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             clarifying disconnection of residential utility; 
  1.7             authorizing sufficient dry cask storage capacity to 
  1.8             allow the nuclear reactors at the Prairie Island 
  1.9             nuclear generation facility to operate until the end 
  1.10            of their current licenses; providing for environmental 
  1.11            review; providing incentives; providing for township 
  1.12            agreements; modifying duties of the legislative energy 
  1.13            task force; appropriating money; amending Minnesota 
  1.14            Statutes 2002, sections 116C.71, subdivision 7; 
  1.15            116C.779; 216B.095; 216B.097, by adding a subdivision; 
  1.16            216B.1645, by adding a subdivision; 216B.1691, 
  1.17            subdivisions 1, 2; 216B.241, subdivision 1b; 
  1.18            216B.2411; 216B.2424, subdivision 5, by adding a 
  1.19            subdivision; 216C.051, subdivisions 3, 9, by adding a 
  1.20            subdivision; 216C.41, subdivisions 1, 2, 3, 4, 5, by 
  1.21            adding a subdivision; proposing coding for new law in 
  1.22            Minnesota Statutes, chapters 116C; 216B; repealing 
  1.23            Minnesota Statutes 2002, section 216C.051, 
  1.24            subdivisions 1, 4, 5. 
  1.25  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.26     Section 1.  Minnesota Statutes 2002, section 116C.71, 
  1.27  subdivision 7, is amended to read: 
  1.28     Subd. 7.  [RADIOACTIVE WASTE MANAGEMENT FACILITY.] 
  1.29  "Radioactive waste management facility" means a geographic site, 
  1.30  including buildings, structures, and equipment in or upon which 
  1.31  radioactive waste is retrievably or irretrievably disposed by 
  1.32  burial in soil or permanently stored.  An independent spent fuel 
  1.33  storage installation located on the site of a Minnesota nuclear 
  1.34  generation facility for dry cask storage of spent nuclear fuel 
  1.35  generated solely by that facility is not a radioactive waste 
  2.1   management facility. 
  2.2      Sec. 2.  Minnesota Statutes 2002, section 116C.779, is 
  2.3   amended to read: 
  2.4      116C.779 [FUNDING FOR RENEWABLE DEVELOPMENT.] 
  2.5      Subdivision 1.  [RENEWABLE DEVELOPMENT FUND.] (a) The 
  2.6   public utility that operates owns the Prairie Island nuclear 
  2.7   generating plant must transfer to a renewable development 
  2.8   account $500,000 each year for each dry cask containing spent 
  2.9   fuel that is located at the independent spent fuel storage 
  2.10  installation at Prairie Island after January 1, 1999 $12,000,000 
  2.11  annually.  The fund transfer must be made if nuclear waste is 
  2.12  stored in a dry cask at the independent spent fuel storage 
  2.13  facility at Prairie Island for any part of a year.  Funds in the 
  2.14  account may be expended only for development of renewable energy 
  2.15  sources. Preference must be given to development of renewable 
  2.16  energy source projects located within the state. 
  2.17     (b) Expenditures from the account may only be made after 
  2.18  approval by order of the public utilities commission upon a 
  2.19  petition by the public utility.  
  2.20     Subd. 2.  [HYDROGEN ECONOMY RESEARCH.] (a) Notwithstanding 
  2.21  subdivision 1, $2,500,000 annually from the renewable 
  2.22  development account must be allocated from unobligated funds in 
  2.23  the account as of June 30, 2003, to support basic and applied 
  2.24  research at the Minnesota hydrogen and renewables research 
  2.25  center at the University of Minnesota.  These funds shall be 
  2.26  transferred to the University of Minnesota on or before July 1 
  2.27  of each year.  The University shall ensure that at least 25 
  2.28  percent of these funds are available for basic and applied 
  2.29  research, for construction and deployment of research 
  2.30  technologies, or for other purposes in support of this research, 
  2.31  at one rural campus or experiment station. 
  2.32     (b) Research funded under this subdivision must focus on: 
  2.33     (1) conversion of state wind resources to hydrogen for 
  2.34  energy storage and transportation to areas of energy demand; 
  2.35     (2) improvement of scalable hydrogen fuel cells for 
  2.36  stationary combined electricity generation and heating/cooling 
  3.1   function for residential and commercial use; and 
  3.2      (3) processing of agricultural and forestry plant products 
  3.3   for production of hydrogen and other fuels and sequestration of 
  3.4   carbon using a variety of means, including biocatalysis and 
  3.5   fermentation.  
  3.6      Subd. 3.  [WIND ENERGY PRODUCTION INCENTIVE.] (a) Until 
  3.7   January 1, 2018, up to $5,000,000 annually must be allocated 
  3.8   from available funds in the account to fund the renewable energy 
  3.9   production incentive for up to 100 megawatts of electricity 
  3.10  generated by wind energy conversion systems larger than 40 
  3.11  kilowatts in size that are eligible for the incentive under 
  3.12  section 216C.41.  Of this amount, up to $500,000 annually may be 
  3.13  used for production incentives for on-farm biogas recovery 
  3.14  facilities that are eligible for the incentive under section 
  3.15  216C.41.  Any portion of the $7,000,000 not expended in any 
  3.16  calendar year for the incentive is available for other spending 
  3.17  purposes under this section.  This subdivision does not create 
  3.18  an obligation to contribute funds to the account.  
  3.19     (b) The department of commerce shall determine eligibility 
  3.20  of projects under section 216C.41 for the purposes of this 
  3.21  subdivision.  At least quarterly, the department of commerce 
  3.22  shall notify the public utility of the name and address of each 
  3.23  eligible project owner and the amount due to each project under 
  3.24  section 216C.41.  The public utility shall make payments within 
  3.25  15 working days after receipt of notification of payments due.  
  3.26  Payments made more than 15 working days following receipt of 
  3.27  notification of payments due must include late fees of: 
  3.28     (1) five percent for payments made up to 20 working days of 
  3.29  notification; 
  3.30     (2) ten percent for payments made up to 25 working days of 
  3.31  notification; and 
  3.32     (3) 25 percent for payments made after 25 working days of 
  3.33  notification.  
  3.34     Late fees required under this section may not be charged to 
  3.35  the renewable development account and may not be recovered from 
  3.36  ratepayers. 
  4.1      Subd. 4.  [CAPITAL ASSISTANCE.] Up to $3,000,000 annually 
  4.2   must be allocated to provide capital assistance in the form of 
  4.3   low- or no-interest loans, grants, or other financial means to 
  4.4   reduce the capital costs for the construction of wind energy 
  4.5   conversion systems of two megawatts or less of nameplate 
  4.6   capacity and on-farm biogas recovery facilities as that term is 
  4.7   defined in section 216C.41. 
  4.8      Sec. 3.  [116C.83] [AUTHORIZATION FOR ADDITIONAL DRY CASK 
  4.9   STORAGE.] 
  4.10     Subdivision 1.  [AUTHORIZATION TO END OF CURRENT PRAIRIE 
  4.11  ISLAND LICENSE.] (a) Subject to the cask storage limits of the 
  4.12  federal license for the independent spent fuel storage 
  4.13  installation at Prairie Island, the public utility that owns the 
  4.14  Prairie Island nuclear generation plant has authorization for 
  4.15  sufficient dry cask storage capacity at that installation to 
  4.16  allow:  
  4.17     (1) the unit 1 reactor at Prairie Island to operate until 
  4.18  the end of its current license in 2013; and 
  4.19     (2) the unit 2 reactor at Prairie Island to operate until 
  4.20  the end of its current license in 2014. 
  4.21     (b) A settlement agreement between the Mdewakanton Dakota 
  4.22  Tribal Council at Prairie Island, a federally recognized Indian 
  4.23  Tribe, and the public utility, to resolve outstanding issues 
  4.24  with respect to the provisions of Laws 1994, chapter 641, 
  4.25  article 1, section 4, shall provide for payments to be used for, 
  4.26  among other purposes, acquiring land in the state of Minnesota 
  4.27  for placement in trust.  
  4.28     Subd. 2.  [COMMISSION AND LEGISLATIVE PROCESS FOR FUTURE 
  4.29  ADDITIONAL AUTHORIZATION.] Authorization of any additional dry 
  4.30  cask storage other than that provided for in subdivision 1, or 
  4.31  expansion or establishment of an independent spent fuel storage 
  4.32  facility at a nuclear generation facility in this state is 
  4.33  subject to approval of a certificate of need by the public 
  4.34  utilities commission pursuant to section 216B.243.  In any 
  4.35  proceeding under this subdivision, the commission may make a 
  4.36  decision that could result in a shutdown of a nuclear generating 
  5.1   facility.  In considering an application for a certificate of 
  5.2   need pursuant to this subdivision, the commission shall consider 
  5.3   whether the public utility that owns the nuclear generation 
  5.4   facility in the state is in compliance with section 216B.1691 
  5.5   and the utility's past performance under that section. 
  5.6      Subd. 3.  [OTHER CONDITIONS.] (a) The storage of spent 
  5.7   nuclear fuel in the pool and in dry casks at a nuclear 
  5.8   generating plant must be managed to facilitate the shipment of 
  5.9   waste out of state to a permanent or interim storage facility as 
  5.10  soon as feasible in a manner that allows the continued operation 
  5.11  of the plant consistent with sections 116C.71 to 116C.83 and 
  5.12  216B.1645, subdivision 4. 
  5.13     (b) The authorization for storage capacity pursuant to this 
  5.14  section is limited to the storage of spent nuclear fuel 
  5.15  generated by a Minnesota nuclear generation facility and stored 
  5.16  on the site of that facility. 
  5.17     Subd. 4.  [WATER STANDARDS.] The standards established in 
  5.18  section 116C.76, subdivision 1, clauses (1) to (3), apply to an 
  5.19  independent spent fuel installation.  Such an installation must 
  5.20  be operated in accordance with those standards. 
