1.1                          A bill for an act
  1.2             relating to energy; amending the definition of a 
  1.3             radioactive waste management facility; increasing 
  1.4             funding for renewable development; specifying the 
  1.5             applicability of the renewable development fund; 
  1.6             authorizing sufficient dry cask storage capacity to 
  1.7             allow the nuclear reactors at the Prairie Island 
  1.8             nuclear generation facility to operate until the end 
  1.9             of their current licenses; modifying duties of the 
  1.10            legislative energy task force; amending Minnesota 
  1.11            Statutes 2002, sections 116C.71, subdivision 7; 
  1.12            116C.779; 216B.1645, subdivision 2; 216B.1691, 
  1.13            subdivisions 1, 2; 216B.241, subdivision 1b; 
  1.14            216B.2424, subdivision 5; 216C.051, subdivisions 2, 3, 
  1.15            6, 9, by adding a subdivision; proposing coding for 
  1.16            new law in Minnesota Statutes, chapters 116C; 216B; 
  1.17            repealing Minnesota Statutes 2002, section 216C.051, 
  1.18            subdivisions 1, 4, 5. 
  1.19  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.20     Section 1.  Minnesota Statutes 2002, section 116C.71, 
  1.21  subdivision 7, is amended to read: 
  1.22     Subd. 7.  [RADIOACTIVE WASTE MANAGEMENT FACILITY.] 
  1.23  "Radioactive waste management facility" means a geographic site, 
  1.24  including buildings, structures, and equipment in or upon which 
  1.25  radioactive waste is retrievably or irretrievably disposed by 
  1.26  burial in soil or permanently stored.  An independent spent fuel 
  1.27  storage installation located on the site of a Minnesota nuclear 
  1.28  generation facility for dry cask storage of spent nuclear fuel 
  1.29  generated solely by that facility is not a radioactive waste 
  1.30  management facility. 
  1.31     Sec. 2.  Minnesota Statutes 2002, section 116C.779, is 
  1.32  amended to read: 
  2.1      116C.779 [FUNDING FOR RENEWABLE DEVELOPMENT.] 
  2.2      Subdivision 1.  [RENEWABLE DEVELOPMENT FUND.] (a) The 
  2.3   public utility that operates owns the Prairie Island nuclear 
  2.4   generating plant must transfer to a renewable development 
  2.5   account $500,000 each year for each dry cask containing spent 
  2.6   fuel that is located at the independent spent fuel storage 
  2.7   installation at Prairie Island after January 1, 1999 $8,500,000 
  2.8   annually.  Beginning January 1, 2005, if a contracted biomass 
  2.9   project of 50 megawatts is terminated, the public utility shall 
  2.10  transfer an additional $8,500,000 per year to the renewable 
  2.11  development account.  The fund transfer must be made if nuclear 
  2.12  waste is stored in a dry cask at the independent spent fuel 
  2.13  storage facility at Prairie Island for any part of a year in 
  2.14  which the plant is in operation.  Funds in the account may be 
  2.15  expended only for development of renewable and sustainable 
  2.16  energy sources.  Preference must be given to development of 
  2.17  renewable and sustainable energy source projects located within 
  2.18  the state. 
  2.19     (b) Expenditures from the account may only be made after 
  2.20  approval by order of the public utilities commission upon a 
  2.21  petition by the public utility.  
  2.22     Subd. 2.  [HYDROGEN ECONOMY RESEARCH.] (a) Notwithstanding 
  2.23  subdivision 1, $2,500,000 annually from the renewable 
  2.24  development account must be allocated to support basic and 
  2.25  applied research at the Minnesota hydrogen and renewables 
  2.26  research center at the University of Minnesota.  
  2.27     (b) Research funded under this subdivision must focus on: 
  2.28     (1) conversion of state wind resources to hydrogen for 
  2.29  energy storage and transportation to areas of energy demand; 
  2.30     (2) improvement of scalable hydrogen fuel cells for 
  2.31  stationary combined electricity generation and heating/cooling 
  2.32  function for residential and commercial use; and 
  2.33     (3) processing of agricultural and forestry plant products 
  2.34  for production of hydrogen and other fuels and sequestration of 
  2.35  carbon using a variety of means, including biocatalysis and 
  2.36  fermentation.  
  3.1      Sec. 3.  [116C.83] [AUTHORIZATION FOR ADDITIONAL DRY CASK 
  3.2   STORAGE.] 
  3.3      Subdivision 1.  [AUTHORIZATION TO END OF CURRENT PRAIRIE 
  3.4   ISLAND LICENSE.] (a) Subject to the cask storage limits of the 
  3.5   federal license for the independent spent fuel storage 
  3.6   installation at Prairie Island, the public utility that owns the 
  3.7   Prairie Island nuclear generation plant has authorization for 
  3.8   sufficient dry cask storage capacity at that installation to 
  3.9   allow:  
  3.10     (1) the unit 1 reactor at Prairie Island to operate until 
  3.11  the end of its current license in 2013; and 
  3.12     (2) the unit 2 reactor at Prairie Island to operate until 
  3.13  the end of its current license in 2014. 
