this subdivision shall not exceed the sum of 
 41.34  the annual budget of the board for carrying out the purposes of 
 41.35  this subdivision.  The assessment for the second quarter of each 
 41.36  fiscal year shall be adjusted to compensate for the amount by 
 42.1   which actual expenditures by the board for the preceding fiscal 
 42.2   year were more or less than the estimated expenditures 
 42.3   previously assessed. 
 42.4      Sec. 29.  Minnesota Statutes 2000, section 216B.2421, 
 42.5   subdivision 2, is amended to read: 
 42.6      Subd. 2.  [LARGE ENERGY FACILITY.] "Large energy facility" 
 42.7   means: 
 42.8      (1) any electric power generating plant or combination of 
 42.9   plants at a single site with a combined capacity of 80,000 
 42.10  kilowatts or more, or any facility of 50,000 kilowatts or more 
 42.11  which requires oil, natural gas, or natural gas liquids as a 
 42.12  fuel and for which an installation permit has not been applied 
 42.13  for by May 19, 1977 pursuant to Minn. Reg. APC 3(a) and 
 42.14  transmission lines directly associated with the plant that are 
 42.15  necessary to interconnect the plant to the transmission system; 
 42.16     (2) any high voltage transmission line with a capacity of 
 42.17  200 kilovolts or more and with more than 50 miles of its length 
 42.18  in Minnesota; or, 
 42.19     (3) any high voltage transmission line with a capacity of 
 42.20  300 100 kilovolts or more with more than 25 ten miles of its 
 42.21  length in Minnesota or that crosses a state line; 
 42.22     (3) (4) any pipeline greater than six inches in diameter 
 42.23  and having more than 50 miles of its length in Minnesota used 
 42.24  for the transportation of coal, crude petroleum or petroleum 
 42.25  fuels or oil or their derivatives; 
 42.26     (4) (5) any pipeline for transporting natural or synthetic 
 42.27  gas at pressures in excess of 200 pounds per square inch with 
 42.28  more than 50 miles of its length in Minnesota; 
 42.29     (5) (6) any facility designed for or capable of storing on 
 42.30  a single site more than 100,000 gallons of liquefied natural gas 
 42.31  or synthetic gas; 
 42.32     (6) (7) any underground gas storage facility requiring 
 42.33  permit pursuant to section 103I.681; 
 42.34     (7) (8) any nuclear fuel processing or nuclear waste 
 42.35  storage or disposal facility; and 
 42.36     (8) (9) any facility intended to convert any material into 
 43.1   any other combustible fuel and having the capacity to process in 
 43.2   excess of 75 tons of the material per hour. 
 43.3      Sec. 30.  [216B.2425] [STATE TRANSMISSION PLAN.] 
 43.4      Subdivision 1.  [LIST.] The commission shall maintain a 
 43.5   list of certified high voltage transmission line projects. 
 43.6      Subd. 2.  [LIST DEVELOPMENT.] (a) By November 1 of each 
 43.7   odd-numbered year, each public utility, municipal utility, and 
 43.8   cooperative electric association, or the generation and 
 43.9   transmission organization that serves each utility or 
 43.10  association, that owns or operates electric transmission lines 
 43.11  in Minnesota shall jointly or individually submit a transmission 
 43.12  projects report to the commission.  The report must: 
 43.13     (1) list specific present and reasonably foreseeable future 
 43.14  inadequacies in the transmission system in Minnesota; 
 43.15     (2) identify alternative means of addressing each 
 43.16  inadequacy listed; 
 43.17     (3) identify general economic, environmental, and social 
 43.18  issues associated with each alternative; and 
 43.19     (4) provide a summary of public input the utilities and 
 43.20  associations have gathered related to the list of inadequacies 
 43.21  and the role of local government officials and other interested 
 43.22  persons in assisting to develop the list and analyze 
 43.23  alternatives. 
 43.24     (b) To meet the requirements of this subdivision, entities 
 43.25  may rely on available information and analysis developed by a 
 43.26  regional transmission organization or any subgroup of a regional 
 43.27  transmission organization and may develop and include additional 
 43.28  information as necessary.  
 43.29     Subd. 3.  [COMMISSION APPROVAL.] By June 1 of each 
 43.30  even-numbered year, the commission shall adopt a state 
 43.31  transmission project list and shall certify, certify as 
 43.32  modified, or deny certification of the projects proposed under 
 43.33  subdivision 2.  The commission may only certify a project that 
 43.34  is a high voltage transmission line as defined in section 
 43.35  216B.2421, subdivision 2, that the commission finds is: 
 43.36     (1) necessary to maintain or enhance the reliability of 
 44.1   electric service to Minnesota consumers; 
 44.2      (2) needed, applying the criteria in section 216B.241, 
 44.3   subdivision 3; and 
 44.4      (3) in the public interest, taking into account electric 
 44.5   energy system needs and economic, environmental, and social 
 44.6   interests affected by the project. 
 44.7      Subd. 4.  [LIST; EFFECT.] Certification of a project as a 
 44.8   priority electric transmission project satisfies section 
 44.9   216B.243.  A certified project on which construction has not 
 44.10  begun more than six years after being placed on the list, must 
 44.11  be reapproved by the commission. 
 44.12     Subd. 5.  [TRANSMISSION INVENTORY.] The department of 
 44.13  commerce shall create, maintain, and update annually an 
 44.14  inventory of transmission lines in the state.  
 44.15     Subd. 6.  [EXCLUSION.] This section does not apply to any 
 44.16  transmission line proposal that has been approved, or was 
 44.17  pending before a local unit of government, the environmental 
 44.18  quality board, or the public utilities commission on August 1, 
 44.19  2001.  
 44.20     Sec. 31.  Minnesota Statutes 2000, section 216B.243, 
 44.21  subdivision 3, is amended to read: 
 44.22     Subd. 3.  [SHOWING REQUIRED FOR CONSTRUCTION.] No proposed 
 44.23  large energy facility shall be certified for construction unless 
 44.24  the applicant can show that demand for electricity cannot be met 
 44.25  more cost-effectively through energy conservation and 
 44.26  load-management measures and unless the applicant has otherwise 
 44.27  justified its need.  In assessing need, the commission shall 
 44.28  evaluate: 
 44.29     (1) the accuracy of the long-range energy demand forecasts 
 44.30  on which the necessity for the facility is based; 
 44.31     (2) the effect of existing or possible energy conservation 
 44.32  programs under sections 216C.05 to 216C.30 and this section or 
 44.33  other federal or state legislation on long-term energy demand; 
 44.34     (3) the relationship of the proposed facility to overall 
 44.35  state energy needs, as described in the most recent state energy 
 44.36  policy and conservation report prepared under section 216C.18; 
 45.1      (4) promotional activities that may have given rise to the 
 45.2   demand for this facility; 
 45.3      (5) socially beneficial uses of the output benefits of this 
 45.4   facility, including its uses to protect or enhance environmental 
 45.5   quality, and to increase reliability of energy supply in 
 45.6   Minnesota and the region; 
 45.7      (6) the effects of the facility in inducing future 
 45.8   development; 
 45.9      (7) (6) possible alternatives for satisfying the energy 
 45.10  demand or transmission needs including but not limited to 
 45.11  potential for increased efficiency and upgrading of existing 
 45.12  energy generation and transmission facilities, load management 
 45.13  programs, and distributed generation; 
 45.14     (8) (7) the policies, rules, and regulations of other state 
 45.15  and federal agencies and local governments; and 
 45.16     (9) (8) any feasible combination of energy conservation 
 45.17  improvements, required under section 216B.241, that can (i) 
 45.18  replace part or all of the energy to be provided by the proposed 
 45.19  facility, and (ii) compete with it economically. 
