1.1                          A bill for an act
  1.2             relating to energy; enacting the Renewable Energy for 
  1.3             a New Economic Development Horizon Act; imposing a 
  1.4             renewable energy standard and a renewable energy 
  1.5             objective; requiring rulemaking; proposing coding for 
  1.6             new law in Minnesota Statutes, chapter 216B; repealing 
  1.7             Minnesota Statutes 2002, section 216B.1691. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [TITLE.] 
  1.10     This act is the Renewable Energy for a New Economic 
  1.11  Development Horizon Act of 2003. 
  1.12     Sec. 2.  [216B.1685] [DEFINITIONS.] 
  1.13     Subdivision 1.  [SCOPE.] For purposes of sections 216B.1685 
  1.14  to 216B.1687, certain terms have the meanings given them in this 
  1.15  section. 
  1.16     Subd. 2.  [QUALIFYING RENEWABLE ENERGY RESOURCE.] 
  1.17  "Qualifying renewable energy resource" means fuels and 
  1.18  technologies used in a generation facility located in Minnesota 
  1.19  to generate electricity through the use of any of the following 
  1.20  renewable resources:  wind; hydrogen, provided that after 
  1.21  January 1, 2010, the hydrogen must be generated from the 
  1.22  resources listed in this subdivision; solar; geothermal; low 
  1.23  head hydroelectric; biomass; landfill gas; and mixed municipal 
  1.24  solid waste, including refuse-derived fuel. 
  1.25     Subd. 3.  [BIOMASS.] "Biomass" includes methane or other 
  1.26  combustible gases derived from the processing of plant or animal 
  2.1   material; alternative fuels derived from soybeans and other 
  2.2   agricultural plant oils or animal fats; combustion of barley 
  2.3   hulls, corn, soy-based products, or other agricultural products; 
  2.4   and wood residue, including chipped wood, bark, brush, and 
  2.5   sawdust, or other wood products such as short-rotation woody or 
  2.6   fibrous agricultural crops. 
  2.7      Subd. 4.  [ELECTRICITY SUPPLIER.] "Electricity supplier" 
  2.8   means an entity that is subject to section 216B.2422 and is: 
  2.9      (1) a public utility providing electric service at retail 
  2.10  to Minnesota consumers; or 
  2.11     (2) a public utility, generation and transmission 
  2.12  cooperative electric association, or municipal power agency that 
  2.13  provides electric service at wholesale to distribution utilities 
  2.14  for subsequent sale to Minnesota consumers at retail. 
  2.15     Subd. 5.  [2000 RENEWABLE ENERGY LEVEL.] "2000 renewable 
  2.16  energy level" means the percentage of total state electricity 
  2.17  consumption in 2000 that was derived from a qualifying renewable 
  2.18  energy resource, excluding electricity generated by renewable 
  2.19  energy facilities mandated by Laws 1994, chapter 641, or ordered 
  2.20  by the commission pursuant to that chapter. 
  2.21     Subd. 6.  [RENEWABLE ENERGY STANDARD.] "Renewable energy 
  2.22  standard" means the percentage of electric power consumed in the 
  2.23  state that must be derived from qualifying renewable energy 
  2.24  resources. 
  2.25     Subd. 7.  [RENEWABLE ENERGY OBJECTIVE.] "Renewable energy 
  2.26  objective" means the percentage of electric power consumed in 
  2.27  the state that electricity suppliers must make a good faith 
  2.28  effort to generate, or must procure from or purchase credits 
  2.29  from qualifying renewable energy resources, for distribution to 
  2.30  retail customers in this state. 
  2.31     Sec. 3.  [216B.1686] [STANDARDS AND OBJECTIVES.] 
  2.32     Subdivision 1.  [RENEWABLE ENERGY STANDARD.] (a) The 
  2.33  initial renewable energy standard is established at a level 
  2.34  equivalent to the 2000 renewable energy level.  The renewable 
  2.35  energy standard must rise by no less than an additional one-half 
  2.36  percent of the total state electricity consumption annually by 
  3.1   no later than January 1, 2005, and each year thereafter through 
  3.2   December 31, 2015, as follows: 
  3.3      (1) by December 31, 2005, 2000 renewable level plus 
  3.4   one-half percent; 
  3.5      (2) by December 31, 2006, 2000 renewable level plus one 
  3.6   percent; 
  3.7      (3) by December 31, 2007, 2000 renewable level plus 1-1/2 
  3.8   percent; 
  3.9      (4) by December 31, 2008, 2000 renewable level plus two 
  3.10  percent; 
  3.11     (5) by December 31, 2009, 2000 renewable level plus 2-1/2 
  3.12  percent; 
  3.13     (6) by December 31, 2010, 2000 renewable level plus three 
  3.14  percent; 
  3.15     (7) by December 31, 2011, 2000 renewable level plus 3-1/2 
  3.16  percent; 
  3.17     (8) by December 31, 2012, 2000 renewable level plus four 
  3.18  percent; 
  3.19     (9) by December 31, 2013, 2000 renewable level plus 4-1/2 
  3.20  percent; and 
  3.21     (10) by December 31, 2014, 2000 renewable level plus five 
  3.22  percent. 
  3.23     (b) Each electricity supplier shall generate its allocated 
  3.24  portion, or shall procure or purchase credits for the amount of 
  3.25  electricity generated by a qualifying renewable energy resource 
  3.26  to meet its allocated portion, of the renewable energy standard. 