  3.14     (b) A settlement agreement between the Mdewakanton Dakota 
  3.15  Tribal Council at Prairie Island, a federally recognized Indian 
  3.16  Tribe, and the public utility, to resolve outstanding issues 
  3.17  with respect to the provisions of Laws 1994, chapter 641, 
  3.18  article 1, section 4, shall provide for payments to be used for, 
  3.19  among other purposes, acquiring land in the state of Minnesota 
  3.20  for placement in trust.  
  3.21     Subd. 2.  [COMMISSION AND LEGISLATIVE PROCESS FOR FUTURE 
  3.22  ADDITIONAL AUTHORIZATION.] (a) Authorization of any additional 
  3.23  dry cask storage other than that provided for in subdivision 1, 
  3.24  or expansion or establishment of an independent spent fuel 
  3.25  storage facility at a nuclear generation facility in this state 
  3.26  is subject to approval of a certificate of need by the public 
  3.27  utilities commission pursuant to section 216B.243.  
  3.28     (b) The certificate of need approved by the commission 
  3.29  under paragraph (a) shall be stayed until the June 1 following 
  3.30  the next regular annual session of the legislature that begins 
  3.31  after the date of the commission decision to approve the 
  3.32  certificate of need.  The stay of the certificate of need shall 
  3.33  apply to the construction of the concrete pad and other site 
  3.34  structures of the independent spent fuel storage installation 
  3.35  and not the fabrication of spent fuel storage casks, if the 
  3.36  utility accepts the business risk associated therewith.  If the 
  4.1   legislature does not modify or reject the certificate of need 
  4.2   approved by the commission by law enacted during such regular 
  4.3   legislative session, authorization under the certificate of need 
  4.4   shall become effective on the expiration of the stay.  
  4.5      Subd. 3.  [OTHER CONDITIONS.] (a) The storage of spent 
  4.6   nuclear fuel in the pool and in dry casks at a nuclear 
  4.7   generating plant must be managed to facilitate the shipment of 
  4.8   waste out of state to a permanent or interim storage facility as 
  4.9   soon as feasible in a manner that allows the continued operation 
  4.10  of the plant consistent with sections 116C.71 to 116C.83 and 
  4.11  216B.1645, subdivision 2. 
  4.12     (b) The authorization for storage capacity pursuant to this 
  4.13  section is limited to the storage of spent nuclear fuel 
  4.14  generated by a Minnesota nuclear generation facility and stored 
  4.15  on the site of that facility. 
  4.16     Sec. 4.  [216B.0975] [DISCONNECTION DURING EXTREME HEAT 
  4.17  CONDITIONS; RECONNECTION.] 
  4.18     A utility may not effect an involuntary disconnection of 
  4.19  services in affected counties when an excessive heat watch, heat 
  4.20  advisory, or excessive heat warning issued by the national 
  4.21  weather service is in effect.  For purposes of this section, 
  4.22  "utility" means a public utility providing electric service, 
  4.23  municipal utility, or cooperative electric association. 
  4.24     Sec. 5.  Minnesota Statutes 2002, section 216B.1645, 
  4.25  subdivision 2, is amended to read: 
  4.26     Subd. 2.  [COST RECOVERY.] The expenses incurred by the 
  4.27  utility over the duration of the approved contract or useful 
  4.28  life of the investment and expenditures made pursuant to section 
  4.29  116C.779 and an agreement with the Mdewakanton Dakota Tribal 
  4.30  Council at Prairie Island regarding the provisions of Laws 1994, 
  4.31  chapter 641, article 1, section 4, shall be recoverable from the 
  4.32  ratepayers of the utility, to the extent they are not offset by 
  4.33  utility revenues attributable to the contracts, investments, or 
  4.34  expenditures.  Upon petition by a public utility, the commission 
  4.35  shall approve or approve as modified a rate schedule providing 
  4.36  for the automatic adjustment of charges to recover the expenses 
  5.1   or costs approved by the commission, which, in the case of 
  5.2   transmission expenditures, are limited to the portion of actual 
  5.3   transmission costs that are directly allocable to the need to 
  5.4   transmit power from the renewable sources of energy.  The 
  5.5   commission may not approve recovery of the costs for that 
  5.6   portion of the power generated from sources governed by this 
  5.7   section that the utility sells into the wholesale market.  
  5.8      Sec. 6.  Minnesota Statutes 2002, section 216B.1691, 
  5.9   subdivision 1, is amended to read: 
  5.10     Subdivision 1.  [DEFINITIONS.] (a) "Eligible energy 
  5.11  technology" means an energy technology that: 
  5.12     (1) generates electricity from the following renewable 
  5.13  energy sources:  solar,; wind,; hydroelectric with a capacity of 
  5.14  less than 60 megawatts,; or biomass, which shall include an 
  5.15  energy recovery facility used to capture the heat value of mixed 
  5.16  municipal solid waste including refuse-derived fuel as a primary 
  5.17  fuel; and 
  5.18     (2) was not mandated by state energy law or commission 
  5.19  order enacted or issued prior to August 1, 2001. 
  5.20     (b) "Electric utility" means a public utility providing 
  5.21  electric service, a generation and transmission cooperative 
  5.22  electric association, or a municipal power agency. 