 45.20     Sec. 32.  Minnesota Statutes 2000, section 216B.243, 
 45.21  subdivision 4, is amended to read: 
 45.22     Subd. 4.  [APPLICATION FOR CERTIFICATE; HEARING.] Any 
 45.23  person proposing to construct a large energy facility shall 
 45.24  apply for a certificate of need prior to construction of the 
 45.25  facility applying for a site or route permit under sections 
 45.26  116C.51 to 116C.69 or construction of the facility.  The 
 45.27  application shall be on forms and in a manner established by the 
 45.28  commission.  In reviewing each application the commission shall 
 45.29  hold at least one public hearing pursuant to chapter 14.  The 
 45.30  public hearing shall be held at a location and hour reasonably 
 45.31  calculated to be convenient for the public.  An objective of the 
 45.32  public hearing shall be to obtain public opinion on the 
 45.33  necessity of granting a certificate of need.  The commission 
 45.34  shall designate a commission employee whose duty shall be to 
 45.35  facilitate citizen participation in the hearing process.  If the 
 45.36  commission and the environmental quality board determine that a 
 46.1   joint hearing on siting and need under this subdivision and 
 46.2   section 116C.57, subdivision 2d, is feasible, more efficient, 
 46.3   and may further the public interest, a joint hearing under those 
 46.4   subdivisions may be held. 
 46.5      Sec. 33.  Minnesota Statutes 2000, section 216B.243, 
 46.6   subdivision 8, is amended to read: 
 46.7      Subd. 8.  [EXEMPTIONS.] This section does not apply to: 
 46.8      (1) cogeneration or small power production facilities as 
 46.9   defined in the Federal Power Act, United States Code, title 16, 
 46.10  sections 796(18)(A) and 796(17)(A), and having a combined 
 46.11  capacity at a single site of less than 80,000 kilowatts or to 
 46.12  plants or facilities for the production of ethanol or fuel 
 46.13  alcohol nor in any case where the commission shall determine 
 46.14  after being advised by the attorney general that its application 
 46.15  has been preempted by federal law; 
 46.16     (2) a high voltage transmission line proposed primarily to 
 46.17  distribute electricity to serve the demand of a single customer 
 46.18  at a single location, unless the applicant opts to request that 
 46.19  the commission determine need under this section or section 
 46.20  216B.2425; 
 46.21     (3) the upgrade to a higher voltage of an existing 
 46.22  transmission line that serves the demand of a single customer 
 46.23  that primarily uses existing rights-of-way, unless the applicant 
 46.24  opts to request that the commission determine need under this 
 46.25  section or section 216B.2425; 
 46.26     (4) conversion of the fuel source of an existing electric 
 46.27  generating plant to using natural gas; or 
 46.28     (5) modification of an existing electric generating plant 
 46.29  to increase efficiency, as long as the capacity of the plant is 
 46.30  not increased more than ten percent or more than 100 megawatts, 
 46.31  whichever is greater.  
 46.32     Sec. 34.  Minnesota Statutes 2000, section 216B.62, 
 46.33  subdivision 5, is amended to read: 
 46.34     Subd. 5.  [ASSESSING COOPERATIVES AND MUNICIPALS.] The 
 46.35  commission and department may charge cooperative electric 
 46.36  associations and municipal electric utilities their 
 47.1   proportionate share of the expenses incurred in the review and 
 47.2   disposition of resource plans, adjudication of service area 
 47.3   disputes, proceedings under section 216B.2425, and the costs 
 47.4   incurred in the adjudication of complaints over service 
 47.5   standards, practices, and rates.  Cooperative electric 
 47.6   associations electing to become subject to rate regulation by 
 47.7   the commission pursuant to section 216B.026, subdivision 4, are 
 47.8   also subject to this section.  Neither a cooperative electric 
 47.9   association nor a municipal electric utility is liable for costs 
 47.10  and expenses in a calendar year in excess of the limitation on 
 47.11  costs that may be assessed against public utilities under 
 47.12  subdivision 2.  A cooperative electric association or municipal 
 47.13  electric utility may object to and appeal bills of the 
 47.14  commission and department as provided in subdivision 4.  
 47.15     The department shall assess cooperatives and municipalities 
 47.16  for the costs of alternative energy engineering activities under 
 47.17  section 216C.261.  Each cooperative and municipality shall be 
 47.18  assessed in proportion that its gross operating revenues for the 
 47.19  sale of gas and electric service within the state for the last 
 47.20  calendar year bears to the total of those revenues for all 
 47.21  public utilities, cooperatives, and municipalities. 
 47.22     Sec. 35.  [STATE ENERGY PLANNING REPORT.] 
 47.23     (a) The commissioner of the department of commerce shall 
 47.24  prepare a state energy planning report and submit it to the 
 47.25  legislature by December 15, 2001 and update the report by 
 47.26  December 15, 2002.  The report must identify important trends 
 47.27  and issues in energy consumption, supply, technologies, 
 47.28  conservation, environmental effects, and economics, and must 
 47.29  recommend energy goals relating to the energy needs of the 
 47.30  state.  The report must recommend goals for the role of energy 
 47.31  conservation, utilization of renewable energy resources, 
 47.32  deployment of distributed generation resources, other modern 
 47.33  energy technologies, and traditional energy technologies, and 
 47.34  affordability of energy services for all Minnesotans.  The 
 47.35  report must recommend strategies to reach the recommended goals, 
 47.36  including recommendations for amendments to state law. 
 48.1      (b) The report must address, among other issues: 
 48.2      (1) projected energy consumption over the next ten years; 
 48.3      (2) the need for new energy production and transportation 
 48.4   facilities; 
 48.5      (3) options for streamlining of the procedures for 
 48.6   certification of need, routing and siting, environmental review, 
 48.7   and permitting of energy facilities; 
 48.8      (4) the potential role of energy conservation, modern and 
 48.9   emerging energy technologies, and renewable generation; 
 48.10     (5) the role for traditional energy technologies; 
 48.11     (6) the environmental effects of energy consumption, 
 48.12  including an analysis of the costs associated with reducing 
 48.13  those effects; and 
 48.14     (7) projected energy costs over the next ten years. 
 48.15     (c) In preparing the report, the commissioner shall invite 
 48.16  public participation and shall consult with other state 
 48.17  agencies, including the environmental quality board staff, the 
 48.18  public utilities commission staff, the pollution control agency, 
 48.19  the department of health and other relevant agencies, local 
 48.20  government units, regional energy planning groups, energy 
 48.21  utilities, and other interested persons.  Not later than October 
 48.22  1, 2001, the commissioner shall issue a draft report.  The 
 48.23  commissioner shall accept written comments and hold at least one 
 48.24  public meeting to gather additional public input on the draft 
 48.25  report. 
 48.26     Sec. 36.  [REPEALER.] 
 48.27     Minnesota Statutes 2000, sections 116C.55, subdivisions 2 
 48.28  and 3; 116C.57, subdivisions 3, 5, and 5a; 116C.67; and 
 48.29  216B.2421, subdivision 3, are repealed. 