  5.21     Subd. 5.  [ENVIRONMENTAL REVIEW AND PROTECTION.] (a) The 
  5.22  siting, construction, and operation of an independent spent fuel 
  5.23  storage installation located on the site of a Minnesota 
  5.24  generation facility for dry cask storage of spent nuclear fuel 
  5.25  generated solely by that facility is subject to all 
  5.26  environmental review and protection provisions of chapters 115, 
  5.27  115B, 116, 116B, 116C, 116D, and 216B and rules associated with 
  5.28  those chapters, except those statutes and rules that apply 
  5.29  specifically to a radioactive waste management facility as 
  5.30  defined in section 116C.71, subdivision 7. 
  5.31     (b) An environmental impact statement is required under 
  5.32  chapter 116D for a proposal to construct and operate a new or 
  5.33  expanded independent spent fuel storage installation.  The 
  5.34  environmental quality board shall be the responsible 
  5.35  governmental unit for the environmental impact statement.  Prior 
  5.36  to finding the statement adequate, the board must find that the 
  6.1   applicant has demonstrated that the facility is designed to 
  6.2   provide a reasonable expectation that the operation of the 
  6.3   facility will not result in groundwater contamination in excess 
  6.4   of the standards established in section 116C.76, subdivision 1, 
  6.5   clauses (1) to (3). 
  6.6      Sec. 4.  Minnesota Statutes 2002, section 216B.095, is 
  6.7   amended to read: 
  6.8      216B.095 [DISCONNECTION DURING COLD WEATHER.] 
  6.9      The commission shall amend its rules governing 
  6.10  disconnection of residential utility customers who are unable to 
  6.11  pay for utility service during cold weather to include the 
  6.12  following: 
  6.13     (1) coverage of customers whose household income is less 
  6.14  than 50 percent of the state median income; 
  6.15     (2) a requirement that a customer who pays the utility at 
  6.16  least ten percent of the customer's income or the full amount of 
  6.17  the utility bill, whichever is less, in a cold weather month 
  6.18  cannot be disconnected during that month.  The customer's income 
  6.19  means the actual monthly income of the customer or the average 
  6.20  monthly income of the customer computed on an annual calendar 
  6.21  year, whichever is less, and does not include any amount 
  6.22  received for energy assistance; 
  6.23     (3) that the ten percent figure in clause (2) must be 
  6.24  prorated between energy providers proportionate to each 
  6.25  provider's share of the customer's total energy costs where the 
  6.26  customer receives service from more than one provider; 
  6.27     (4) verification of income by the local energy assistance 
  6.28  provider or the utility, unless the customer is automatically 
  6.29  eligible for protection against disconnection as a recipient of 
  6.30  any form of public assistance, including energy assistance, that 
  6.31  uses income eligibility in an amount at or below the income 
  6.32  eligibility in clause (1); 
  6.33     (5) a requirement that the customer receive referrals to 
  6.34  energy assistance, weatherization, conservation, or other 
  6.35  programs likely to reduce the customer's energy bills; and 
  6.36     (6) a requirement that customers who have demonstrated an 
  7.1   inability to pay on forms provided for that purpose by the 
  7.2   utility, and who make reasonably timely payments to the utility 
  7.3   under a payment plan that considers the financial resources of 
  7.4   the household, cannot be disconnected from utility service from 
  7.5   October 15 through April 15.  A customer who is receiving energy 
  7.6   assistance is deemed to have demonstrated an inability to pay. 
  7.7      For the purposes of this section, disconnection includes a 
  7.8   service or load limiter or any device that limits or interrupts 
  7.9   electric service in any way. 
  7.10     Sec. 5.  Minnesota Statutes 2002, section 216B.097, is 
  7.11  amended by adding a subdivision to read: 
  7.12     Subd. 4.  [APPLICATION TO SERVICE LIMITERS.] For the 
  7.13  purposes of this section, disconnection includes a service or 
  7.14  load limiter or any device that limits or interrupts electric 
  7.15  service in any way. 
  7.16     Sec. 6.  [216B.0975] [DISCONNECTION DURING EXTREME HEAT 
  7.17  CONDITIONS; RECONNECTION.] 
  7.18     A utility may not effect an involuntary disconnection of 
  7.19  residential services in affected counties when an excessive heat 
  7.20  watch, heat advisory, or excessive heat warning issued by the 
  7.21  national weather service is in effect.  For purposes of this 
  7.22  section, "utility" means a public utility providing electric 
  7.23  service, municipal utility, or cooperative electric association. 
  7.24     Sec. 7.  Minnesota Statutes 2002, section 216B.1645, is 
  7.25  amended by adding a subdivision to read: 
  7.26     Subd. 4.  [SETTLEMENT WITH MDEWAKANTON DAKOTA TRIBAL 
  7.27  COUNCIL AT PRAIRIE ISLAND.] The commission shall approve a rate 
  7.28  schedule providing for the automatic adjustment of charges to 
  7.29  recover the costs or expenses of a settlement between the public 
  7.30  utility that owns the Prairie Island nuclear generation facility 
  7.31  and the Mdewakanton Dakota Tribal Council at Prairie Island, 
  7.32  resolving outstanding disputes regarding the provisions of Laws 
  7.33  1994, chapter 641, article 1, section 4.  The settlement must 
  7.34  provide for annual payments, not to exceed $2,500,000 annually 
  7.35  by the public utility to the Prairie Island Indian Community, to 
  7.36  be used for, among other purposes, acquiring up to 1,500 
  8.1   contiguous or noncontiguous acres of land in the state of 
  8.2   Minnesota within 50 miles of the tribal community's reservation 
  8.3   at Prairie Island to be taken into trust by the federal 
  8.4   government for the benefit of the tribal community for housing 
  8.5   and other residential purposes.  The legislature acknowledges 
  8.6   that the intent to purchase land by the tribe for relocation 
  8.7   purposes is part of the settlement agreement and this 
  8.8   legislation.  However, the state, through the governor, reserves 
  8.9   the right to support or oppose any particular application to 
  8.10  place land in trust status. 
  8.11     Sec. 8.  Minnesota Statutes 2002, section 216B.1691, 
  8.12  subdivision 1, is amended to read: 
  8.13     Subdivision 1.  [DEFINITIONS.] (a) "Eligible energy 
  8.14  technology" means an energy technology that: 
  8.15     (1) generates electricity from the following renewable 
  8.16  energy sources:  solar,; wind,; hydroelectric with a capacity of 
  8.17  less than 60 megawatts,; hydrogen, provided that after January 
  8.18  1, 2010, the hydrogen must be generated from the resources 
  8.19  listed in this clause; or biomass, which shall include an energy 
  8.20  recovery facility used to capture the heat value of mixed 
  8.21  municipal solid waste or refuse-derived fuel from mixed 
  8.22  municipal solid waste as a primary fuel; and 
  8.23     (2) was not mandated by state law Laws 1994, chapter 641, 
  8.24  or by commission order enacted or issued pursuant to that 
  8.25  chapter prior to August 1, 2001. 
  8.26     (b) "Electric utility" means a public utility providing 
  8.27  electric service, a generation and transmission cooperative 
  8.28  electric association, or a municipal power agency. 
  8.29     (c) "Total retail electric sales" means the kilowatt-hours 
  8.30  of electricity sold in a year by an electric utility to retail 
  8.31  customers of the electric utility or to a distribution utility 
  8.32  for distribution to the retail customers of the distribution 
  8.33  utility. 
  8.34     Sec. 9.  Minnesota Statutes 2002, section 216B.1691, 
  8.35  subdivision 2, is amended to read: 
  8.36     Subd. 2.  [ELIGIBLE ENERGY OBJECTIVES.] (a) Each electric 
  9.1   utility shall make a good faith effort to generate or procure 
  9.2   sufficient electricity generated by an eligible energy 
  9.3   technology to provide its retail consumers, or the retail 
  9.4   members customers of a distribution utility to which the 
  9.5   electric utility provides wholesale electric service, so that: 
  9.6      (1) commencing in 2005, at least one percent of the 
  9.7   electric energy provided to those retail customers utility's 
  9.8   total retail electric sales is generated by eligible energy 
  9.9   technologies; 
  9.10     (2) the amount provided under clause (1) is increased by 
  9.11  one percent of the utility's total retail electric sales each 
  9.12  year until 2015; and 
  9.13     (3) ten percent of the electric energy provided to retail 
  9.14  customers in Minnesota is generated by eligible energy 
  9.15  technologies; and.  
  9.16     (4) (b) Of the eligible energy technology generation 
  9.17  required under paragraph (a), clauses (1) and (2), at least not 
  9.18  less than 0.5 percent of the energy must be generated by biomass 
  9.19  energy technologies, including an energy recovery facility used 
  9.20  to capture the heat value of mixed municipal solid waste or 
  9.21  refuse-derived fuel from mixed municipal solid waste as a 
  9.22  primary fuel, by 2010 and one percent by 2015. An energy 
  9.23  recovery facility, as described in subdivision 1, clause (1), 
  9.24  with a power sales agreement in effect as of the date of this 
  9.25  act that terminates after December 31, 2010, does not qualify as 
  9.26  an eligible energy technology unless the agreement provides for 
  9.27  rate adjustment in the event the facility qualifies as a 
  9.28  renewable energy source. 
  9.29     (b) (c) Energy generated by a facility using an eligible 
  9.30  energy technology shall count toward an electric utility's 
  9.31  objectives under this subdivision as provided in this 
  9.32  paragraph.  A kilowatt-hour produced by: 
  9.33     (1) an intermittent resource greater than two megawatts of 
  9.34  nameplate capacity or a peaking resource shall count as one 
  9.35  kilowatt-hour; 
  9.36     (2) an intermittent resource two megawatts or less of 
 10.1   nameplate capacity or an intermediate resource shall count as 
 10.2   two kilowatt-hours; and 
 10.3      (3) a baseload resource shall count as three kilowatt-hours.