  5.23     Sec. 7.  Minnesota Statutes 2002, section 216B.1691, 
  5.24  subdivision 2, is amended to read: 
  5.25     Subd. 2.  [ELIGIBLE ENERGY OBJECTIVES.] (a) Each electric 
  5.26  utility shall make a good faith effort to generate or procure 
  5.27  sufficient electricity generated by an eligible energy 
  5.28  technology to provide its retail consumers, or the retail 
  5.29  members of a distribution utility to which the electric utility 
  5.30  provides wholesale electric service, so that: 
  5.31     (1) commencing in 2005, at least one percent of the 
  5.32  electric energy provided to those retail customers is generated 
  5.33  by eligible energy technologies; 
  5.34     (2) the amount provided under clause (1) is increased by 
  5.35  one percent each year until 2015; 
  5.36     (3) ten percent of the electric energy provided to retail 
  6.1   customers in Minnesota is generated by eligible energy 
  6.2   technologies; and 
  6.3      (4) of the eligible energy technology generation required 
  6.4   under clauses (1) and (2), at least but not more than 0.5 
  6.5   percent of the energy must be generated by biomass energy 
  6.6   technologies, including an energy recovery facility used to 
  6.7   capture the heat value of mixed municipal solid waste including 
  6.8   refuse-derived fuel as a primary fuel, by 2010 and one percent 
  6.9   by 2015 2005.  By 2010, 1.0 percent of the eligible energy 
  6.10  technology generation required under clauses (1) and (2) shall 
  6.11  be generated by the sources described in this clause.  An energy 
  6.12  recovery facility, as described in subdivision 1, clause (1), 
  6.13  with a power sales agreement in effect as of the date of this 
  6.14  act that terminates after December 31, 2010, does not qualify as 
  6.15  an eligible energy technology unless the agreement provides for 
  6.16  rate adjustment in the event the facility qualifies as a 
  6.17  renewable energy source. 
  6.18     (b) Each electric utility shall report on its activities 
  6.19  and progress with regard to these objectives in their filings 
  6.20  under section 216B.2422. 
  6.21     (c) The commission, in consultation with the commissioner 
  6.22  of commerce, shall compile the information provided to the 
  6.23  commission under paragraph (b), and report to the chairs of the 
  6.24  house of representatives and senate committees with jurisdiction 
  6.25  over energy and environment policy issues as to the progress of 
  6.26  utilities in the state in increasing the amount of renewable 
  6.27  energy provided to retail customers, with any recommendations 
  6.28  for regulatory or legislative action, by January 15, 2002. 
  6.29     Sec. 8.  Minnesota Statutes 2002, section 216B.241, 
  6.30  subdivision 1b, is amended to read: 
  6.31     Subd. 1b.  [CONSERVATION IMPROVEMENT BY COOPERATIVE 
  6.32  ASSOCIATION OR MUNICIPALITY.] (a) This subdivision applies to: 
  6.33     (1) a cooperative electric association that provides retail 
  6.34  service to its members; 
  6.35     (2) a municipality that provides electric service to retail 
  6.36  customers; and 
  7.1      (3) a municipality with gross operating revenues in excess 
  7.2   of $5,000,000 from sales of natural gas to retail customers.  
  7.3      (b) Each cooperative electric association and municipality 
  7.4   subject to this subdivision shall spend and invest for energy 
  7.5   conservation improvements under this subdivision the following 
  7.6   amounts: 
  7.7      (1) for a municipality, 0.5 percent of its gross operating 
  7.8   revenues from the sale of gas and 1.5 percent of its gross 
  7.9   operating revenues from the sale of electricity, excluding gross 
  7.10  operating revenues from electric and gas service provided in the 
  7.11  state to large electric customer facilities; and 
  7.12     (2) for a cooperative electric association, 1.5 percent of 
  7.13  its gross operating revenues from service provided in the state, 
  7.14  excluding gross operating revenues from service provided in the 
  7.15  state to large electric customer facilities indirectly through a 
  7.16  distribution cooperative electric association. 
  7.17     (c) Each municipality and cooperative electric association 
  7.18  subject to this subdivision shall identify and implement energy 
  7.19  conservation improvement spending and investments that are 
  7.20  appropriate for the municipality or association, except that a 
  7.21  municipality or association may not spend or invest for energy 
  7.22  conservation improvements that directly benefit a large electric 
  7.23  customer facility for which the commissioner has issued an 
  7.24  exemption under subdivision 1a, paragraph (b). 
  7.25     (d) Each municipality and cooperative electric association 
  7.26  subject to this subdivision may spend and invest annually up to 
  7.27  ten percent of the total amount required to be spent and 
  7.28  invested on energy conservation improvements under this 
  7.29  subdivision on research and development projects that meet the 
  7.30  definition of energy conservation improvement in subdivision 1 
  7.31  and that are funded directly by the municipality or cooperative 
  7.32  electric association.  
  7.33     (e) Load-management activities that do not reduce energy 
  7.34  use but that increase the efficiency of the electric system may 
  7.35  be used to meet the following percentage of the conservation 
  7.36  investment and spending requirements of this subdivision: 
  8.1      (1) 2002 - 90 percent; 
  8.2      (2) 2003 - 80 percent; 
  8.3      (3) 2004 - 65 percent; and 
  8.4      (4) 2005 and thereafter - 50 percent. 