 48.30     Sec. 37.  [EFFECTIVE DATE.] 
 48.31     This article is effective for certificates of need and 
 48.32  route and site permits applied for on or after August 1, 2001. 
 48.33                             ARTICLE 8 
 48.34                 RENEWABLE ENERGY AND CONSERVATION 
 48.35     Section 1.  Minnesota Statutes 2000, section 216B.1645, is 
 48.36  amended to read: 
 49.1      216B.1645 [POWER PURCHASE CONTRACT OR INVESTMENT.] 
 49.2      Upon the petition of a public utility, the public utilities 
 49.3   commission shall approve or disapprove power purchase contracts, 
 49.4   investments, or expenditures entered into or made by the utility 
 49.5   to satisfy the wind and biomass mandates contained in sections 
 49.6   216B.2423 and, 216B.2424, and 216B.169, including reasonable 
 49.7   investments and expenditures made to transmit the electricity 
 49.8   generated from sources developed under those sections that is 
 49.9   ultimately used to provide service to the utility's retail 
 49.10  customers, or to develop renewable energy sources from the 
 49.11  account required in section 116C.779.  The expenses incurred by 
 49.12  the utility over the duration of the approved contract or useful 
 49.13  life of the investment and expenditures made pursuant to section 
 49.14  116C.779 shall be recoverable from the ratepayers of the 
 49.15  utility, to the extent they are not offset by utility revenues 
 49.16  attributable to the contracts, investments, or expenditures.  
 49.17  Upon petition by a public utility, the commission shall approve 
 49.18  or approve as modified a rate schedule providing for the 
 49.19  automatic adjustment of charges to recover the expenses or costs 
 49.20  approved by the commission, which, in the case of transmission 
 49.21  expenditures, are limited to the portion of actual transmission 
 49.22  costs that are directly allocable to the need to transmit power 
 49.23  from the renewable sources of energy.  The commission may not 
 49.24  approve recovery of the costs for that portion of the power 
 49.25  generated from sources governed by this section that the utility 
 49.26  sells into the wholesale market.  Nothing in this section shall 
 49.27  be construed to determine the manner or extent to which revenues 
 49.28  derived from other generation facilities of the utility may be 
 49.29  considered in determining the recovery of the approved cost or 
 49.30  expenses associated with the mandated contracts, investments, or 
 49.31  expenditures in the event there is retail competition for 
 49.32  electric energy. 
 49.33     Sec. 2.  [216B.169] [RENEWABLE AND HIGH-EFFICIENCY ENERGY 
 49.34  RATE OPTIONS.] 
 49.35     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
 49.36  section, the following terms have the meanings given them. 
 50.1      (a) "Utility" means a public utility, municipal utility, or 
 50.2   cooperative electric association providing electric service at 
 50.3   retail to Minnesota consumers. 
 50.4      (b) "Renewable energy" has the meaning given in section 
 50.5   216B.2422, subdivision 1, paragraph (c). 
 50.6      (c) "High-efficiency, low emissions, distributed generation"
 50.7   means a distributed generation facility of no more than ten 
 50.8   megawatts of interconnected capacity that is certified by the 
 50.9   commissioner under subdivision 3 as a high-efficiency, low 
 50.10  emissions facility. 
 50.11     Subd. 2.  [RENEWABLE AND HIGH-EFFICIENCY ENERGY RATE 
 50.12  OPTIONS.] (a) Each utility shall offer its customers, and shall 
 50.13  advertise the offer at least annually, one or more options that 
 50.14  allow a customer to determine that a certain amount of the 
 50.15  electricity generated or purchased on behalf of the customer is 
 50.16  renewable energy or energy generated by high-efficiency, low 
 50.17  emissions, distributed generation such as fuel cells and 
 50.18  microturbines fueled by a renewable fuel. 
 50.19     (b) Each public utility shall file an implementation plan 
 50.20  within 90 days of the effective date of this section to 
 50.21  implement paragraph (a). 
 50.22     (c) Rates charged to customers must be calculated using the 
 50.23  utility's cost of acquiring the energy for the customer and must:
 50.24     (1) reflect the difference between the cost of generating 
 50.25  or purchasing the renewable energy and the cost of generating or 
 50.26  purchasing the same amount of nonrenewable energy; and 
 50.27     (2) be distributed on a per kilowatt-hour basis among all 
 50.28  customers who choose to participate in the program. 
 50.29     (d) Implementation of these rate options may reflect a 
 50.30  reasonable amount of lead time necessary to arrange acquisition 
 50.31  of the energy.  The utility may acquire the energy demanded by 
 50.32  customers, in whole or in part, through procuring or generating 
 50.33  the renewable energy directly, or through the purchase of 
 50.34  credits from a provider that has received certification of 
 50.35  eligible power supply pursuant to subdivision 3.  If a utility 
 50.36  is not able to arrange an adequate supply of renewable or 
 51.1   high-efficiency energy to meet its customers' demand under this 
 51.2   section, the utility must file a report with the commission 
 51.3   detailing its efforts and reasons for its failure. 
 51.4      Subd. 3.  [CERTIFICATION AND TRADEABLE CREDITS.] (a) The 
 51.5   commissioner shall certify a power supply or supplies as 
 51.6   eligible to satisfy customer requirements under this section 
 51.7   upon finding: 
 51.8      (1) the power supply is renewable energy or energy 
 51.9   generated by high-efficiency, low emissions, distributed 
 51.10  generation; and 
 51.11     (2) the sales arrangements of energy from the supplies are 
 51.12  such that the power supply is only sold once to retail consumers.
 51.13     (b) To facilitate compliance with this section, the 
 51.14  commission may, by order, establish a program for tradeable 
 51.15  credits for eligible power supplies. 
 51.16     Sec. 3.  [216B.1691] [RENEWABLE ENERGY OBJECTIVES.] 
 51.17     Subdivision 1.  [DEFINITIONS.] (a) "Eligible energy 
 51.18  technology" means: 
 51.19     (1) an energy technology that generates electricity from 
 51.20  the following renewable energy sources:  solar, wind, 
 51.21  hydroelectric with a capacity of less than 60 megawatts, or 
 51.22  biomass; and 
 51.23     (2) was not mandated by state law or commission order. 
 51.24     (b) "electric utility" means a public utility providing 
 51.25  electric service, a generation and transmission cooperative 
 51.26  electric association, or a municipal power agency. 
 51.27     Subd. 2.  [ELIGIBLE ENERGY OBJECTIVES.] (a) Each electric 
 51.28  utility shall make a good faith effort to generate or procure 
 51.29  sufficient electricity generated by an eligible energy 
 51.30  technology to provide its retail consumers, or the retail 
 51.31  members of a distribution utility to which the electric utility 
 51.32  provides wholesale electric service, so that: 
 51.33     (1) commencing in 2005, at least one percent of the 
 51.34  electric energy provided to those retail customers is generated 
 51.35  by eligible energy technologies; 
 51.36     (2) the amount provided under clause (1) is increased by 
 52.1   one percent each year until 2015; 
 52.2      (3) ten percent of the electric energy provided to retail 
 52.3   customers in Minnesota is generated by eligible energy 
 52.4   technologies; and 
 52.5      (4) of the eligible energy technology generation required 
 52.6   under clauses (1) and (2), at least 0.5 percent of the energy 
 52.7   must be generated by biomass energy technologies by 2010 and one 
 52.8   percent by 2015. 