 10.4      (d) By June 1, 2004, the commission shall issue an order 
 10.5   detailing the criteria and standards by which it will measure an 
 10.6   electric utility's efforts to meet the renewable energy 
 10.7   objectives of this section to determine whether the utility is 
 10.8   making the required good faith effort.  In this order, the 
 10.9   commission shall include criteria and standards that protect 
 10.10  against undesirable impacts on the reliability of the utility's 
 10.11  system and unreasonable economic impacts on the utility's 
 10.12  ratepayers and that considers technical feasibility. 
 10.13     Subd. 3. [UTILITY PLANS FILED WITH THE COMMISSION.] (a) 
 10.14  Each electric utility shall report on its plans, activities, and 
 10.15  progress with regard to these objectives in their filings under 
 10.16  section 216B.2422 or in a separate report submitted to the 
 10.17  commission every two years, whichever is earlier, demonstrating 
 10.18  to the commission that the utility is making the required good 
 10.19  faith effort.  In its resource plan or a separate report, each 
 10.20  electric utility shall provide a description of: 
 10.21     (1) the status of the utility's renewable energy mix 
 10.22  relative to the good faith objective; 
 10.23     (2) efforts taken to meet the objective; 
 10.24     (3) any obstacles encountered or anticipated in meeting the 
 10.25  objective; and 
 10.26     (4) potential solutions to the obstacles. 
 10.27     The commission may require any utility that the commission 
 10.28  finds is not making the required good faith effort to submit for 
 10.29  commission approval a plan to make the required effort to 
 10.30  achieve missed objectives. 
 10.31     (c) (b) The commission, in consultation with the 
 10.32  commissioner of commerce, shall compile the information provided 
 10.33  to the commission under paragraph (b) (a), and report to the 
 10.34  chairs of the house of representatives and senate committees 
 10.35  with jurisdiction over energy and environment policy issues as 
 10.36  to the progress of utilities in the state in increasing the 
 11.1   amount of renewable energy provided to retail customers, with 
 11.2   any recommendations for regulatory or legislative action, by 
 11.3   January 15, 2002 of each odd-numbered year. 
 11.4      Subd. 4.  [GREEN PRICING PROGRAMS.] An electric utility may 
 11.5   count energy provided to a retail customer under a renewable 
 11.6   rate option or "green-pricing" program under section 216B.169 
 11.7   towards the utility's renewable energy objectives under this 
 11.8   section, provided the energy meets the criteria under 
 11.9   subdivision 1, paragraph (a), and the energy is generated or 
 11.10  procured by the electric utility.  However, the existence of 
 11.11  such a program under section 216B.169 by an electric utility, or 
 11.12  by a distribution utility to which the electric utility provides 
 11.13  wholesale service, is not by itself evidence of a good faith 
 11.14  effort for the purposes of this section. 
 11.15     Subd. 5.  [RENEWABLE ENERGY CREDITS.] (a) To facilitate 
 11.16  compliance with this section, the commission, by rule or order, 
 11.17  shall establish a program for tradable credits for electricity 
 11.18  generated by an eligible energy technology.  In doing so, the 
 11.19  commission shall implement a system that constrains or limits 
 11.20  the cost of credits, taking care to ensure that such a system 
 11.21  does not undermine the market for those credits. 
 11.22     (b) In lieu of generating or procuring energy directly to 
 11.23  satisfy the renewable energy objective of this section, an 
 11.24  electric utility may purchase sufficient renewable energy 
 11.25  credits, issued pursuant to this subdivision, to meet its 
 11.26  objective. 
 11.27     (c) Upon the passage of a renewable energy standard, 
 11.28  portfolio, or objective in a bordering state that includes a 
 11.29  similar definition of eligible energy technology or renewable 
 11.30  energy, the commission may facilitate the trading of renewable 
 11.31  energy credits between states. 
 11.32     Subd. 6.  [CO-FIRING.] An eligible energy technology may 
 11.33  blend or co-fire a fuel listed in subdivision 1, paragraph (a), 
 11.34  clause (1), with other fuels in the generation facility, but 
 11.35  only the percentage of electricity that is attributable to a 
 11.36  fuel listed in that clause can be counted towards an electric 
 12.1   utility's renewable energy objectives.  This percentage shall be 
 12.2   calculated as the thermal content of the fuel source listed in 
 12.3   that clause as a percentage of the overall thermal content of 
 12.4   the blended fuel used to generate electricity. 
 12.5      Subd. 7.  [ELECTRIC UTILITY THAT OWNS A NUCLEAR GENERATION 
 12.6   FACILITY.] (a) An electric utility that owns a nuclear 
 12.7   generation facility shall make a good faith effort, as part of 
 12.8   its good faith effort under subdivision 2, to deploy an 
 12.9   additional 300 megawatts of nameplate capacity of wind energy 
 12.10  conversion systems by 2012, beyond the amount of wind energy 
 12.11  capacity to which the utility is committed as of May 1, 2003.  
 12.12  At least 100 megawatts of this capacity is to wind energy 
 12.13  conversion systems of two megawatts or less, which shall not be 
 12.14  eligible for the production incentive under section 216C.41.  To 
 12.15  the greatest extent technically feasible and economic, these 
 12.16  small wind energy facilities are to be distributed 
 12.17  geographically throughout the state in class 3, 4, and 5 wind 
 12.18  resource areas.  The utility may opt to construct and operate up 
 12.19  to 100 megawatts of the balance of the wind energy capacity 
 12.20  under this subdivision.  The deployment of the wind energy 
 12.21  capacity under this subdivision must be consistent with the 
 12.22  outcome of the engineering study required under paragraph (b). 
 12.23     (b) Recognizing that the intermittency of wind energy may 
 12.24  have reliability impacts on a utility's electric system when 
 12.25  deployed at high percentages of a utility's total electric 
 12.26  retail sales, the commission shall order the electric utility 
 12.27  subject to this subdivision to contract with a firm selected by 
 12.28  the commissioner of commerce for an independent engineering 
 12.29  study of the impacts of increasing wind capacity on its system 
 12.30  above the 825 megawatts of nameplate wind energy capacity to 
 12.31  which the utility is already committed, to evaluate options 
 12.32  available to manage the intermittent nature of this renewable 
 12.33  resource, including, but not limited to, increased levels of 
 12.34  ancillary services, storage, additional nonrenewable generation 
 12.35  support, and transmission system upgrades.  The study shall 
 12.36  identify the costs and benefits of various alternatives and 
 13.1   identify the most cost-effective means of adding additional wind 
 13.2   energy and other renewable resources.  The study shall be 
 13.3   completed by June 1, 2004, and incorporated into the utility's 
 13.4   next resource plan filing.  The costs of the study, options 
 13.5   pursued by the utility to manage the intermittent nature of wind 
 13.6   energy, and the costs of complying with paragraph (a) shall be 
 13.7   recoverable under section 216B.1645. 
 13.8      Sec. 10.  Minnesota Statutes 2002, section 216B.241, 
 13.9   subdivision 1b, is amended to read: 
 13.10     Subd. 1b.  [CONSERVATION IMPROVEMENT BY COOPERATIVE 
 13.11  ASSOCIATION OR MUNICIPALITY.] (a) This subdivision applies to: 
 13.12     (1) a cooperative electric association that provides retail 
 13.13  service to its members; 
 13.14     (2) a municipality that provides electric service to retail 
 13.15  customers; and 
 13.16     (3) a municipality with gross operating revenues in excess 
 13.17  of $5,000,000 from sales of natural gas to retail customers.  
 13.18     (b) Each cooperative electric association and municipality 
 13.19  subject to this subdivision shall spend and invest for energy 
 13.20  conservation improvements under this subdivision the following 
 13.21  amounts: 
 13.22     (1) for a municipality, 0.5 percent of its gross operating 
 13.23  revenues from the sale of gas and 1.5 percent of its gross 
 13.24  operating revenues from the sale of electricity, excluding gross 
 13.25  operating revenues from electric and gas service provided in the 
 13.26  state to large electric customer facilities; and 
 13.27     (2) for a cooperative electric association, 1.5 percent of 
 13.28  its gross operating revenues from service provided in the state, 
 13.29  excluding gross operating revenues from service provided in the 
 13.30  state to large electric customer facilities indirectly through a 
 13.31  distribution cooperative electric association. 
 13.32     (c) Each municipality and cooperative electric association 
 13.33  subject to this subdivision shall identify and implement energy 
 13.34  conservation improvement spending and investments that are 
 13.35  appropriate for the municipality or association, except that a 
 13.36  municipality or association may not spend or invest for energy 
 14.1   conservation improvements that directly benefit a large electric 
 14.2   customer facility for which the commissioner has issued an 
 14.3   exemption under subdivision 1a, paragraph (b). 
 14.4      (d) Each municipality and cooperative electric association 
 14.5   subject to this subdivision may spend and invest annually up to 
 14.6   ten percent of the total amount required to be spent and 
 14.7   invested on energy conservation improvements under this 
 14.8   subdivision on research and development projects that meet the 
 14.9   definition of energy conservation improvement in subdivision 1 
 14.10  and that are funded directly by the municipality or cooperative 
 14.11  electric association.  
 14.12     (e) Load-management activities that do not reduce energy 
 14.13  use but that increase the efficiency of the electric system may 
 14.14  be used to meet the following percentage of the conservation 
 14.15  investment and spending requirements of this subdivision: 
 14.16     (1) 2002 - 90 percent; 
 14.17     (2) 2003 - 80 percent; 
 14.18     (3) 2004 - 65 percent; and 
 14.19     (4) 2005 and thereafter - 50 percent. 