  8.5      (f) A generation and transmission cooperative electric 
  8.6   association that provides energy services to cooperative 
  8.7   electric associations that provide electric service at retail to 
  8.8   consumers may invest in energy conservation improvements on 
  8.9   behalf of the associations it serves and may fulfill the 
  8.10  conservation, spending, reporting, and energy savings goals on 
  8.11  an aggregate basis.  A municipal power agency or other 
  8.12  not-for-profit entity that provides energy service to municipal 
  8.13  utilities that provide electric service at retail may invest in 
  8.14  energy conservation improvements on behalf of the municipal 
  8.15  utilities it serves and may fulfill the conservation, spending, 
  8.16  reporting, and energy savings goals on an aggregate basis, under 
  8.17  an agreement between the municipal power agency or 
  8.18  not-for-profit entity and each municipal utility for funding the 
  8.19  investments. 
  8.20     (g) By June 1, 2002, and every two years thereafter, each 
  8.21  municipality or cooperative shall file an overview of its 
  8.22  conservation improvement plan with the commissioner.  With this 
  8.23  overview, the municipality or cooperative shall also provide an 
  8.24  evaluation to the commissioner detailing its energy conservation 
  8.25  improvement spending and investments for the previous period.  
  8.26  The evaluation must briefly describe each conservation program 
  8.27  and must specify the energy savings or increased efficiency in 
  8.28  the use of energy within the service territory of the utility or 
  8.29  association that is the result of the spending and investments.  
  8.30  The evaluation must analyze the cost effectiveness of the 
  8.31  utility's or association's conservation programs, using a list 
  8.32  of baseline energy and capacity savings assumptions developed in 
  8.33  consultation with the department. 
  8.34  The commissioner shall review each evaluation and make 
  8.35  recommendations, where appropriate, to the municipality or 
  8.36  association to increase the effectiveness of conservation 
  9.1   improvement activities.  Up to three percent of a utility's 
  9.2   conservation spending obligation under this section may be used 
  9.3   for program pre-evaluation, testing, and monitoring and program 
  9.4   evaluation.  The overview filed by a municipality with less than 
  9.5   $2,500,000 in annual gross revenues from the retail sale of 
  9.6   electric service may consist of a letter from the governing 
  9.7   board of the municipal utility to the department providing the 
  9.8   amount of annual conservation spending required of that 
  9.9   municipality and certifying that the required amount has been 
  9.10  spent on conservation programs pursuant to this subdivision.  
  9.11     (h) The commissioner shall also review each evaluation for 
  9.12  whether a portion of the money spent on residential conservation 
  9.13  improvement programs is devoted to programs that directly 
  9.14  address the needs of renters and low-income persons unless an 
  9.15  insufficient number of appropriate programs are available.  For 
  9.16  the purposes of this subdivision and subdivision 2, "low-income" 
  9.17  means an income at or below 50 percent of the state median 
  9.18  income.  
  9.19     (i) As part of its spending for conservation improvement, a 
  9.20  municipality or association may contribute to the energy and 
  9.21  conservation account.  A municipality or association may propose 
  9.22  to the commissioner to designate that all or a portion of funds 
  9.23  contributed to the account be used for research and development 
  9.24  projects that can best be implemented on a statewide basis.  Any 
  9.25  amount contributed must be remitted to the commissioner by 
  9.26  February 1 of each year. 
  9.27     (j) A municipality may spend up to 50 percent of its 
  9.28  required spending under this section to refurbish an existing 
  9.29  district heating or cooling system. 
  9.30     Sec. 9.  Minnesota Statutes 2002, section 216B.2424, 
  9.31  subdivision 5, is amended to read: 
  9.32     Subd. 5.  [MANDATE.] (a) A public utility, as defined in 
  9.33  section 216B.02, subdivision 4, that operates a nuclear-powered 
  9.34  electric generating plant within this state must construct and 
  9.35  operate, purchase, or contract to construct and operate (1) by 
  9.36  December 31, 1998, 50 megawatts of electric energy installed 
 10.1   capacity generated by farm-grown closed-loop biomass scheduled 
 10.2   to be operational by December 31, 2001; and (2) by December 31, 
 10.3   1998, an additional 75 megawatts of installed capacity so 
 10.4   generated scheduled to be operational by December 31, 2002.  
 10.5      (b) Of the 125 megawatts of biomass electricity installed 
 10.6   capacity required under this subdivision, no more than 50 
 10.7   megawatts of this capacity may be provided by a facility that 
 10.8   uses poultry litter as its primary fuel source and any such 
 10.9   facility:  
 10.10     (1) need not use biomass that complies with the definition 
 10.11  in subdivision 1; 
 10.12     (2) must enter into a contract with the public utility for 
 10.13  such capacity, that has an average purchase price per megawatt 
 10.14  hour over the life of the contract that is equal to or less than 
 10.15  the average purchase price per megawatt hour over the life of 
 10.16  the contract in contracts approved by the public utilities 
 10.17  commission before April 1, 2000, to satisfy the mandate of this 
 10.18  section, and file that contract with the public utilities 
 10.19  commission prior to September 1, 2000; and 
 10.20     (3) must schedule such capacity to be operational by 
 10.21  December 31, 2002.  
 10.22     (c) Of the total 125 megawatts of biomass electric energy 
 10.23  installed capacity required under this section, no more than 75 
 10.24  megawatts may be provided by a single project.  