  3.27  That allocation must be the product of the supplier's total 
  3.28  electricity sales, in kilowatt-hours, to retail customers in 
  3.29  Minnesota or to a distribution utility for resale to retail 
  3.30  customers in Minnesota, multiplied by the renewable energy 
  3.31  standard.  The commission shall require the supplier to provide 
  3.32  evidence that the supplier is in compliance with this 
  3.33  subdivision in the commission's review of the supplier's 
  3.34  resource plan under section 216B.2422 and shall require any 
  3.35  supplier that is not in compliance to develop and implement a 
  3.36  plan for compliance approved by the commission. 
  4.1      Subd. 2.  [RENEWABLE ENERGY OBJECTIVE.] (a) The initial 
  4.2   renewable energy objective is established at a level equivalent 
  4.3   to the 2000 renewable energy level.  The renewable energy 
  4.4   objective must rise by no less than an additional one percent of 
  4.5   the total state electricity consumption annually by no later 
  4.6   than January 1, 2005, and each year thereafter through December 
  4.7   31, 2015, as follows: 
  4.8      (1) by December 31, 2005, 2000 renewable level plus one 
  4.9   percent; 
  4.10     (2) by December 31, 2006, 2000 renewable level plus two 
  4.11  percent; 
  4.12     (3) by December 31, 2007, 2000 renewable level plus three 
  4.13  percent; 
  4.14     (4) by December 31, 2008, 2000 renewable level plus four 
  4.15  percent; 
  4.16     (5) by December 31, 2009, 2000 renewable level plus five 
  4.17  percent; 
  4.18     (6) by December 31, 2010, 2000 renewable level plus six 
  4.19  percent; 
  4.20     (7) by December 31, 2011, 2000 renewable level plus seven 
  4.21  percent; 
  4.22     (8) by December 31, 2012, 2000 renewable level plus eight 
  4.23  percent; 
  4.24     (9) by December 31, 2013, 2000 renewable level plus nine 
  4.25  percent; and 
  4.26     (10) by December 31, 2014, 2000 renewable level plus ten 
  4.27  percent. 
  4.28     (b) Each electricity supplier shall make a good faith 
  4.29  effort to generate its allocated portion, or shall procure or 
  4.30  purchase credits for the amount of electricity generated by a 
  4.31  qualifying renewable energy resource to meet its allocated 
  4.32  portion, of the renewable energy objective.  That allocation 
  4.33  must be the product of the supplier's total electricity sales, 
  4.34  in kilowatt-hours, to retail customers in Minnesota or to a 
  4.35  distribution utility for resale to retail customers in 
  4.36  Minnesota, multiplied by the renewable energy objective.  The 
  5.1   commission shall require the supplier to provide evidence that 
  5.2   the supplier is making the required good faith effort in the 
  5.3   commission's review of the supplier's resource plan under 
  5.4   section 216B.2422 and shall require any supplier that the 
  5.5   commission finds is not making the required good faith effort to 
  5.6   develop and implement a plan to make that effort approved by the 
  5.7   commission. 
  5.8      (c) Electric energy provided to retail customers under a 
  5.9   renewable rate option under section 216B.169 must be credited 
  5.10  toward an electricity supplier's objectives under this 
  5.11  subdivision provided the supplier generated or procured the 
  5.12  electric energy, the energy was generated using a qualifying 
  5.13  renewable energy resource, and the supplier is in compliance 
  5.14  with the requirements of subdivision 1. 
  5.15     (d) Of the renewable energy objective under this 
  5.16  subdivision, at least but no more than one-half percent by 2005 
  5.17  and one percent by 2010 must be electricity from the combustion 
  5.18  of biomass, or mixed municipal solid waste, including 
  5.19  refuse-derived fuel.  Electricity generated by an electric 
  5.20  generation facility using mixed municipal solid waste, including 
  5.21  refuse-derived fuel, as a primary fuel that has a power sales 
  5.22  agreement in effect on the effective date of this act that 
  5.23  terminates after December 31, 2010, does not count towards an 
  5.24  electricity supplier's obligation under subdivision 1 or 
  5.25  objective under this subdivision unless the power sales 
  5.26  agreement provides for rate adjustment in the event the facility 
  5.27  qualifies as a renewable energy source. 
  5.28     (e) The renewable energy that an electricity supplier 
  5.29  counts toward its obligation under subdivision 1 also counts 
  5.30  toward the electricity supplier's objective under this 
  5.31  subdivision. 
  5.32     Sec. 4.  [216B.1687] [RULES.] 
  5.33     The commission shall adopt rules necessary to implement 
  5.34  this act.  In developing these rules, the commission shall 
  5.35  establish mechanisms to constrain or cap the cost of complying 
  5.36  with this act and shall ensure that retail energy customers in 
  6.1   Minnesota are not burdened with uneconomic energy supplies.  An 
  6.2   electricity supplier must not be required to purchase 
  6.3   electricity under sections 216B.1685 to 216B.1687 for which the 
  6.4   cost per kilowatt-hour is more than four cents greater than the 
  6.5   supplier's average system cost per kilowatt-hour.  The 
  6.6   commission may exclude from an electricity supplier's total 
  6.7   annual sales of electricity the annual sales of electricity to 
  6.8   an industry that the commission finds is under significant 
  6.9   competitive or economic pressures, for purposes of calculating 
  6.10  that supplier's obligations under section 216B.1686.  To 
  6.11  facilitate compliance with this act, the commission, by rule or 
  6.12  order, shall establish a program for tradeable credits for 
  6.13  electricity generated using a qualifying renewable energy 
  6.14  resource. 
  6.15     Sec. 5.  [REPEALER.] 
  6.16     Minnesota Statutes 2002, section 216B.1691, is repealed. 
  6.17     Sec. 6.  [EFFECTIVE DATE.] 
  6.18     Sections 1 to 5 are effective the day following final 
  6.19  enactment.