 14.20     (f) A generation and transmission cooperative electric 
 14.21  association that provides energy services to cooperative 
 14.22  electric associations that provide electric service at retail to 
 14.23  consumers may invest in energy conservation improvements on 
 14.24  behalf of the associations it serves and may fulfill the 
 14.25  conservation, spending, reporting, and energy savings goals on 
 14.26  an aggregate basis.  A municipal power agency or other 
 14.27  not-for-profit entity that provides energy service to municipal 
 14.28  utilities that provide electric service at retail may invest in 
 14.29  energy conservation improvements on behalf of the municipal 
 14.30  utilities it serves and may fulfill the conservation, spending, 
 14.31  reporting, and energy savings goals on an aggregate basis, under 
 14.32  an agreement between the municipal power agency or 
 14.33  not-for-profit entity and each municipal utility for funding the 
 14.34  investments. 
 14.35     (g) By June 1, 2002, and every two years thereafter, each 
 14.36  municipality or cooperative shall file an overview of its 
 15.1   conservation improvement plan with the commissioner.  With this 
 15.2   overview, the municipality or cooperative shall also provide an 
 15.3   evaluation to the commissioner detailing its energy conservation 
 15.4   improvement spending and investments for the previous period.  
 15.5   The evaluation must briefly describe each conservation program 
 15.6   and must specify the energy savings or increased efficiency in 
 15.7   the use of energy within the service territory of the utility or 
 15.8   association that is the result of the spending and investments.  
 15.9   The evaluation must analyze the cost effectiveness of the 
 15.10  utility's or association's conservation programs, using a list 
 15.11  of baseline energy and capacity savings assumptions developed in 
 15.12  consultation with the department. 
 15.13  The commissioner shall review each evaluation and make 
 15.14  recommendations, where appropriate, to the municipality or 
 15.15  association to increase the effectiveness of conservation 
 15.16  improvement activities.  Up to three percent of a utility's 
 15.17  conservation spending obligation under this section may be used 
 15.18  for program pre-evaluation, testing, and monitoring and program 
 15.19  evaluation.  The overview filed by a municipality or a 
 15.20  cooperative shall estimate the utility's cost per kilowatt 
 15.21  saved, cost per first year kilowatt-hour saved, and where 
 15.22  practicable, cost per lifetime kilowatt-hour saved.  The 
 15.23  municipal or cooperative electric utility's cost for a program 
 15.24  is the total of its costs for customer incentives, program 
 15.25  delivery utility administration, advertising and promotion, 
 15.26  evaluation, and any other cost components.  The overview filed 
 15.27  by a municipality with less than $2,500,000 in annual gross 
 15.28  revenues from the retail sale of electric service may consist of 
 15.29  a letter from the governing board of the municipal utility to 
 15.30  the department providing the amount of annual conservation 
 15.31  spending required of that municipality and certifying that the 
 15.32  required amount has been spent on conservation programs pursuant 
 15.33  to this subdivision.  
 15.34     (h) The commissioner shall also review each evaluation for 
 15.35  whether a portion of the money spent on residential conservation 
 15.36  improvement programs is devoted to programs that directly 
 16.1   address the needs of renters and low-income persons unless an 
 16.2   insufficient number of appropriate programs are available.  For 
 16.3   the purposes of this subdivision and subdivision 2, "low-income" 
 16.4   means an income at or below 50 percent of the state median 
 16.5   income.  
 16.6      (i) As part of its spending for conservation improvement, a 
 16.7   municipality or association may contribute to the energy and 
 16.8   conservation account.  A municipality or association may propose 
 16.9   to the commissioner to designate that all or a portion of funds 
 16.10  contributed to the account be used for research and development 
 16.11  projects that can best be implemented on a statewide basis.  Any 
 16.12  amount contributed must be remitted to the commissioner by 
 16.13  February 1 of each year. 
 16.14     (j) A municipality may spend up to 50 percent of its 
 16.15  required spending under this section to refurbish an existing 
 16.16  district heating or cooling system. 
 16.17     Sec. 11.  Minnesota Statutes 2002, section 216B.2411, is 
 16.18  amended to read: 
 16.19     216B.2411 [DISTRIBUTED ENERGY RESOURCES.] 
 16.20     (a) To the extent that cost-effective projects are 
 16.21  available in the service territory of a public utility or 
 16.22  association providing conservation natural gas services under 
 16.23  section 216B.241, the utility or association shall use five 
 16.24  percent of the total amount to be spent on energy conservation 
 16.25  improvements under section 216B.241, on: 
 16.26     (1) projects to construct an electric generating facility 
 16.27  that utilizes renewable fuels as defined in section 216B.2422, 
 16.28  subdivision 1, such as methane or other combustible gases 
 16.29  derived from the processing of plant or animal wastes, biomass 
 16.30  fuels such as short-rotation woody or fibrous agricultural 
 16.31  crops, or other renewable fuel, as its primary fuel source; or 
 16.32     (2) projects to install a distributed generation facility 
 16.33  of ten megawatts or less of interconnected capacity that is 
 16.34  fueled by natural gas, renewable fuels, or another similarly 
 16.35  clean fuel.  
 16.36     (b) For public utilities, as defined under section 216B.02, 
 17.1   subdivision 4, projects under this section must be considered 
 17.2   energy conservation improvements as defined in section 
 17.3   216B.241.  For cooperative electric associations and municipal 
 17.4   utilities, projects under this section must be considered 
 17.5   load-management activities described in section 216B.241, 
 17.6   subdivision 1, paragraph (i).  
 17.7      (d) This section expires May 30, 2006.  
 17.8      Sec. 12.  [216B.2412] [RENEWABLE ENERGY PROJECTS.] 
 17.9      Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
 17.10  section, the terms defined in this subdivision and section 
 17.11  216B.241, subdivision 1, have the meanings given them. 
 17.12     (b) "Electric utility" means any public utility, 
 17.13  cooperative electric association, or municipality subject to 
 17.14  section 216B.241 that is providing electric service at retail. 
 17.15     (c) "Eligible renewable energy sources" means fuels and 
 17.16  technologies to generate electricity through the use of any of 
 17.17  the following resources: 
 17.18     (1) wind; 
 17.19     (2) hydrogen, provided that after January 1, 2010, the 
 17.20  hydrogen must be generated from the resources listed in this 
 17.21  paragraph; 
 17.22     (3) solar; 
 17.23     (4) geothermal; 
 17.24     (5) hydroelectric with a capacity of less than 60 
 17.25  megawatts; 
 17.26     (6) biomass; 
 17.27     (7) landfill gas; and 
 17.28     (8) refuse derived fuel and solid waste. 
 17.29     (d) "Biomass" includes: 
 17.30     (1) methane or other combustible gases derived from the 
 17.31  processing of plant or animal material; 
 17.32     (2) alternative fuels derived from soybean and other 
 17.33  agricultural plant oils or animal fats; 
 17.34     (3) combustion of barley hulls, corn, soy-based products, 
 17.35  or other agricultural products; and 
 17.36     (4) wood residue from the wood products industry in 
 18.1   Minnesota, or other wood products, such as short-rotation woody 
 18.2   or fibrous agricultural crops. 
 18.3      (e) "Eligible renewable energy project" is a project to 
 18.4   either conduct research into the development of eligible 
 18.5   renewable energy sources and technologies or to deploy 
 18.6   technologies in Minnesota that utilize eligible renewable energy 
 18.7   sources.  
 18.8      Subd. 2.  [ELIGIBLE RENEWABLE ENERGY RESEARCH.] (a) An 
 18.9   electric utility shall spend five percent of the total amount 
 18.10  that utility is required to spend under section 216B.241 to 
 18.11  support basic and applied research at the University of 
 18.12  Minnesota for the development of the sustainable energy sources 
 18.13  and technologies listed in subdivision 1, paragraph (c), clauses 
 18.14  (2), (3), and (6).  These funds shall be transferred to the 
 18.15  University of Minnesota on or before July 1 of each year.  The 
 18.16  University of Minnesota shall ensure that at least 25 percent of 
 18.17  funds spent under this section are available for basic and 
 18.18  applied research at least one rural campus or experiment station.
 18.19     (b) Research funded under this subdivision must have a 
 18.20  direct benefit to Minnesota.  Research funded under paragraph 
 18.21  (a) may focus on hydrogen, solar, and biomass and: 
 18.22     (1) conversion of state wind resources to hydrogen for 
 18.23  energy storage and transportation to areas of energy demand; 
 18.24     (2) improvement of scalable hydrogen fuel cells for 
 18.25  stationary combined electricity generation and heating/cooling 
 18.26  function for residential and commercial use; and 
 18.27     (3) processing of agricultural and forestry products for 
 18.28  production of hydrogen and other fuels and sequestration of 
 18.29  carbon using a variety of means, including biocatalysis and 
 18.30  fermentation. 
 18.31     Subd. 3.  [DEPLOYMENT OF ELIGIBLE RENEWABLE ENERGY 
 18.32  SOURCES.] (a) An electric utility shall spend ten percent of the 
 18.33  total amount that utility is required to spend under section 
 18.34  216B.241 for the deployment of electric generation technologies 
 18.35  in Minnesota that use eligible renewable energy sources.  Funds 
 18.36  under this section may also be used for incentives to convert 
 19.1   existing Minnesota generation facilities to use eligible 
 19.2   renewable energy sources, either exclusively or in conjunction 
 19.3   with other fuels.  Expenditures under this subdivision must be 
 19.4   consistent with the determination of the commissioner pursuant 
 19.5   to subdivision 6.  
 19.6      (b) Electricity generated using an eligible renewable 
 19.7   energy source may be counted toward the renewable energy 
 19.8   objectives in section 216B.1691.  For a generation facility that 
 19.9   utilizes an eligible renewable energy source based on the 
 19.10  combustion of fuel, electricity produced by the facility may 
 19.11  only count toward an electric utility's renewable energy 
 19.12  objectives if the facility: 
 19.13     (1) was constructed in compliance with new source 
 19.14  performance standards promulgated under the federal Clean Air 
 19.15  Act for a generation facility of that type; or 
 19.16     (2) employs the maximum achievable or best available 
 19.17  control technology available for a generation facility of that 
 19.18  type identified by the federal Environmental Protection Agency 
 19.19  pursuant to the federal Clean Air Act. 