 52.9      (b) Each electric utility shall report on its activities 
 52.10  and progress with regard to these objectives in their filings 
 52.11  under section 216B.2422. 
 52.12     (c) The commission, in consultation with the commissioner 
 52.13  of commerce, shall compile the information provided to the 
 52.14  commission under paragraph (b), and report to the chairs of the 
 52.15  house of representatives and senate committees with jurisdiction 
 52.16  over energy and environment policy issues as to the progress of 
 52.17  utilities in the state in increasing the amount of renewable 
 52.18  energy provided to retail customers, with any recommendations 
 52.19  for regulatory or legislative action, by January 15, 2002. 
 52.20     Sec. 4.  Minnesota Statutes 2000, section 216B.241, 
 52.21  subdivision 1, is amended to read: 
 52.22     Subdivision 1.  [DEFINITIONS.] For purposes of this section 
 52.23  and section 216B.16, subdivision 6b, the terms defined in this 
 52.24  subdivision have the meanings given them.  
 52.25     (a) "Commission" means the public utilities commission. 
 52.26     (b) "Commissioner" means the commissioner of public service.
 52.27     (c) "Customer facility" means all buildings, structures, 
 52.28  equipment, and installations at a single site. 
 52.29     (d) "Department" means the department of public service. 
 52.30     (e) "Energy conservation" means demand-side management of 
 52.31  energy supplies resulting in a net reduction in energy use.  
 52.32  Load management that reduces overall energy use is energy 
 52.33  conservation. 
 52.34     (f) "Energy conservation improvement" means the purchase or 
 52.35  installation of a device, method, material, or project that: 
 52.36     (1) reduces consumption of or increases efficiency in the 
 53.1   use of electricity or natural gas, including but not limited to 
 53.2   insulation and ventilation, storm or thermal doors or windows, 
 53.3   caulking and weatherstripping, furnace efficiency modifications, 
 53.4   thermostat or lighting controls, awnings, or systems to turn off 
 53.5   or vary the delivery of energy; 
 53.6      (2) creates, converts, or actively uses energy from 
 53.7   renewable sources such as solar, wind, and biomass, provided 
 53.8   that the device or method conforms with national or state 
 53.9   performance and quality standards whenever applicable; 
 53.10     (3) seeks to provide energy savings through reclamation or 
 53.11  recycling and that is used as part of the infrastructure of an 
 53.12  electric generation, transmission, or distribution system within 
 53.13  the state or a natural gas distribution system within the state; 
 53.14  or 
 53.15     (4) provides research or development of new means of 
 53.16  increasing energy efficiency or conserving energy or research or 
 53.17  development of improvement of existing means of increasing 
 53.18  energy efficiency or conserving energy a project that results in 
 53.19  energy conservation.  
 53.20     (f) (g) "Investments and expenses of a public utility" 
 53.21  includes the investments and expenses incurred by a public 
 53.22  utility in connection with an energy conservation improvement, 
 53.23  including but not limited to:  
 53.24     (1) the differential in interest cost between the market 
 53.25  rate and the rate charged on a no-interest or below-market 
 53.26  interest loan made by a public utility to a customer for the 
 53.27  purchase or installation of an energy conservation improvement; 
 53.28     (2) the difference between the utility's cost of purchase 
 53.29  or installation of energy conservation improvements and any 
 53.30  price charged by a public utility to a customer for such 
 53.31  improvements.  
 53.32     (g) (h) "Large electric customer facility" means a customer 
 53.33  facility that imposes a peak electrical demand on an electric 
 53.34  utility's system of not less than 20,000 kilowatts, measured in 
 53.35  the same way as the utility that serves the customer facility 
 53.36  measures electrical demand for billing purposes, and for which 
 54.1   electric services are provided at retail on a single bill by a 
 54.2   utility operating in the state. 
 54.3      (i) "Load management" means an activity, service, or 
 54.4   technology to change the timing or the efficiency of a 
 54.5   customer's use of energy that allows a utility or a customer to 
 54.6   respond to wholesale market fluctuations or to reduce the 
 54.7   overall demand for energy or capacity.  
 54.8      Sec. 5.  Minnesota Statutes 2000, section 216B.241, 
 54.9   subdivision 1a, is amended to read: 
 54.10     Subd. 1a.  [INVESTMENT, EXPENDITURE, AND CONTRIBUTION; 
 54.11  PUBLIC UTILITY.] (a) For purposes of this subdivision and 
 54.12  subdivision 2, "public utility" has the meaning given it in 
 54.13  section 216B.02, subdivision 4.  Each public utility shall spend 
 54.14  and invest for energy conservation improvements under this 
 54.15  subdivision and subdivision 2 the following amounts: 
 54.16     (1) for a utility that furnishes gas service, 0.5 percent 
 54.17  of its gross operating revenues from service provided in the 
 54.18  state; 
 54.19     (2) for a utility that furnishes electric service, 1.5 
 54.20  percent of its gross operating revenues from service provided in 
 54.21  the state; and 
 54.22     (3) for a utility that furnishes electric service and that 
 54.23  operates a nuclear-powered electric generating plant within the 
 54.24  state, two percent of its gross operating revenues from service 
 54.25  provided in the state. 
 54.26  For purposes of this paragraph (a), "gross operating revenues" 
 54.27  do not include revenues from large electric customer facilities 
 54.28  exempted by the commissioner of the department of public service 
 54.29  pursuant to under paragraph (b). 
 54.30     (b) The owner of a large electric customer facility may 
 54.31  petition the commissioner of the department of public service to 
 54.32  exempt both electric and gas utilities serving the large energy 
 54.33  customer facility from the investment and expenditure 
 54.34  requirements of paragraph (a) with respect to retail revenues 
 54.35  attributable to the facility.  At a minimum, the petition must 
 54.36  be supported by evidence relating to competitive or economic 
 55.1   pressures on the customer and a showing by the customer of 
 55.2   reasonable efforts to identify, evaluate, and implement 
 55.3   cost-effective conservation improvements at the facility.  If a 
 55.4   petition is filed on or before October 1 of any year, the order 
 55.5   of the commissioner to exempt revenues attributable to the 
 55.6   facility can be effective no earlier than January 1 of the 
 55.7   following year.  The commissioner shall not grant an exemption 
 55.8   if the commissioner determines that granting the exemption is 
 55.9   contrary to the public interest.  The commissioner may, after 
 55.10  investigation, rescind any exemption granted under this 
 55.11  paragraph upon a determination that cost-effective energy 
 55.12  conservation improvements are available at the large electric 
 55.13  customer facility.  For the purposes of this paragraph, 
 55.14  "cost-effective" means that the projected total cost of the 
 55.15  energy conservation improvement at the large electric customer 
 55.16  facility is less than the projected present value of the energy 
 55.17  and demand savings resulting from the energy conservation 
 55.18  improvement.  For the purposes of investigations by the 
 55.19  commissioner under this paragraph, the owner of any large 
 55.20  electric customer facility shall, upon request, provide the 
 55.21  commissioner with updated information comparable to that 
 55.22  originally supplied in or with the owner's original petition 
 55.23  under this paragraph. 