 10.25     (d) Of the 75 megawatts of biomass electric energy 
 10.26  installed capacity required under paragraph (a), clause (2), no 
 10.27  more than 25 33 megawatts of this capacity may be provided by a 
 10.28  St. Paul district heating and cooling system cogeneration 
 10.29  facility utilizing waste wood as a primary fuel source.  The St. 
 10.30  Paul district heating and cooling system cogeneration facility 
 10.31  need not use biomass that complies with the definition in 
 10.32  subdivision 1.  
 10.33     (e) The public utility must accept and consider on an equal 
 10.34  basis with other biomass proposals: 
 10.35     (1) a proposal to satisfy the requirements of this section 
 10.36  that includes a project that exceeds the megawatt capacity 
 11.1   requirements of either paragraph (a), clause (1) or (2), and 
 11.2   that proposes to sell the excess capacity to the public utility 
 11.3   or to other purchasers; and 
 11.4      (2) a proposal for a new facility to satisfy more than ten 
 11.5   but not more than 20 megawatts of the electrical generation 
 11.6   requirements by a small business-sponsored independent power 
 11.7   producer facility to be located within the northern quarter of 
 11.8   the state, which means the area located north of Constitutional 
 11.9   Route No. 8 as described in section 161.114, subdivision 2, and 
 11.10  that utilizes biomass residue wood, sawdust, bark, chipped wood, 
 11.11  or brush to generate electricity.  A facility described in this 
 11.12  clause is not required to utilize biomass complying with the 
 11.13  definition in subdivision 1, but must have the capacity required 
 11.14  by this clause operational by December 31, 2002. 
 11.15     (f) If a public utility files a contract with the 
 11.16  commission for electric energy installed capacity that uses 
 11.17  poultry litter as its primary fuel source, the commission must 
 11.18  do a preliminary review of the contract to determine if it meets 
 11.19  the purchase price criteria provided in paragraph (b), clause 
 11.20  (2), of this subdivision.  The commission shall perform its 
 11.21  review and advise the parties of its determination within 30 
 11.22  days of filing of such a contract by a public utility.  A public 
 11.23  utility may submit by September 1, 2000, a revised contract to 
 11.24  address the commission's preliminary determination.  
 11.25     (g) The commission shall finally approve, modify, or 
 11.26  disapprove no later than July 1, 2001, all contracts submitted 
 11.27  by a public utility as of September 1, 2000, to meet the mandate 
 11.28  set forth in this subdivision.  
 11.29     (h) If a public utility subject to this section exercises 
 11.30  an option to increase the generating capacity of a project in a 
 11.31  contract approved by the commission prior to April 25, 2000, to 
 11.32  satisfy the mandate in this subdivision, the public utility must 
 11.33  notify the commission by September 1, 2000, that it has 
 11.34  exercised the option and include in the notice the amount of 
 11.35  additional megawatts to be generated under the option 
 11.36  exercised.  Any review by the commission of the project after 
 12.1   exercise of such an option shall be based on the same criteria 
 12.2   used to review the existing contract. 
 12.3      (i) A facility specified in this subdivision qualifies for 
 12.4   exemption from property taxation under section 272.02, 
 12.5   subdivision 43. 
 12.6      Sec. 10.  Minnesota Statutes 2002, section 216C.051, 
 12.7   subdivision 2, is amended to read: 
 12.8      Subd. 2.  [ESTABLISHMENT.] (a) There is established a 
 12.9   legislative electric energy task force to study future electric 
 12.10  energy sources and costs and to make recommendations for 
 12.11  legislation for an environmentally and economically sustainable 
 12.12  and advantageous electric energy supply. 
 12.13     (b) The task force consists of: 
 12.14     (1) ten eight members of the house of representatives 
 12.15  including the chairs of the environment and natural resources 
 12.16  committee and regulated industries subcommittee committees and 
 12.17  eight six members to be appointed by the speaker of the 
 12.18  house, four three of whom must be from the minority caucus; and 
 12.19     (2) ten eight members of the senate including the chairs of 
 12.20  the environment and natural resources and jobs, energy, and 
 12.21  community development commerce and utilities committees and 
 12.22  eight six members to be appointed by the subcommittee on 
 12.23  committees, four three of whom must be from the minority caucus. 
 12.24     (c) The task force may employ staff, contract for 
 12.25  consulting services, and may reimburse the expenses of persons 
 12.26  requested to assist it in its duties other than state employees 
 12.27  or employees of electric utilities.  The director of the 
 12.28  legislative coordinating commission shall assist the task force 
 12.29  in administrative matters.  The task force shall elect cochairs, 
 12.30  one member of the house and one member of the senate from among 
 12.31  the committee and subcommittee chairs named to the committee.  
 12.32  The task force members from the house shall elect the house 
 12.33  cochair, and the task force members from the senate shall elect 
 12.34  the senate cochair. 