 19.20     (c) An eligible renewable energy source listed in 
 19.21  subdivision 1 may be blended or co-fired with other fuels in the 
 19.22  generation facility, but only the percentage of electricity that 
 19.23  is attributable to the eligible renewable energy source can be 
 19.24  counted towards an electric utility's renewable energy 
 19.25  objectives.  This percentage shall be calculated as the thermal 
 19.26  content of the eligible renewable energy source as a percentage 
 19.27  of the overall thermal content of the blended fuel used to 
 19.28  generate electricity. 
 19.29     Subd. 4.  [POOLING OF RESOURCES OF MULTIPLE UTILITIES.] Two 
 19.30  or more electric utilities may pool resources under this section 
 19.31  to provide assistance jointly to proposed eligible renewable 
 19.32  energy projects.  The utilities shall negotiate and agree among 
 19.33  themselves for allocation of benefits associated with a project, 
 19.34  such as the ability to count energy generated by a project 
 19.35  toward a utility's renewable energy objectives under section 
 19.36  216B.1691.  The utilities shall provide a summary of the 
 20.1   allocation of benefits to the commissioner. 
 20.2      Subd. 5.  [CREDIT FOR PROJECTS OUTSIDE OF SERVICE 
 20.3   TERRITORY.] An electric utility may spend funds under this 
 20.4   section for sustainable energy projects in Minnesota that are 
 20.5   outside the service territory of the utility.  Upon application 
 20.6   by an electric utility, the commission shall authorize a credit 
 20.7   of three percent of the amount the electric utility contributed 
 20.8   toward an eligible renewable energy project that is outside the 
 20.9   electric utility's service territory.  This credit shall be 
 20.10  deducted from the utility's overall required spending under 
 20.11  section 216B.241.  The commissioner may extend that credit to up 
 20.12  to ten percent of the amount the utility contributes to a 
 20.13  project outside of its service territory, if the commissioner 
 20.14  determines that a proposed project is important to the 
 20.15  advancement of state policy goals under subdivision 6 and would 
 20.16  not occur without the additional credit.  This section does not 
 20.17  apply to contributions toward research under subdivision 2, 
 20.18  paragraph (a). 
 20.19     Subd. 6.  [ELIGIBLE RESEARCH AND TECHNOLOGIES; 
 20.20  DETERMINATION BY COMMISSIONER.] At least annually, and upon 
 20.21  consultation by an electric utility, the commissioner of 
 20.22  commerce shall, by order, identify research, technologies, and 
 20.23  projects that are eligible for expenditures under this section.  
 20.24  In identifying eligible technologies and projects, the 
 20.25  commissioner shall consider the extent to which the technology 
 20.26  or project advances state policy goals, such as:  ensuring 
 20.27  affordable, reliable energy for Minnesota consumers; use of 
 20.28  Minnesota energy resources; and promoting local economic 
 20.29  development and protecting Minnesota's environment.  By January 
 20.30  15 of each year, the commissioner shall issue a report to the 
 20.31  legislature detailing and evaluating expenditures under this 
 20.32  section, as well as the process and criteria used by the 
 20.33  commissioner to make decisions under this subdivision. 
 20.34     Sec. 13.  Minnesota Statutes 2002, section 216B.2424, 
 20.35  subdivision 5, is amended to read: 
 20.36     Subd. 5.  [MANDATE.] (a) A public utility, as defined in 
 21.1   section 216B.02, subdivision 4, that operates a nuclear-powered 
 21.2   electric generating plant within this state must construct and 
 21.3   operate, purchase, or contract to construct and operate (1) by 
 21.4   December 31, 1998, 50 megawatts of electric energy installed 
 21.5   capacity generated by farm-grown closed-loop biomass scheduled 
 21.6   to be operational by December 31, 2001; and (2) by December 31, 
 21.7   1998, an additional 75 megawatts of installed capacity so 
 21.8   generated scheduled to be operational by December 31, 2002.  
 21.9      (b) Of the 125 megawatts of biomass electricity installed 
 21.10  capacity required under this subdivision, no more than 50 55 
 21.11  megawatts of this capacity may be provided by a facility that 
 21.12  uses poultry litter as its primary fuel source and any such 
 21.13  facility:  
 21.14     (1) need not use biomass that complies with the definition 
 21.15  in subdivision 1; 
 21.16     (2) must enter into a contract with the public utility for 
 21.17  such capacity, that has an average purchase price per megawatt 
 21.18  hour over the life of the contract that is equal to or less than 
 21.19  the average purchase price per megawatt hour over the life of 
 21.20  the contract in contracts approved by the public utilities 
 21.21  commission before April 1, 2000, to satisfy the mandate of this 
 21.22  section, and file that contract with the public utilities 
 21.23  commission prior to September 1, 2000; and 
 21.24     (3) must schedule such capacity to be operational by 
 21.25  December 31, 2002.  
 21.26     (c) Of the total 125 megawatts of biomass electric energy 
 21.27  installed capacity required under this section, no more than 75 
 21.28  megawatts may be provided by a single project.  
 21.29     (d) Of the 75 megawatts of biomass electric energy 
 21.30  installed capacity required under paragraph (a), clause (2), no 
 21.31  more than 25 33 megawatts of this capacity may be provided by a 
 21.32  St. Paul district heating and cooling system cogeneration 
 21.33  facility utilizing waste wood as a primary fuel source.  The St. 
 21.34  Paul district heating and cooling system cogeneration facility 
 21.35  need not use biomass that complies with the definition in 
 21.36  subdivision 1.  
 22.1      (e) The public utility must accept and consider on an equal 
 22.2   basis with other biomass proposals: 
 22.3      (1) a proposal to satisfy the requirements of this section 
 22.4   that includes a project that exceeds the megawatt capacity 
 22.5   requirements of either paragraph (a), clause (1) or (2), and 
 22.6   that proposes to sell the excess capacity to the public utility 
 22.7   or to other purchasers; and 
 22.8      (2) a proposal for a new facility to satisfy more than ten 
 22.9   but not more than 20 megawatts of the electrical generation 
 22.10  requirements by a small business-sponsored independent power 
 22.11  producer facility to be located within the northern quarter of 
 22.12  the state, which means the area located north of Constitutional 
 22.13  Route No. 8 as described in section 161.114, subdivision 2, and 
 22.14  that utilizes biomass residue wood, sawdust, bark, chipped wood, 
 22.15  or brush to generate electricity.  A facility described in this 
 22.16  clause is not required to utilize biomass complying with the 
 22.17  definition in subdivision 1, but must have the capacity required 
 22.18  by this clause operational by December 31, 2002. 
 22.19     (f) If a public utility files a contract with the 
 22.20  commission for electric energy installed capacity that uses 
 22.21  poultry litter as its primary fuel source, the commission must 
 22.22  do a preliminary review of the contract to determine if it meets 
 22.23  the purchase price criteria provided in paragraph (b), clause 
 22.24  (2), of this subdivision.  The commission shall perform its 
 22.25  review and advise the parties of its determination within 30 
 22.26  days of filing of such a contract by a public utility.  A public 
 22.27  utility may submit by September 1, 2000, a revised contract to 
 22.28  address the commission's preliminary determination.  
 22.29     (g) The commission shall finally approve, modify, or 
 22.30  disapprove no later than July 1, 2001, all contracts submitted 
 22.31  by a public utility as of September 1, 2000, to meet the mandate 
 22.32  set forth in this subdivision.  
 22.33     (h) If a public utility subject to this section exercises 
 22.34  an option to increase the generating capacity of a project in a 
 22.35  contract approved by the commission prior to April 25, 2000, to 
 22.36  satisfy the mandate in this subdivision, the public utility must 
 23.1   notify the commission by September 1, 2000, that it has 
 23.2   exercised the option and include in the notice the amount of 
 23.3   additional megawatts to be generated under the option 
 23.4   exercised.  Any review by the commission of the project after 
 23.5   exercise of such an option shall be based on the same criteria 
 23.6   used to review the existing contract. 
 23.7      (i) A facility specified in this subdivision qualifies for 
 23.8   exemption from property taxation under section 272.02, 
 23.9   subdivision 43. 
 23.10     Sec. 14.  Minnesota Statutes 2002, section 216B.2424, is 
 23.11  amended by adding a subdivision to read: 
 23.12     Subd. 9.  [STATUS REVIEW.] As of June 2003, the public 
 23.13  utilities commission must initiate a review of all projects 
 23.14  selected to satisfy a portion of the biomass mandate pursuant to 
 23.15  this section, to make a preliminary determination of each 
 23.16  project's status and viability.  By January 1, 2004, the 
 23.17  commission shall: 
 23.18     (1) cancel the contract, or deny any pending or future 
 23.19  requests for contract extensions, for any project that: 
 23.20     (i) is not yet producing electricity; 
 23.21     (ii) has not yet begun a continuous program of physical 
 23.22  on-site construction; or 
 23.23     (iii) has not demonstrated to the commission that the 
 23.24  project has firm financial commitments for construction and 
 23.25  operation of the project and that the commission determines is 
 23.26  not viable; and 
 23.27     (2) direct the public utility subject to the biomass 
 23.28  mandate to request competitive proposals under subdivision 6 for 
 23.29  the biomass capacity in the amount of the canceled contracts or 
 23.30  failed projects. 
 23.31     Sec. 15.  [216B.361] [TOWNSHIP AGREEMENT WITH NATURAL GAS 
 23.32  UTILITY.] 
 23.33     A township may enter into an agreement with a public 
 23.34  utility providing natural gas services to provide services 
 23.35  within a designated portion or all of the township.  If a city 
 23.36  annexes township land for which a utility has an agreement with 
 24.1   a township to serve, the utility shall continue to have a 
 24.2   nonexclusive right to offer and provide service in the area 
 24.3   identified by the agreement with the township for the term of 
 24.4   that agreement, subject to the authority of the annexing city to 
 24.5   manage public rights-of-way within the city as provided in 
 24.6   sections 216B.36, 237.162, and 237.163. 