 55.24     (c) The commissioner may require investments or spending 
 55.25  greater than the amounts required under this subdivision for a 
 55.26  public utility whose most recent advance forecast required under 
 55.27  section 216B.2422 or 216C.17 projects a peak demand deficit of 
 55.28  100 megawatts or greater within five years under mid-range 
 55.29  forecast assumptions.  
 55.30     (d) A public utility or owner of a large electric customer 
 55.31  facility may appeal a decision of the commissioner under 
 55.32  paragraph (b) or (c) to the commission under subdivision 2.  In 
 55.33  reviewing a decision of the commissioner under paragraph (b) or 
 55.34  (c), the commission shall rescind the decision if it finds that 
 55.35  the required investments or spending will: 
 55.36     (1) not result in cost-effective energy conservation 
 56.1   improvements; or 
 56.2      (2) otherwise not be in the public interest. 
 56.3      (e) Each utility shall determine what portion of the amount 
 56.4   it sets aside for conservation improvement will be used for 
 56.5   conservation improvements under subdivision 2 and what portion 
 56.6   it will contribute to the energy and conservation account 
 56.7   established in subdivision 2a.  A public utility may propose to 
 56.8   the commissioner to designate that all or a portion of funds 
 56.9   contributed to the account established in subdivision 2a be used 
 56.10  for research and development projects that can best be 
 56.11  implemented on a statewide basis.  Contributions must be 
 56.12  remitted to the commissioner of public service by February 1 of 
 56.13  each year.  Nothing in this subdivision prohibits a public 
 56.14  utility from spending or investing for energy conservation 
 56.15  improvement more than required in this subdivision. 
 56.16     Sec. 6.  Minnesota Statutes 2000, section 216B.241, 
 56.17  subdivision 1b, is amended to read: 
 56.18     Subd. 1b.  [CONSERVATION IMPROVEMENT BY COOPERATIVE 
 56.19  ASSOCIATION OR MUNICIPALITY.] (a) This subdivision applies to: 
 56.20     (1) a cooperative electric association that generates and 
 56.21  transmits electricity to associations that provide electricity 
 56.22  at retail including a cooperative electric association not 
 56.23  located in this state that serves associations or others in the 
 56.24  state provides retail service to its members; 
 56.25     (2) a municipality that provides electric service to retail 
 56.26  customers; and 
 56.27     (3) a municipality with gross operating revenues in excess 
 56.28  of $5,000,000 from sales of natural gas to retail customers.  
 56.29     (b) Each cooperative electric association and municipality 
 56.30  subject to this subdivision shall spend and invest for energy 
 56.31  conservation improvements under this subdivision the following 
 56.32  amounts: 
 56.33     (1) for a municipality, 0.5 percent of its gross operating 
 56.34  revenues from the sale of gas and one 1.5 percent of its gross 
 56.35  operating revenues from the sale of electricity not purchased 
 56.36  from a public utility governed by subdivision 1a or a 
 57.1   cooperative electric association governed by this subdivision, 
 57.2   excluding gross operating revenues from electric and gas service 
 57.3   provided in the state to large electric customer facilities; and 
 57.4      (2) for a cooperative electric association, 1.5 percent of 
 57.5   its gross operating revenues from service provided in the state, 
 57.6   excluding gross operating revenues from service provided in the 
 57.7   state to large electric customer facilities indirectly through a 
 57.8   distribution cooperative electric association. 
 57.9      (c) Each municipality and cooperative electric association 
 57.10  subject to this subdivision shall identify and implement energy 
 57.11  conservation improvement spending and investments that are 
 57.12  appropriate for the municipality or association, except that a 
 57.13  municipality or association may not spend or invest for energy 
 57.14  conservation improvements that directly benefit a large electric 
 57.15  customer facility for which the commissioner has issued an 
 57.16  exemption under subdivision 1a, paragraph (b). 
 57.17     (d) Each municipality and cooperative electric association 
 57.18  subject to this subdivision may spend and invest annually up 
 57.19  to 15 ten percent of the total amount required to be spent and 
 57.20  invested on energy conservation improvements under this 
 57.21  subdivision on research and development projects that meet the 
 57.22  definition of energy conservation improvement in subdivision 1 
 57.23  and that are funded directly by the municipality or cooperative 
 57.24  electric association.  Load management may be used to meet the 
 57.25  requirements of this subdivision if it reduces the demand for or 
 57.26  increases the efficiency of electric services.  
 57.27     (e) Load management activities that do not reduce energy 
 57.28  use but that increase the efficiency of the electric system may 
 57.29  be used to meet the following percentage of the conservation 
 57.30  investment and spending requirements of this subdivision: 
 57.31     (1) 2002 - 90 percent; 
 57.32     (2) 2003 - 80 percent; 
 57.33     (3) 2004 - 65 percent; and 
 57.34     (4) 2005 and thereafter - 50 percent. 
 57.35     (f) A generation and transmission cooperative electric 
 57.36  association may include as spending and investment required 
 58.1   under this subdivision conservation improvement spending and 
 58.2   investment by that provides energy services to cooperative 
 58.3   electric associations that provide electric service at retail to 
 58.4   consumers and that are served by the generation and transmission 
 58.5   association may invest in energy conservation improvements on 
 58.6   behalf of the associations it serves and may fulfill the 
 58.7   conservation, spending, reporting, and energy savings goals on 
 58.8   an aggregate basis.  A municipal power agency or other 
 58.9   not-for-profit entity that provides energy service to municipal 
 58.10  utilities that provide electric service at retail may invest in 
 58.11  energy conservation improvements on behalf of the municipal 
 58.12  utilities it serves and may fulfill the conservation, spending, 
 58.13  reporting, and energy savings goals on an aggregate basis, under 
 58.14  an agreement between the municipal power agency or 
 58.15  not-for-profit entity and each municipal utility for funding the 
 58.16  investments. 
 58.17     (d) (g) By February 1 of each year June 1, 2002, and every 
 58.18  two years thereafter, each municipality or cooperative 
 58.19  shall report file an overview of its conservation improvement 
 58.20  plan with the commissioner.  With this overview, the 
 58.21  municipality or cooperative shall also provide an evaluation to 
 58.22  the commissioner detailing its energy conservation improvement 
 58.23  spending and investments with a brief analysis of effectiveness 
 58.24  in reducing consumption of electricity or gas for the previous 
 58.25  period.  The evaluation must briefly describe each conservation 
 58.26  program and must specify the energy savings or increased 
 58.27  efficiency in the use of energy within the service territory of 
 58.28  the utility or association that is the result of the spending 
 58.29  and investments.  The evaluation must analyze the 
 58.30  cost-effectiveness of the utility's or association's 
 58.31  conservation programs, using a list of baseline energy and 
 58.32  capacity savings assumptions developed in consultation with the 
 58.33  department. 
 58.34  The commissioner shall review each report evaluation and make 
 58.35  recommendations, where appropriate, to the municipality or 
 58.36  association to increase the effectiveness of conservation 
 59.1   improvement activities.  Up to three percent of a utility's 
 59.2   conservation spending obligation under this section may be used 
 59.3   for program pre-evaluation, testing, and monitoring and program 
 59.4   evaluation.  
 59.5      (h) The commissioner shall also review each 
 59.6   report evaluation for whether a portion of the money spent on 
 59.7   residential conservation improvement programs is devoted to 
 59.8   programs that directly address the needs of renters and 
 59.9   low-income persons unless an insufficient number of appropriate 
 59.10  programs are available.  For the purposes of this subdivision 
 59.11  and subdivision 2, "low-income" means an income of less than 185 
 59.12  percent of the federal poverty level at or below 50 percent of 
 59.13  the state median income.  