 12.35     Sec. 11.  Minnesota Statutes 2002, section 216C.051, 
 12.36  subdivision 3, is amended to read: 
 13.1      Subd. 3.  [FUTURE ENERGY SOLUTIONS; TECHNICAL AND ECONOMIC 
 13.2   ANALYSIS.] (a) In light of the electric energy guidelines 
 13.3   established in subdivision 7 and in light of existing 
 13.4   conservation improvement programs and plans, utility resource 
 13.5   plans, and other existing energy plans and analyses, the 
 13.6   legislative task force on energy shall undertake an analysis of 
 13.7   the technical and economic feasibility of an electric energy 
 13.8   future for the state that relies on environmentally and 
 13.9   economically sustainable and advantageous electric energy supply 
 13.10  utility resource plans and competitive bidding dockets before 
 13.11  the commission, the task force shall gather information and make 
 13.12  recommendations to the legislature regarding potential electric 
 13.13  energy resources.  The task force shall may contract with one or 
 13.14  more energy policy experts and energy economists to assist it in 
 13.15  its analysis.  The task force may not contract for service nor 
 13.16  employ any person who was involved in any capacity in any 
 13.17  portion of any proceeding before the public utilities 
 13.18  commission, the administrative law judge, the state court of 
 13.19  appeals, or the United States Nuclear Regulatory Commission 
 13.20  related to the dry cask storage proposal on Prairie Island.  The 
 13.21  task force must gather information on at least the following 
 13.22  electric energy resources, but may expand its inquiry as 
 13.23  warranted by the information collected: 
 13.24     (1) wind energy; 
 13.25     (2) hydrogen as a fuel carrier produced from renewable and 
 13.26  fossil fuel resources; 
 13.27     (3) biomass; 
 13.28     (4) decomposition gases produced by solid waste management 
 13.29  facilities; and 
 13.30     (5) solid waste as a direct fuel or refuse-derived fuel.  
 13.31     (b) The analysis must address In evaluating these electric 
 13.32  energy resources, the task force must consider at least the 
 13.33  following: 
 13.34     (1) to the best of forecasting abilities, how much electric 
 13.35  generation capacity and demand for electric energy is necessary 
 13.36  to maintain a strong economy and a high quality of life in the 
 14.1   state over the next 15 to 20 years; how is this demand level 
 14.2   affected by achievement of the maximum reasonably feasible and 
 14.3   cost-effective demand side management and generation and 
 14.4   distribution efficiencies; 
 14.5      (2) what alternative forms of energy can provide a stable 
 14.6   supply of energy and are producible and sustainable in the state 
 14.7   and at what cost; 
 14.8      (3) what are the costs to the state and ratepayers to 
 14.9   ensure that new electric energy generation utilizes less 
 14.10  environmentally damaging sources; how do those costs change as 
 14.11  the time frame for development and implementation of new 
 14.12  generation sources is compressed; 
 14.13     (4) what are the implications for delivery systems for 
 14.14  energy produced in areas of the state that do not now have 
 14.15  high-volume transmission capability; are new transmission 
 14.16  technologies being developed that can address some of the 
 14.17  concerns with transmission; can a more dispersed electric 
 14.18  generation system lessen the need for long-distance 
 14.19  transmission; 
 14.20     (5) what are the actual costs and benefits of purchasing 
 14.21  electricity and fuel to generate electricity from outside the 
 14.22  state; what are the present costs to the state's economy of 
 14.23  exporting a large percentage of the state's energy dollars and 
 14.24  what is the future economic impact of continuing to do so; 
 14.25     (6) are there benefits to be had from a large immediate 
 14.26  investment in quickly implementing alternative electric energy 
 14.27  sources in terms of developing an exportable technology and/or 
 14.28  commodity; is it feasible to turn around the flow of dollars for 
 14.29  energy so that the state imports dollars and exports energy and 
 14.30  energy technology; what is a reasonable time frame for the shift 
 14.31  if it is possible; 
 14.32     (7) are there taxation or regulatory barriers to developing 
 14.33  more sustainable and less problematic electric energy 
 14.34  generation; what are they specifically and how can they be 
 14.35  specifically addressed; 
 14.36     (8) can an approach be developed that moves quickly to 
 15.1   development and implementation of alternative energy sources 
 15.2   that can be forgiving of interim failures but that is also 
 15.3   sufficiently deliberate to ensure ultimate success on a large 
 15.4   scale; and 
 15.5      (9) in what specific ways can the state assist regional 
 15.6   energy suppliers to accelerate phasing out energy production 
 15.7   processes that produce wastes or emissions that must necessarily 
 15.8   be carefully controlled and monitored to minimize adverse 
 15.9   effects on the environment and human health and to assist in 
 15.10  developing and implementing base load energy production that 
 15.11  both prevents or minimizes by its nature adverse environmental 
 15.12  and human health effects and utilizes resources that are 
 15.13  available or producible in the state; 
 15.14     (10) whether there is a need to establish additional 
 15.15  dislocated worker assistance for workers at the Prairie Island 
 15.16  nuclear power plant; if so, how that assistance should be 
 15.17  structured; 
 15.18     (11) can the state monitor, evaluate, and affect federal 
 15.19  actions relating to permanent storage of high-level radioactive 
 15.20  waste; what actions by the state over what period of time would 
 15.21  expedite federal action to take responsibility for the waste; 
 15.22     (12) should the state establish a legislative oversight 
 15.23  commission on energy issues; should the responsibilities of an 
 15.24  oversight commission be coordinated with the activities of the 
 15.25  public utilities commission and the department of public service 
 15.26  and if so, how; and 
 15.27     (13) is it feasible to convert existing nuclear power and 
 15.28  coal-fired electric generating plants to utilization of energy 
 15.29  sources that result in significantly less environmental damage; 
 15.30  if so, what are the short-term and long-term costs and benefits 
 15.31  of doing so; how do shorter or longer time periods for 
 15.32  conversion affect the cost/benefit analysis. 