 24.7      Nothing in this section precludes a city from acquiring the 
 24.8   property of a public utility under sections 216B.45 to 216B.47 
 24.9   for the purpose of allowing the city to own and operate a 
 24.10  natural gas utility, or to extend natural gas and other utility 
 24.11  services into newly annexed areas. 
 24.12     Sec. 16.  Minnesota Statutes 2002, section 216C.051, 
 24.13  subdivision 3, is amended to read: 
 24.14     Subd. 3.  [FUTURE ENERGY SOLUTIONS; TECHNICAL AND ECONOMIC 
 24.15  ANALYSIS.] (a) In light of the electric energy guidelines 
 24.16  established in subdivision 7 and in light of existing 
 24.17  conservation improvement programs and plans, utility resource 
 24.18  plans, and other existing energy plans and analyses, the 
 24.19  legislative task force on energy shall undertake an analysis of 
 24.20  the technical and economic feasibility of an electric energy 
 24.21  future for the state that relies on environmentally and 
 24.22  economically sustainable and advantageous electric energy supply 
 24.23  utility resource plans and competitive bidding dockets before 
 24.24  the commission, the task force shall gather information and make 
 24.25  recommendations to the legislature regarding potential electric 
 24.26  energy resources.  The task force shall may contract with one or 
 24.27  more energy policy experts and energy economists to assist it in 
 24.28  its analysis.  The task force may not contract for service nor 
 24.29  employ any person who was involved in any capacity in any 
 24.30  portion of any proceeding before the public utilities 
 24.31  commission, the administrative law judge, the state court of 
 24.32  appeals, or the United States Nuclear Regulatory Commission 
 24.33  related to the dry cask storage proposal on Prairie Island.  The 
 24.34  task force must gather information on at least the following 
 24.35  electric energy resources, but may expand its inquiry as 
 24.36  warranted by the information collected: 
 25.1      (1) wind energy; 
 25.2      (2) hydrogen as a fuel carrier produced from renewable and 
 25.3   fossil fuel resources; 
 25.4      (3) biomass; 
 25.5      (4) decomposition gases produced by solid waste management 
 25.6   facilities; 
 25.7      (5) solid waste as a direct fuel or refuse-derived fuel; 
 25.8   and 
 25.9      (6) clean coal technology.  
 25.10     (b) The analysis must address In evaluating these electric 
 25.11  energy resources, the task force must consider at least the 
 25.12  following: 
 25.13     (1) to the best of forecasting abilities, how much electric 
 25.14  generation capacity and demand for electric energy is necessary 
 25.15  to maintain a strong economy and a high quality of life in the 
 25.16  state over the next 15 to 20 years; how is this demand level 
 25.17  affected by achievement of the maximum reasonably feasible and 
 25.18  cost-effective demand side management and generation and 
 25.19  distribution efficiencies; 
 25.20     (2) what alternative forms of energy can provide a stable 
 25.21  supply of energy and are producible and sustainable in the state 
 25.22  and at what cost; 
 25.23     (3) what are the costs to the state and ratepayers to 
 25.24  ensure that new electric energy generation utilizes less 
 25.25  environmentally damaging sources; how do those costs change as 
 25.26  the time frame for development and implementation of new 
 25.27  generation sources is compressed; 
 25.28     (4) what are the implications for delivery systems for 
 25.29  energy produced in areas of the state that do not now have 
 25.30  high-volume transmission capability; are new transmission 
 25.31  technologies being developed that can address some of the 
 25.32  concerns with transmission; can a more dispersed electric 
 25.33  generation system lessen the need for long-distance 
 25.34  transmission; 
 25.35     (5) what are the actual costs and benefits of purchasing 
 25.36  electricity and fuel to generate electricity from outside the 
 26.1   state; what are the present costs to the state's economy of 
 26.2   exporting a large percentage of the state's energy dollars and 
 26.3   what is the future economic impact of continuing to do so; 
 26.4      (6) are there benefits to be had from a large immediate 
 26.5   investment in quickly implementing alternative electric energy 
 26.6   sources in terms of developing an exportable technology and/or 
 26.7   commodity; is it feasible to turn around the flow of dollars for 
 26.8   energy so that the state imports dollars and exports energy and 
 26.9   energy technology; what is a reasonable time frame for the shift 
 26.10  if it is possible; 
 26.11     (7) are there taxation or regulatory barriers to developing 
 26.12  more sustainable and less problematic electric energy 
 26.13  generation; what are they specifically and how can they be 
 26.14  specifically addressed; 
 26.15     (8) can an approach be developed that moves quickly to 
 26.16  development and implementation of alternative energy sources 
 26.17  that can be forgiving of interim failures but that is also 
 26.18  sufficiently deliberate to ensure ultimate success on a large 
 26.19  scale; and 
 26.20     (9) in what specific ways can the state assist regional 
 26.21  energy suppliers to accelerate phasing out energy production 
 26.22  processes that produce wastes or emissions that must necessarily 
 26.23  be carefully controlled and monitored to minimize adverse 
 26.24  effects on the environment and human health and to assist in 
 26.25  developing and implementing base load energy production that 
 26.26  both prevents or minimizes by its nature adverse environmental 
 26.27  and human health effects and utilizes resources that are 
 26.28  available or producible in the state; 
 26.29     (10) whether there is a need to establish additional 
 26.30  dislocated worker assistance for workers at the Prairie Island 
 26.31  nuclear power plant; if so, how that assistance should be 
 26.32  structured; 
 26.33     (11) can the state monitor, evaluate, and affect federal 
 26.34  actions relating to permanent storage of high-level radioactive 
 26.35  waste; what actions by the state over what period of time would 
 26.36  expedite federal action to take responsibility for the waste; 
 27.1      (12) should the state establish a legislative oversight 
 27.2   commission on energy issues; should the responsibilities of an 
 27.3   oversight commission be coordinated with the activities of the 
 27.4   public utilities commission and the department of public service 
 27.5   and if so, how; and 
 27.6      (13) is it feasible to convert existing nuclear power and 
 27.7   coal-fired electric generating plants to utilization of energy 
 27.8   sources that result in significantly less environmental damage; 
 27.9   if so, what are the short-term and long-term costs and benefits 
 27.10  of doing so; how do shorter or longer time periods for 
 27.11  conversion affect the cost/benefit analysis. 
 27.12     (c) The task force must study issues related to the 
 27.13  transportation of spent nuclear fuel from this state to interim 
 27.14  or permanent repositories outside this state.  
 27.15     (d) The public utility that owns the Prairie Island and 
 27.16  Monticello nuclear generation facilities shall update the 
 27.17  reports required under section 116C.772, subdivisions 3 to 5, 
 27.18  and shall submit those updates periodically to the public 
 27.19  utilities commission with the utility's resource plan filing 
 27.20  under section 216B.2422 and to the task force. 
 27.21     Sec. 17.  Minnesota Statutes 2002, section 216C.051, is 
 27.22  amended by adding a subdivision to read: 
 27.23     Subd. 4a.  [REPORT AND RECOMMENDATIONS.] By January 15, 
 27.24  2005, and every two years thereafter, the task force shall 
 27.25  submit a report to the chairs of the committees in the house of 
 27.26  representatives and in the senate that have responsibility for 
 27.27  energy and for environmental and natural resources issues that 
 27.28  contains an overview of information gathered and analyses that 
 27.29  have been prepared, and specific recommendations, if any, for 
 27.30  legislative action that will ensure development and 
 27.31  implementation of electric energy policy that will provide the 
 27.32  state with adequate, renewable, and economic electric power for 
 27.33  the long term.  
 27.34     Sec. 18.  Minnesota Statutes 2002, section 216C.051, 
 27.35  subdivision 9, is amended to read: 
 27.36     Subd. 9.  [EXPIRATION.] This section is repealed June 
 28.1   30, 2005 2007. 
 28.2      Sec. 19.  Minnesota Statutes 2002, section 216C.41, 
 28.3   subdivision 1, is amended to read: 
 28.4      Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
 28.5   subdivision apply to this section. 
 28.6      (b) "Qualified hydroelectric facility" means a 
 28.7   hydroelectric generating facility in this state that: 
 28.8      (1) is located at the site of a dam, if the dam was in 
 28.9   existence as of March 31, 1994; and 
 28.10     (2) begins generating electricity after July 1, 1994, or 
 28.11  generates electricity after substantial refurbishing of a 
 28.12  facility that begins after July 1, 2001. 
 28.13     (c) "Qualified wind energy conversion facility" means a 
 28.14  wind energy conversion system in this state that: 
 28.15     (1) produces two megawatts or less of electricity as 
 28.16  measured by nameplate rating and begins generating electricity 
 28.17  after December 31, 1996, and before July 1, 1999; 
 28.18     (2) begins generating electricity after June 30, 1999, 
 28.19  produces two megawatts or less of electricity as measured by 
 28.20  nameplate rating, and is: 
 28.21     (i) located within one county and owned by a natural person 
 28.22  who owns the land where the facility is sited; 
 28.23     (ii) owned by a Minnesota small business as defined in 
 28.24  section 645.445; 
 28.25     (iii) owned by a Minnesota nonprofit organization; or 
 28.26     (iv) owned by a tribal council if the facility is located 
 28.27  within the boundaries of the reservation; or 
 28.28     (v) owned by a Minnesota municipal utility or a Minnesota 
 28.29  cooperative electric association; or 
 28.30     (vi) owned by a Minnesota political subdivision or local 
 28.31  government, including, but not limited to, a county, statutory 
 28.32  or home rule charter city, town, school district, or any other 
 28.33  local or regional governmental organization such as a board, 
 28.34  commission, or association; or 
 28.35     (3) begins generating electricity after June 30, 1999, 
 28.36  produces seven megawatts or less of electricity as measured by 
 29.1   nameplate rating, and: 
 29.2      (i) is owned by a cooperative organized under chapter 
 29.3   308A other than a Minnesota cooperative electric association; 
 29.4   and 
 29.5      (ii) all shares and membership in the cooperative are held 
 29.6   by natural persons or estates, at least 51 percent of whom 
 29.7   reside in a county or contiguous to a county where the wind 
 29.8   energy production facilities of the cooperative are 
 29.9   located Minnesota residents or estates of persons who were 
 29.10  Minnesota residents. 
 29.11     (d) "Qualified on-farm biogas recovery facility" means an 
 29.12  anaerobic digester system that: 
 29.13     (1) is located at the site of an agricultural operation; 
 29.14     (2) is owned by a natural person who owns or rents the land 
 29.15  where the facility is located; and 
 29.16     (3) begins generating electricity after July 1, 2001.  