 59.14     (e) (i) As part of its spending for conservation 
 59.15  improvement, a municipality or association may contribute to the 
 59.16  energy and conservation account.  A municipality or association 
 59.17  may propose to the commissioner to designate that all or a 
 59.18  portion of funds contributed to the account be used for research 
 59.19  and development projects that can best be implemented on a 
 59.20  statewide basis.  Any amount contributed must be remitted to the 
 59.21  commissioner of public service by February 1 of each year. 
 59.22     Sec. 7.  Minnesota Statutes 2000, section 216B.241, 
 59.23  subdivision 2, is amended to read: 
 59.24     Subd. 2.  [PROGRAMS.] (a) The commissioner may by rule 
 59.25  require public utilities to make investments and expenditures in 
 59.26  energy conservation improvements, explicitly setting forth the 
 59.27  interest rates, prices, and terms under which the improvements 
 59.28  must be offered to the customers.  The required programs must 
 59.29  cover a two-year period.  Public utilities shall file 
 59.30  conservation improvement plans by June 1, on a schedule 
 59.31  determined by order of the commissioner.  Plans received by a 
 59.32  public utility by June 1 must be approved or approved as 
 59.33  modified by the commissioner by December 1 of that same year.  
 59.34  The commissioner shall require at least one public utility to 
 59.35  establish a pilot program to make investments in and 
 59.36  expenditures for energy from renewable resources such as solar, 
 60.1   wind, or biomass and shall give special consideration and 
 60.2   encouragement to programs that bring about significant net 
 60.3   savings through the use of energy-efficient lighting.  The 
 60.4   commissioner shall evaluate the program on the basis of 
 60.5   cost-effectiveness and the reliability of technologies 
 60.6   employed.  The rules of the department commissioner's order must 
 60.7   provide to the extent practicable for a free choice, by 
 60.8   consumers participating in the program, of the device, method, 
 60.9   material, or project constituting the energy conservation 
 60.10  improvement and for a free choice of the seller, installer, or 
 60.11  contractor of the energy conservation improvement, provided that 
 60.12  the device, method, material, or project seller, installer, or 
 60.13  contractor is duly licensed, certified, approved, or qualified, 
 60.14  including under the residential conservation services program, 
 60.15  where applicable.  
 60.16     (b) The commissioner may require a utility to make an 
 60.17  energy conservation improvement investment or expenditure 
 60.18  whenever the commissioner finds that the improvement will result 
 60.19  in energy savings at a total cost to the utility less than the 
 60.20  cost to the utility to produce or purchase an equivalent amount 
 60.21  of new supply of energy.  The commissioner shall nevertheless 
 60.22  ensure that every public utility operate one or more programs 
 60.23  under periodic review by the department.  Load management may be 
 60.24  used to meet the requirements for energy conservation 
 60.25  improvements under this section if it results in a demonstrable 
 60.26  reduction in consumption of energy.  
 60.27     (c) Each public utility subject to subdivision 1a may spend 
 60.28  and invest annually up to 15 ten percent of the total amount 
 60.29  required to be spent and invested on energy conservation 
 60.30  improvements under this section by the utility on research and 
 60.31  development projects that meet the definition of energy 
 60.32  conservation improvement in subdivision 1 and that are funded 
 60.33  directly by the public utility.  
 60.34     (d) A public utility may not spend for or invest in energy 
 60.35  conservation improvements that directly benefit a large electric 
 60.36  customer facility for which the commissioner has issued an 
 61.1   exemption pursuant to subdivision 1a, paragraph (b).  The 
 61.2   commissioner shall consider and may require a utility to 
 61.3   undertake a program suggested by an outside source, including a 
 61.4   political subdivision or a nonprofit or community organization. 
 61.5      (c) No utility may make an energy conservation improvement 
 61.6   under this section to a building envelope unless: 
 61.7      (1) it is the primary supplier of energy used for either 
 61.8   space heating or cooling in the building; 
 61.9      (2) the commissioner determines that special circumstances, 
 61.10  that would unduly restrict the availability of conservation 
 61.11  programs, warrant otherwise; or 
 61.12     (3) the utility has been awarded a contract under 
 61.13  subdivision 2a. 
 61.14     (d) (e) The commissioner may, by order, establish a list of 
 61.15  programs that may be offered as energy conservation improvements 
 61.16  by a public utility, municipal utility, cooperative electric 
 61.17  association, or other entity providing conservation services 
 61.18  pursuant to this section.  The list of programs may include 
 61.19  rebates for high-efficiency appliances, rebates or subsidies for 
 61.20  high-efficiency lamps, small business energy audits, and 
 61.21  building recommissioning.  The commissioner may, by order, 
 61.22  change this list to add or subtract programs as the commissioner 
 61.23  determines is necessary to promote efficient and effective 
 61.24  conservation programs. 
 61.25     (f) The commissioner shall ensure that a portion of the 
 61.26  money spent on residential conservation improvement programs is 
 61.27  devoted to programs that directly address the needs of renters 
 61.28  and low-income persons, in proportion to the amount the utility 
 61.29  has historically spent on such programs based on the most recent 
 61.30  three-year average relative to the utility's total conservation 
 61.31  spending under this section, unless an insufficient number of 
 61.32  appropriate programs are available. 
 61.33     (e) (g) A utility, a political subdivision, or a nonprofit 
 61.34  or community organization that has suggested a program, the 
 61.35  attorney general acting on behalf of consumers and small 
 61.36  business interests, or a utility customer that has suggested a 
 62.1   program and is not represented by the attorney general under 
 62.2   section 8.33 may petition the commission to modify or revoke a 
 62.3   department decision under this section, and the commission may 
 62.4   do so if it determines that the program is not cost-effective, 
 62.5   does not adequately address the residential conservation 
 62.6   improvement needs of low-income persons, has a long-range 
 62.7   negative effect on one or more classes of customers, or is 
 62.8   otherwise not in the public interest.  The person petitioning 
 62.9   for commission review has the burden of proof.  The commission 
 62.10  shall reject a petition that, on its face, fails to make a 
 62.11  reasonable argument that a program is not in the public interest.
 62.12     (h) The commissioner may order a public utility to include, 
 62.13  with the filing of the utility's proposed conservation 
 62.14  improvement plan under paragraph (a), the results of an 
 62.15  independent audit of the utility's conservation improvement 
 62.16  programs and expenditures performed by the department or an 
 62.17  auditor with experience in the provision of energy conservation 
 62.18  and energy efficiency services approved by the commissioner and 
 62.19  chosen by the utility.  The audit must specify the energy 
 62.20  savings or increased efficiency in the use of energy within the 
 62.21  service territory of the utility that is the result of the 
 62.22  spending and investments.  The audit must evaluate the 
 62.23  cost-effectiveness of the utility's conservation programs. 
 62.24     Up to three percent of a utility's conservation spending 
 62.25  obligation under this section may be used for program 
 62.26  pre-evaluation, testing, and monitoring and program audit and 
 62.27  evaluation.  