 15.33     (c) The task force must study issues related to the 
 15.34  transportation of spent nuclear fuel from this state to interim 
 15.35  or permanent repositories outside this state.  
 15.36     Sec. 12.  Minnesota Statutes 2002, section 216C.051, is 
 16.1   amended by adding a subdivision to read: 
 16.2      Subd. 4a.  [REPORT AND RECOMMENDATIONS.] By January 15, 
 16.3   2005, and every two years thereafter, the task force shall 
 16.4   submit a report to the chairs of the committees in the house of 
 16.5   representatives and in the senate that have responsibility for 
 16.6   energy and for environmental and natural resources issues that 
 16.7   contains an overview of information gathered and analyses that 
 16.8   have been prepared, and specific recommendations, if any, for 
 16.9   legislative action that will ensure development and 
 16.10  implementation of electric energy policy that will provide the 
 16.11  state with adequate, sustainable, and economic electric power 
 16.12  for the long-term.  
 16.13     Sec. 13.  Minnesota Statutes 2002, section 216C.051, 
 16.14  subdivision 6, is amended to read: 
 16.15     Subd. 6.  [ASSESSMENT; APPROPRIATION.] On request by the 
 16.16  cochairs of the legislative task force and after approval of the 
 16.17  legislative coordinating commission, the commissioner of 
 16.18  commerce shall assess from all public utilities, generation and 
 16.19  transmission cooperative electric associations, and municipal 
 16.20  power agencies providing electric or natural gas services in 
 16.21  Minnesota, in addition to assessments made under section 
 16.22  216B.62, the amount requested for the operation of the task 
 16.23  force not to exceed $150,000 $250,000 in a fiscal year.  The 
 16.24  amount assessed under this section is appropriated to the 
 16.25  director of the legislative coordinating commission for those 
 16.26  purposes, and is available until expended.  The department shall 
 16.27  apportion those costs among all energy utilities in proportion 
 16.28  to their respective gross operating revenues from the sale of 
 16.29  gas or electric service within the state during the last 
 16.30  calendar year.  For the purposes of administrative efficiency, 
 16.31  the department shall assess energy utilities and issue bills in 
 16.32  accordance with the billing and assessment procedures provided 
 16.33  in section 216B.62, to the extent that these procedures do not 
 16.34  conflict with this subdivision. 
 16.35     Sec. 14.  Minnesota Statutes 2002, section 216C.051, 
 16.36  subdivision 9, is amended to read: 
 17.1      Subd. 9.  [EXPIRATION.] This section is repealed June 
 17.2   30, 2005 2007. 
 17.3      Sec. 15.  [REDUCTION OF BIOMASS MANDATE.] 
 17.4      Notwithstanding Minnesota Statutes, section 216B.2424, the 
 17.5   biomass electric energy mandate shall be reduced from 125 
 17.6   megawatts to 83 megawatts.  The public utilities commission 
 17.7   shall not approve any request for a deadline extension for 
 17.8   obtaining financing beyond September 1, 2004, for any contract 
 17.9   previously approved to satisfy a portion of the biomass 
 17.10  mandate.  Any new or expanded contract for mandated biomass 
 17.11  above a total of 75 megawatts contracted for pursuant to 
 17.12  Minnesota Statutes, section 216B.2424, shall be limited to the 
 17.13  public utility's avoided cost of generation.  
 17.14     Sec. 16.  [REFURBISHMENT OF METROPOLITAN GENERATING 
 17.15  PLANTS.] 
 17.16     (a) The public utility that owns the Prairie Island nuclear 
 17.17  generation facility shall immediately provide all remaining 
 17.18  information that the commission may request with regard to its 
 17.19  plans to undertake the repowering and upgrading of its electric 
 17.20  generation facilities located in the metropolitan area, as 
 17.21  described in its metropolitan emission reduction plan filed with 
 17.22  the public utilities commission in July 2002.  The commission 
 17.23  shall within six months render its decision on the plan. 
 17.24     (b) Notwithstanding Minnesota Statutes, section 216B.1692, 
 17.25  subdivision 1, clause (2), and subdivision 5, paragraphs (c) and 
 17.26  (d), all investments in repowering, emissions reduction 
 17.27  technologies and equipment, and power plant rehabilitation and 
 17.28  life extension included in the plan filed in July 2002 and 
 17.29  currently pending before the commission are deemed qualifying 
 17.30  projects under Minnesota Statutes, section 216B.1692, and all 
 17.31  costs related to all such investments are eligible for rider 
 17.32  recovery under Minnesota Statutes, section 216B.1692, 
 17.33  subdivision 5.  