 29.17     (e) "Anaerobic digester system" means a system of 
 29.18  components that processes animal waste based on the absence of 
 29.19  oxygen and produces gas used to generate electricity. 
 29.20     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 29.21  following final enactment.  
 29.22     Sec. 20.  Minnesota Statutes 2002, section 216C.41, 
 29.23  subdivision 2, is amended to read: 
 29.24     Subd. 2.  [INCENTIVE PAYMENT; APPROPRIATION.] (a) Incentive 
 29.25  payments must be made according to this section to (1) a 
 29.26  qualified on-farm biogas recovery facility, (2) the owner or 
 29.27  operator of a qualified hydropower facility or qualified wind 
 29.28  energy conversion facility for electric energy generated and 
 29.29  sold by the facility, (3) a publicly owned hydropower facility 
 29.30  for electric energy that is generated by the facility and used 
 29.31  by the owner of the facility outside the facility, or (4) the 
 29.32  owner of a publicly owned dam that is in need of substantial 
 29.33  repair, for electric energy that is generated by a hydropower 
 29.34  facility at the dam and the annual incentive payments will be 
 29.35  used to fund the structural repairs and replacement of 
 29.36  structural components of the dam, or to retire debt incurred to 
 30.1   fund those repairs. 
 30.2      (b) Payment may only be made upon receipt by the 
 30.3   commissioner of finance of an incentive payment application that 
 30.4   establishes that the applicant is eligible to receive an 
 30.5   incentive payment and that satisfies other requirements the 
 30.6   commissioner deems necessary.  The application must be in a form 
 30.7   and submitted at a time the commissioner establishes.  
 30.8      (c) There is annually appropriated from the general fund to 
 30.9   the commissioner of commerce sums sufficient to make the 
 30.10  payments required under this section, other than the amounts 
 30.11  funded by the renewable development account as specified in 
 30.12  subdivision 5a. 
 30.13     Sec. 21.  Minnesota Statutes 2002, section 216C.41, 
 30.14  subdivision 3, is amended to read: 
 30.15     Subd. 3.  [ELIGIBILITY WINDOW.] Payments may be made under 
 30.16  this section only for electricity generated: 
 30.17     (1) from a qualified hydroelectric facility that is 
 30.18  operational and generating electricity before December 31, 2005; 
 30.19     (2) from a qualified wind energy conversion facility that 
 30.20  is operational and generating electricity before January 1, 2005 
 30.21  2007; or 
 30.22     (3) from a qualified on-farm biogas recovery facility from 
 30.23  July 1, 2001, through December 31, 2015. 
 30.24     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 30.25  following final enactment.  
 30.26     Sec. 22.  Minnesota Statutes 2002, section 216C.41, 
 30.27  subdivision 4, is amended to read: 
 30.28     Subd. 4.  [PAYMENT PERIOD.] (a) A facility may receive 
 30.29  payments under this section for a ten-year period.  No payment 
 30.30  under this section may be made for electricity generated: 
 30.31     (1) by a qualified hydroelectric facility after December 
 30.32  31, 2015; 
 30.33     (2) by a qualified wind energy conversion facility after 
 30.34  December 31, 2015 2017; or 
 30.35     (3) by a qualified on-farm biogas recovery facility after 
 30.36  December 31, 2015.  
 31.1      (b) The payment period begins and runs consecutively from 
 31.2   the first year in which electricity generated from the facility 
 31.3   is eligible for incentive payment the date the facility begins 
 31.4   generating electricity or, in the case of refurbishment of a 
 31.5   hydropower facility, after substantial repairs to the hydropower 
 31.6   facility dam funded by the incentive payments are initiated. 
 31.7      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 31.8   following final enactment.  
 31.9      Sec. 23.  Minnesota Statutes 2002, section 216C.41, 
 31.10  subdivision 5, is amended to read: 
 31.11     Subd. 5.  [AMOUNT OF PAYMENT; WIND FACILITIES LIMIT.] (a) 
 31.12  An incentive payment is based on the number of kilowatt hours of 
 31.13  electricity generated. The amount of the payment is: 
 31.14     (1) for a facility described under subdivision 2, paragraph 
 31.15  (a), clause (4), 1.0 cent per kilowatt hour; and 
 31.16     (2) for all other facilities, 1.5 cents per kilowatt hour.  
 31.17  For electricity generated by qualified wind energy conversion 
 31.18  facilities, the incentive payment under this section is limited 
 31.19  to no more than 100 megawatts of nameplate capacity.  During any 
 31.20  period in which qualifying claims for incentive payments exceed 
 31.21  100 megawatts of nameplate capacity, the payments must be made 
 31.22  to producers in the order in which the production capacity was 
 31.23  brought into production.  
 31.24     (b) For wind energy conversion systems installed and 
 31.25  contracted for after January 1, 2002, the total size of a wind 
 31.26  energy conversion system under this section must be determined 
 31.27  according to this paragraph.  Unless the systems are 
 31.28  interconnected with different distribution systems, the 
 31.29  nameplate capacity of one wind energy conversion system must be 
 31.30  combined with the nameplate capacity of any other wind energy 
 31.31  conversion system that is: 
 31.32     (1) located within five miles of the wind energy conversion 
 31.33  system; 
 31.34     (2) constructed within the same calendar year as the wind 
 31.35  energy conversion system; and 
 31.36     (3) under common ownership. 
 32.1   In the case of a dispute, the commissioner of commerce shall 
 32.2   determine the total size of the system, and shall draw all 
 32.3   reasonable inferences in favor of combining the systems. 
 32.4      (c) In making a determination under paragraph (b), the 
 32.5   commissioner of commerce may determine that two wind energy 
 32.6   conversion systems are under common ownership when the 
 32.7   underlying ownership structure contains similar persons or 
 32.8   entities, even if the ownership shares differ between the two 
 32.9   systems.  Wind energy conversion systems are not under common 
 32.10  ownership solely because the same person or entity provided 
 32.11  equity financing for the systems. 
 32.12     (d) A qualified wind energy conversion system is eligible 
 32.13  for the incentive on the date the commissioner receives: 
 32.14     (1) an application for payment of the incentive; 
 32.15     (2) one of the following: 
 32.16     (i) a copy of a signed power purchase agreement; 
 32.17     (ii) a copy of a binding agreement other than a power 
 32.18  purchase agreement to sell electricity generated by the facility 
 32.19  to a third person; or 
 32.20     (iii) if the facility developer or owner will sell 
 32.21  electricity to its own members or customers, a copy of the 
 32.22  purchase order for equipment to construct the facility with a 
 32.23  delivery date and a copy of a signed receipt for a nonrefundable 
 32.24  deposit; and 
 32.25     (3) any other information the commissioner deems necessary 
 32.26  to determine whether the proposed facility qualifies for the 
 32.27  incentive under this section.  
 32.28     (e) The commissioner or the commissioner's designee shall 
 32.29  determine whether a facility qualifies for the incentive and 
 32.30  respond in writing to the applicant approving or denying the 
 32.31  application within 15 working days of receipt of the information 
 32.32  required in paragraph (d).  A facility that is not operational 
 32.33  within 18 months of receipt of a letter of approval is no longer 
 32.34  approved for the incentive.  The commissioner shall notify an 
 32.35  applicant of potential loss of approval not less than 60 days 
 32.36  prior to the end of the 18-month period.  Eligibility for a 
 33.1   facility that loses approval may be reestablished as of the date 
 33.2   the commissioner receives a new completed application.  Approval 
 33.3   applies only to the person or persons who applied for the 
 33.4   incentive and may not be transferred to any other person or 
 33.5   persons. 
 33.6      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 33.7   following final enactment.  
 33.8      Sec. 24.  Minnesota Statutes 2002, section 216C.41, is 
 33.9   amended by adding a subdivision to read: 
 33.10     Subd. 5a.  [ADDITIONAL SMALL WIND ENERGY PRODUCTION 
 33.11  INCENTIVE.] The department of commerce shall authorize payment 
 33.12  of the renewable energy production incentive to wind energy 
 33.13  conversion systems larger than 40 kilowatts in size for 150 
 33.14  megawatts of nameplate capacity in addition to the capacity 
 33.15  authorized under subdivision 5.  Payment of the incentive shall 
 33.16  be made from the renewable energy development account as 
 33.17  provided under section 116C.779, subdivision 3. 
 33.18     Sec. 25.  [REDUCTION OF BIOMASS MANDATE.] 
 33.19     Notwithstanding Minnesota Statutes, section 216B.2424, the 
 33.20  biomass electric energy mandate shall be reduced from 125 
 33.21  megawatts to 110 megawatts.  The public utilities commission 
 33.22  shall not approve any request pending before the public 
 33.23  utilities commission as of May 15, 2003, for a deadline 
 33.24  extension for obtaining financing for any contract previously 
 33.25  approved to satisfy a portion of the biomass mandate unless the 
 33.26  developer of the project agrees to reduce the size of its 
 33.27  project from 50 megawatts to 35 megawatts. 