 62.28     Sec. 8.  Minnesota Statutes 2000, section 216C.051, 
 62.29  subdivision 6, is amended to read: 
 62.30     Subd. 6.  [ASSESSMENT; APPROPRIATION.] On request by the 
 62.31  cochairs of the legislative task force and after approval of the 
 62.32  legislative coordinating commission, the commissioner of the 
 62.33  department of public service commerce shall assess from electric 
 62.34  utilities all public utilities, generation and transmission 
 62.35  cooperative electric associations, and municipal power agencies 
 62.36  providing electric or natural gas services in Minnesota, in 
 63.1   addition to assessments made under section 216B.62, the amount 
 63.2   requested for the operation of the task force not to 
 63.3   exceed $700,000 $150,000 in a fiscal year.  This authority to 
 63.4   assess continues until the commissioner has assessed a total of 
 63.5   $700,000.  The amount assessed under this section is 
 63.6   appropriated to the director of the legislative coordinating 
 63.7   commission for those purposes, and is available until expended.  
 63.8   The department shall apportion those costs among all energy 
 63.9   utilities in proportion to their respective gross operating 
 63.10  revenues from the sale of gas or electric service within the 
 63.11  state during the last calendar year.  For the purposes of 
 63.12  administrative efficiency, the department shall assess energy 
 63.13  utilities and issue bills in accordance with the billing and 
 63.14  assessment procedures provided in section 216B.62, to the extent 
 63.15  that these procedures do not conflict with this subdivision. 
 63.16     Sec. 9.  Minnesota Statutes 2000, section 216C.051, 
 63.17  subdivision 9, is amended to read: 
 63.18     Subd. 9.  [EXPIRATION.] This section is repealed March 15, 
 63.19  2001 June 30, 2005. 
 63.20     Sec. 10.  [216C.052] [RELIABILITY ADMINISTRATOR.] 
 63.21     Subdivision 1.  [RESPONSIBILITIES.] (a) There is 
 63.22  established the position of reliability administrator in the 
 63.23  department of commerce.  The administrator shall act as a source 
 63.24  of independent expertise and a technical advisor to the 
 63.25  commissioner, the commission, the public, and the legislative 
 63.26  electric energy task force on issues related to the reliability 
 63.27  of the electric system.  In conducting its work, the 
 63.28  administrator shall: 
 63.29     (1) model and monitor the use and operation of the energy 
 63.30  infrastructure in the state, including generation facilities, 
 63.31  transmission lines, natural gas pipelines, and other energy 
 63.32  infrastructure; 
 63.33     (2) develop and present to the commission and parties 
 63.34  technical analyses of proposed infrastructure projects, and 
 63.35  provide technical advice to the commission; 
 63.36     (3) present independent, factual, expert, and technical 
 64.1   information on infrastructure proposals and reliability issues 
 64.2   at public meetings hosted by the task force, the environmental 
 64.3   quality board, the department, or the commission. 
 64.4      (b) Upon request and subject to resource constraints, the 
 64.5   administrator shall provide technical assistance regarding 
 64.6   matters unrelated to applications for infrastructure 
 64.7   improvements to the task force, the department, or the 
 64.8   commission. 
 64.9      (c) The administrator may not advocate for any particular 
 64.10  outcome in a commission proceeding, but may give technical 
 64.11  advice to the commission as to the impact on the reliability of 
 64.12  the energy system of a particular project or projects.  The 
 64.13  administrator must not be considered a party or a participant in 
 64.14  any proceeding before the commission. 
 64.15     Subd. 2.  [ADMINISTRATIVE ISSUES.] (a) The commissioner may 
 64.16  select the administrator who shall serve for a four-year term.  
 64.17  The commissioner shall oversee and direct the work of the 
 64.18  administrator, annually review the expenses of the 
 64.19  administrator, and annually approve the budget of the 
 64.20  administrator.  The administrator may hire staff and may 
 64.21  contract for technical expertise in performing duties when 
 64.22  existing state resources are required for other state 
 64.23  responsibilities or when special expertise is required.  The 
 64.24  salary of the administrator is governed by section 15A.0815, 
 64.25  subdivision 2. 
 64.26     (b) Costs relating to a specific proceeding, analysis, or 
 64.27  project are not general administrative costs.  For purposes of 
 64.28  this section, "energy utility" means public utilities, 
 64.29  generation and transmission cooperative electric associations, 
 64.30  and municipal power agencies providing natural gas or electric 
 64.31  service in the state.  
 64.32     (c) The department of commerce shall pay: 
 64.33     (1) the general administrative costs of the administrator, 
 64.34  not to exceed $1,500,000 in a fiscal year, and shall assess 
 64.35  energy utilities for reimbursement for those administrative 
 64.36  costs.  These costs must be consistent with the budget approved 
 65.1   by the commissioner under paragraph (a).  The department shall 
 65.2   apportion the costs among all energy utilities in proportion to 
 65.3   their respective gross operating revenues from sales of gas or 
 65.4   electric service within the state during the last calendar year, 
 65.5   and shall then render a bill to each utility on a regular basis; 
 65.6   and 
 65.7      (2) costs relating to a specific proceeding analysis or 
 65.8   project and shall render a bill for reimbursement to the 
 65.9   specific energy utility or utilities participating in the 
 65.10  proceeding, analysis, or project directly, either at the 
 65.11  conclusion of a particular proceeding, analysis, or project, or 
 65.12  from time to time during the course of the proceeding, analysis, 
 65.13  or project. 
 65.14     (d) For purposes of administrative efficiency, the 
 65.15  department shall assess energy utilities and issue bills in 
 65.16  accordance with the billing and assessment procedures provided 
 65.17  in section 216B.62, to the extent that these procedures do not 
 65.18  conflict with this subdivision.  The amount of the bills 
 65.19  rendered by the department under paragraph (c) must be paid by 
 65.20  the energy utility into an account in the special revenue fund 
 65.21  in the state treasury within 30 days from the date of billing 
 65.22  and is appropriated to the commissioner for the purposes 
 65.23  provided in this section.  The commission shall approve or 
 65.24  approve as modified a rate schedule providing for the automatic 
 65.25  adjustment of charges to recover amounts paid by utilities under 
 65.26  this section.  All amounts assessed under this section are in 
 65.27  addition to amounts appropriated to the commission and the 
 65.28  department by other law. 
 65.29     Subd. 3.  [EXPIRATION.] This section expires June 30, 2006. 
 65.30     Sec. 11.  [CONSERVATION IMPROVEMENT PLAN; EVALUATION OF 
 65.31  COOPERATIVE AND MUNICIPAL PROGRAMS.] 
 65.32     (a) In consultation with the department of commerce, 
 65.33  cooperative electric associations and municipal utilities shall 
 65.34  evaluate their energy and capacity conservation programs, 
 65.35  develop plans for future programs, and report their findings and 
 65.36  plans to the chairs of the house of representatives and senate 
 66.1   committees with jurisdiction over energy issues by June 1, 2002. 
 66.2   Evaluations may be conducted jointly with other entities subject 
 66.3   to this section, and shall address: 
 66.4      (1) whether the utility or association has implemented and 
 66.5   is implementing cost-effective energy conservation programs; 
 66.6      (2) the availability of basic conservation services and 
 66.7   programs to customers; 
 66.8      (3) methodologies that best quantify energy savings, 
 66.9   cost-effectiveness, and the potential for cost-effective 
 66.10  conservation improvements; 
 66.11     (4) the role of capacity conservation in meeting utility 
 66.12  planning needs and state energy goals; and 
 66.13     (5) the ability of energy conservation programs to avoid 
 66.14  the need for construction of generation facilities and 
 66.15  transmission lines. 