 17.34     Sec. 17.  [CREATION OF AN ENERGY ENTERPRISE ZONE.] 
 17.35     Subdivision 1.  [PURPOSE.] In order to encourage the 
 17.36  state's interest in innovative clean energy sources and in 
 18.1   recovery in the most economically problematic regions of the 
 18.2   state, an energy enterprise zone is hereby authorized, to 
 18.3   consist of: 
 18.4      (1) one or more industrial sites capable of hosting at 
 18.5   least 750 megawatts of baseload or intermediate electrical 
 18.6   generation capacity, which shall not exceed 5,000 acres; and 
 18.7      (2) one or more sites capable of hosting up to 250 
 18.8   megawatts of renewable or hydrogen-fueled electrical generation 
 18.9   capacity not to exceed the aggregate of 250 megawatts.  
 18.10     Subd. 2.  [ELIGIBILITY FOR ENERGY ENTERPRISE ZONE 
 18.11  DESIGNATION.] In order to be eligible for designation as an 
 18.12  energy enterprise zone under this section, a proposed energy 
 18.13  project must: 
 18.14     (1) make use of an innovative generation technology with 
 18.15  production efficiencies greater than traditional generation 
 18.16  technologies and with significantly reduced emissions; 
 18.17     (2) be located in the taconite tax relief area of the state 
 18.18  on a site with infrastructure to support new or expanded 
 18.19  development and be designated by the commissioner of the iron 
 18.20  range resources and rehabilitation board under subdivision 3; 
 18.21  and 
 18.22     (3) for the renewable or hydrogen-fueled project sites, use 
 18.23  as a primary fuel source solar, wind, fuel cells, pumped 
 18.24  storage, or biomass energy, hydrogen, or hydroelectric energy 
 18.25  with a capacity of less than 60 megawatts.  
 18.26     Subd. 3.  [DESIGNATION OF ELIGIBLE AREA.] Upon receiving a 
 18.27  proposal for an energy enterprise zone under this section, the 
 18.28  commissioner of the iron range resources and rehabilitation 
 18.29  board shall determine whether the energy project satisfies the 
 18.30  criteria in subdivision 1 and shall designate the energy 
 18.31  enterprise zone.  The commissioner shall give priority to any 
 18.32  projects that have received prior financial and other support 
 18.33  from the board.  
 18.34     Subd. 4.  [REGULATORY INCENTIVES.] (a) Projects designated 
 18.35  as energy enterprise zones under this section: 
 18.36     (1) are granted a certificate of need under Minnesota 
 19.1   Statutes, section 216B.243, for the generation facilities and 
 19.2   transmission infrastructure associated with the generation 
 19.3   facilities, but are subject to all applicable environmental 
 19.4   review and permitting procedures of Minnesota Statutes, sections 
 19.5   116C.51 to 116C.69; 
 19.6      (2) once permitted and constructed, are eligible to 
 19.7   increase the capacity of the associated transmission facilities 
 19.8   without additional state review upon filing notice with the 
 19.9   commission; 
 19.10     (3) have the power of eminent domain, which shall be 
 19.11  limited to the sites and routes approved by the environmental 
 19.12  quality board for the project facilities; 
 19.13     (4) shall qualify as an "eligible energy technology" for 
 19.14  purposes of Minnesota Statutes, section 216B.1691; and 
 19.15     (5) shall, prior to the approval by the commission of any 
 19.16  arrangement of an eligible entity to build or expand a 
 19.17  fossil-fuel-fired generation facility, or enter into an 
 19.18  agreement to purchase capacity or energy from such a facility 
 19.19  for a term exceeding five years, be considered as a supply 
 19.20  option for such generation facility, and the commission shall 
 19.21  ensure such consideration and take any action with respect to 
 19.22  such supply proposal that it deems to be in the best interest of 
 19.23  ratepayers.  "Eligible entity" means any entity subject to the 
 19.24  resource planning requirements of state law, and whose most 
 19.25  recent resource plan demonstrates a need for at least 450 
 19.26  megawatts of new generation capacity or energy resources.  
 19.27     (b) This subdivision does not apply to competitive 
 19.28  solicitations for which bids have been received or proposals to 
 19.29  add utility-owned resources that are pending before the public 
 19.30  utilities commission.  
 19.31     Sec. 18.  [RENEWABLE DEVELOPMENT FUND ADMINISTRATION.] 
 19.32     The public utilities commission may review the 
 19.33  appropriateness of the transfer of the administration of the 
 19.34  renewable development account under Minnesota Statutes, section 
 19.35  116C.779, to an organization with a board of directors that 
 19.36  includes representatives from the public utility currently 
 20.1   administering the fund, environmental organizations, the 
 20.2   Mdewakanton Dakota Community, and other affected communities. 
 20.3      Sec. 19.  [SUNSET.] 
 20.4      Minnesota Statutes, section 116C.779, subdivision 2, 
 20.5   expires June 30, 2007.  Minnesota Statutes, section 216B.241, 
 20.6   subdivision 1b, paragraph (j), expires July 1, 2007.  
 20.7      Sec. 20.  [REPEALER.] 
 20.8      Minnesota Statutes 2002, section 216C.051, subdivisions 1, 
 20.9   4, and 5, are repealed.  
 20.10     Sec. 21.  [EFFECTIVE DATE.] 
 20.11     Sections 1 to 20 are effective the day following final 
 20.12  enactment.