 66.16     (b) The evaluation must develop program and performance 
 66.17  goals that recognize customer class, utility service area 
 66.18  demographics, cost of program delivery, regional economic 
 66.19  indicators, and utility load shape.  The cost of the evaluation 
 66.20  may be deducted from the utility's or association's conservation 
 66.21  spending obligation under Minnesota Statutes 2000, section 
 66.22  216B.241. 
 66.23     Sec. 12.  [COOPERATIVE CONSERVATION INVESTMENT INCREASE 
 66.24  PHASE-IN.] 
 66.25     The increase in required conservation improvement 
 66.26  expenditures by a cooperative electric association that results 
 66.27  from the amendments in section 5 to Minnesota Statutes, section 
 66.28  216B.241, subdivision 1b, paragraph (a), clause (1), must be 
 66.29  phased in as follows: 
 66.30     (1) at least 25 percent shall be effective in year 2002; 
 66.31     (2) at least 50 percent shall be effective in year 2003; 
 66.32     (3) at least 75 percent shall be effective in year 2004; 
 66.33  and 
 66.34     (4) all of the increase shall be effective in year 2005 and 
 66.35  thereafter. 
 66.36     Sec. 13.  [DISTRIBUTED ENERGY RESOURCES.] 
 67.1      (a) To the extent that cost-effective projects are 
 67.2   available in the service territory of a utility or association 
 67.3   providing conservation services under Minnesota Statutes, 
 67.4   section 216B.241, the utility or association shall use five 
 67.5   percent of the total amount to be spent on energy conservation 
 67.6   improvements under Minnesota Statutes, section 216B.241, on: 
 67.7      (1) projects to construct an electric generating facility 
 67.8   that utilizes renewable fuels as defined in Minnesota Statutes, 
 67.9   section 216B.2422, subdivision 1, such as methane or other 
 67.10  combustible gases derived from the processing of plant or animal 
 67.11  wastes, biomass fuels such as short-rotation woody or fibrous 
 67.12  agricultural crops, or other renewable fuel, as its primary fuel 
 67.13  source; or 
 67.14     (2) projects to install a distributed generation facility 
 67.15  of ten megawatts or less of interconnected capacity that is 
 67.16  fueled by natural gas, renewable fuels, or another similarly 
 67.17  clean fuel.  
 67.18     (b) For public utilities, as defined under Minnesota 
 67.19  Statutes, section 216B.02, subdivision 4, projects under this 
 67.20  section must be considered energy conservation improvements as 
 67.21  defined in Minnesota Statutes, section 216B.241.  For 
 67.22  cooperative electric associations and municipal utilities, 
 67.23  projects under this section must be considered load management 
 67.24  activities described in Minnesota Statutes, section 216B.241, 
 67.25  subdivision 1, paragraph (i).  
 67.26     (c) This section expires May 30, 2006.  
 67.27     Sec. 14.  [TRANSITION.] 
 67.28     The commission may provide an alternative recovery 
 67.29  mechanism for the expense of continuing existing approved 
 67.30  cost-effective projects by a rate-regulated distribution 
 67.31  cooperative electric association.  
 67.32     Sec. 15.  [CONSERVATION INVESTMENT PROGRAM STUDY.] 
 67.33     (a) The commissioner of commerce shall study the 
 67.34  conservation investment program created under Minnesota 
 67.35  Statutes, section 216B.241, and make recommendations to the 
 67.36  legislature on changes in the program that will assist the 
 68.1   program to obtain the maximum energy savings possible from 
 68.2   spending and investments under the program.  The study must 
 68.3   include, at a minimum: 
 68.4      (1) a review of administrative burdens imposed by the 
 68.5   program with the goal to reduce them to the maximum extent 
 68.6   consistent with ensuring that the program will meet its goal of 
 68.7   maximum energy savings with program funds; 
 68.8      (2) identification of spending and investments with high 
 68.9   potential for saving energy and suggestions for targeting the 
 68.10  program at those expenditures and investments; and 
 68.11     (3) appropriate levels of spending and investment under the 
 68.12  program.  
 68.13     (b) The commissioner shall solicit written public comment 
 68.14  on the study and submit a report and a copy of the written 
 68.15  comments to the committees of the legislature having principal 
 68.16  jurisdiction on energy matters by November 15, 2001.  
 68.17     Sec. 16.  [EXEMPTION EXTENDED.] 
 68.18     (a) The commissioner of commerce shall not review the 
 68.19  exemption under Minnesota Statutes, section 216B.241, 
 68.20  subdivision 1a, paragraph (b), of a large electric customer 
 68.21  facility, as defined in Minnesota Statutes, section 216B.241, 
 68.22  subdivision 1, paragraph (g), from the investment and 
 68.23  expenditure requirements of Minnesota Statutes, section 
 68.24  216B.241, subdivision 1a, paragraph (b), for five years from the 
 68.25  date the exemption was granted, provided the exemption was 
 68.26  granted before April 15, 2001.  
 68.27     (b) A large electric customer facility as defined in 
 68.28  Minnesota Statutes, section 216B.241, subdivision 1, that is 
 68.29  exempt from the investment and expenditure requirements of 
 68.30  Minnesota Statutes, section 216B.241, by virtue of a contract 
 68.31  approved by the public utilities commission prior to April 15, 
 68.32  2001, under Minnesota Statutes, section 216B.162, shall remain 
 68.33  exempt from those requirements until April 15, 2006. 
 68.34     (c) This section does not apply if the customer facility's 
 68.35  monthly peak measured demand for three consecutive months 
 68.36  exceeds 110 percent of the annual peak measured demand of the 
 69.1   facility in the year the exemption was granted. 
 69.2      Sec. 17.  [UNIVERSAL ENERGY SERVICE PROGRAM.] 
 69.3      The department of commerce shall report to the legislature 
 69.4   by January 15, 2002, regarding the development of a universal 
 69.5   energy service program.  The purpose of the program is to 
 69.6   provide energy bill payment and conservation assistance to low- 
 69.7   and moderate-income energy customers.  The report shall include 
 69.8   proposals for implementing the program, including, but not 
 69.9   limited to, proposals to establish income eligibility, estimate 
 69.10  the percentage of income that eligible customers devote to 
 69.11  energy costs, determine the level of funding required to 
 69.12  significantly lower the energy burden of eligible customers, 
 69.13  establish funding collection and distribution methods, and 
 69.14  measure the impact of charges for the program on all Minnesota 
 69.15  energy consumers. 
 69.16     Sec. 18.  [APPROPRIATION.] 
 69.17     The commissioner of commerce shall transfer up to $500,000 
 69.18  annually of the amounts provided for in section 11, subdivision 
 69.19  2, to the commissioner of administration for the purposes 
 69.20  provided in article 1, section 2, as needed to implement that 
 69.21  section. 
 69.22     Sec. 19.  [EFFECTIVE DATE.] 
 69.23     Sections 14, 15, and 16 are effective the day following 
 69.24  final enactment.  Sections 4 to 7, 10, 12, 13, and 18 are 
 69.25  effective January 1, 2002.  Section 9 is effective retroactively 
 69.26  from March 1, 2001.  Section 8 is effective July 1, 2001.