 33.28     Sec. 26.  [REFURBISHMENT OF METROPOLITAN GENERATING 
 33.29  PLANTS.] 
 33.30     Notwithstanding Minnesota Statutes, section 216B.1692, 
 33.31  subdivision 1, clause (2), and subdivision 5, paragraphs (c) and 
 33.32  (d), all investments in repowering, emissions reduction 
 33.33  technologies and equipment, and power plant rehabilitation and 
 33.34  life extension described in the primary metropolitan emission 
 33.35  reduction proposal filed with the public utilities commission in 
 33.36  July 2002 by the public utility that owns the Prairie Island 
 34.1   nuclear generation facility and currently pending before the 
 34.2   commission are deemed qualifying projects under Minnesota 
 34.3   Statutes, section 216B.1692, and all costs related to all such 
 34.4   investments are eligible for rider recovery under Minnesota 
 34.5   Statutes, section 216B.1692, subdivision 5.  Upon receiving 
 34.6   approval by the commission, the utility shall implement the 
 34.7   approved proposal or justify to the commission its decision not 
 34.8   to do so. 
 34.9      Sec. 27.  [INNOVATIVE ENERGY PROJECT.] 
 34.10     Subdivision 1.  [DEFINITION.] For the purposes of this 
 34.11  section, the term "innovative energy project" means a proposed 
 34.12  energy generation facility: 
 34.13     (1) that makes use of an innovative generation technology 
 34.14  utilizing coal as a primary fuel in a highly efficient 
 34.15  combined-cycle configuration with significantly reduced sulfur 
 34.16  dioxide, nitrogen oxide, particulate, and mercury emissions from 
 34.17  those of traditional technologies; 
 34.18     (2) that the project developer or owner certifies is a 
 34.19  project capable of offering a long-term supply contract at a 
 34.20  hedged, predictable cost; and 
 34.21     (3) that is designated by the commissioner of the iron 
 34.22  range resources and rehabilitation board as a project that is 
 34.23  located in the tax relief area on a site that has substantial 
 34.24  real property with adequate infrastructure to support new or 
 34.25  expanded development.  
 34.26     Subd. 2.  [REGULATORY INCENTIVES.] (a) An innovative energy 
 34.27  project: 
 34.28     (1) is granted a certificate of need under Minnesota 
 34.29  Statutes, section 216B.243, for the generation facilities but is 
 34.30  subject to all applicable environmental review and permitting 
 34.31  procedures of Minnesota Statutes, sections 116C.51 to 116C.69; 
 34.32     (2) once permitted and constructed, is eligible to increase 
 34.33  the capacity of the associated transmission facilities without 
 34.34  additional state review upon filing notice with the commission; 
 34.35     (3) shall qualify as an "eligible energy technology" for 
 34.36  purposes of Minnesota Statutes, section 216B.1691; 
 35.1      (4) shall, prior to the approval by the commission of any 
 35.2   arrangement to build or expand a fossil-fuel-fired generation 
 35.3   facility, or enter into an agreement to purchase capacity or 
 35.4   energy from such a facility for a term exceeding five years, be 
 35.5   considered as a supply option for such generation facility, and 
 35.6   the commission shall ensure such consideration and take any 
 35.7   action with respect to such supply proposal that it deems to be 
 35.8   in the best interest of ratepayers; and 
 35.9      (5) shall make a good-faith effort to secure funding from 
 35.10  the United States Department of Energy and the United States 
 35.11  Department of Agriculture to conduct a demonstration project at 
 35.12  the facility for either geologic or terrestrial carbon 
 35.13  sequestration projects to achieve reductions in facility 
 35.14  emissions or carbon dioxide.  
 35.15     (b) This subdivision does not apply to competitive 
 35.16  solicitations for which bids have been received or proposals to 
 35.17  add utility-owned resources that are pending before the public 
 35.18  utilities commission.  
 35.19     Sec. 28.  [RENEWABLE DEVELOPMENT FUND ADMINISTRATION.] 
 35.20     The public utilities commission may review the 
 35.21  appropriateness of the transfer of the administration of the 
 35.22  renewable development account under Minnesota Statutes, section 
 35.23  116C.779, to an independent administrator initially selected by 
 35.24  the commissioner of commerce and answerable to a board of 
 35.25  directors that includes representatives from the public utility 
 35.26  currently administering the fund, environmental organizations, 
 35.27  the Mdewakanton Dakota Community, and other affected 
 35.28  communities.  The commission may authorize the transfer if, upon 
 35.29  completion of the review, the transfer is consistent with the 
 35.30  public interest. 
 35.31     Sec. 29.  [CONSERVATION IMPROVEMENT PROGRAM; EVALUATION.] 
 35.32     Subdivision 1.  [INDIVIDUAL UTILITY SYSTEMS.] (a) Each 
 35.33  energy utility subject to the conservation spending requirements 
 35.34  of Minnesota Statutes 2002, section 216B.241, shall contract 
 35.35  with an independent third party for a review of that utility's 
 35.36  conservation improvement program, to determine: 
 36.1      (1) the ability of conservation programs to avoid 
 36.2   transmission and distribution costs, and the value of that 
 36.3   avoidance; 
 36.4      (2) the potential for conservation for each utility's 
 36.5   system, considering each utility's own customer base and other 
 36.6   circumstances particular to that utility's system; 
 36.7      (3) whether conservation investments and expenditures are 
 36.8   declining in cost-effectiveness for that utility's system; and 
 36.9      (4) if the energy utility is experiencing a diminishing 
 36.10  return on conservation investments, what the estimated 
 36.11  break-even point is for that utility. 
 36.12     (b) For the purposes of this section: 
 36.13     (1) "energy utility" means a public utility, rural electric 
 36.14  cooperative, or municipality subject to the requirements of 
 36.15  Minnesota Statutes, section 216B.241; and 
 36.16     (2) "independent third party" means an entity not 
 36.17  affiliated with the energy utility; that is not involved in 
 36.18  creating or providing conservation project services to that 
 36.19  utility; that has knowledge of the energy industry and state 
 36.20  regulatory conservation process; expertise, or access to 
 36.21  expertise, in energy savings practices for residential and 
 36.22  commercial customers; and expertise, or access to expertise, in 
 36.23  energy savings practices for machinery used in Minnesota's major 
 36.24  industries. 
 36.25     (c) The energy utility shall provide the results of the 
 36.26  review under paragraph (a) to the commissioner of commerce with 
 36.27  the utility's next regularly scheduled conservation filing under 
 36.28  section 216B.241, or such other time as agreed to between the 
 36.29  commissioner and the utility.  The cost of the review may be 
 36.30  credited against the utility's conservation spending 
 36.31  requirement, subject to the limitations in Minnesota Statutes, 
 36.32  section 216B.241, subdivision 1b, paragraph (g), and subdivision 
 36.33  2, paragraph (i). 
 36.34     Subd. 2.  [CONSERVATION IMPROVEMENT PROGRAM; GENERAL 
 36.35  EVALUATION.] (a) The commissioner of commerce shall contract 
 36.36  with the legislative auditor or other independent third party 
 37.1   for a review, based on the information provided under 
 37.2   subdivision 1, of: 
 37.3      (1) the relevant state statutes, to determine if 
 37.4   conservation requirements could be eliminated or modified to 
 37.5   ensure that conservation dollars are directed toward the most 
 37.6   cost-effective conservation investments; 
 37.7      (2) the relevant state rules, to determine if current rules 
 37.8   allow or facilitate optimum conservation practices and 
 37.9   procedures; and 
 37.10     (3) the department of commerce's conservation regulatory 
 37.11  processes, to determine if the regulatory review process 
 37.12  currently employed results in optimum conservation investments. 
 37.13     (b) The costs of the review under paragraph (a) may be 
 37.14  recovered by the department as a general administrative expense 
 37.15  under Minnesota Statutes, section 216C.052, subdivision 2. 
 37.16     Sec. 30.  [PERSONS LIVING NEAR THE NUCLEAR FACILITY; 
 37.17  COMPENSATION.] 
 37.18     A natural person residing within 1,000 yards of the Prairie 
 37.19  Island nuclear generation facility may petition the public 
 37.20  utilities commission for monetary or in-kind compensation from 
 37.21  the owner of the generation facility for damage to the person 
 37.22  caused by the facility.  The commission may order the owner to 
 37.23  pay compensation, if the commission finds after a contested case 
 37.24  action that the evidence demonstrates that the proximity of the 
 37.25  natural person to the generation facility caused the damage 
 37.26  complained of.  
 37.27     Sec. 31.  [PERSONS LIVING NEAR THE NUCLEAR FACILITY; HEALTH 
 37.28  STUDY.] 
 37.29     The public utility that owns the Prairie Island nuclear 
 37.30  generation facility shall fund a study to determine the 
 37.31  potential for health effects of living near the Prairie Island 
 37.32  nuclear facility. 
 37.33     Sec. 32.  [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF 
 37.34  WATER; PROPOSED FACILITY ROSEMOUNT.] 
 37.35     Pursuant to Minnesota Statutes, section 103G.265, 
 37.36  subdivision 3, the legislature approves the consumptive use 
 38.1   under a permit of more than 2,000,000 gallons per day average in 
 38.2   a 30-day period in Rosemount, in connection with a gas fueled 
 38.3   combined cycle electric generating facility, subject to the 
 38.4   commissioner of natural resources making a determination that 
 38.5   the water remaining in the basin of origin will be adequate to 
 38.6   meet the basin's need for water and approval by the commissioner 
 38.7   of natural resources of all applicable permits. 
 38.8      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 38.9   following final enactment. 
 38.10     Sec. 33.  [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF 
 38.11  WATER; PROPOSED FACILITY MANKATO.] 
 38.12     Pursuant to Minnesota Statutes, section 103G.265, 
 38.13  subdivision 3, the legislature approves the consumptive use 
 38.14  under a permit of more than 2,000,000 gallons per day average in 
 38.15  a 30-day period in Mankato, in connection with a gas fueled 
 38.16  combined cycle electric generating facility, subject to the 
 38.17  commissioner of natural resources making a determination that 
 38.18  the water remaining in the basin of origin will be adequate to 
 38.19  meet the basin's need for water and approval by the commissioner 
 38.20  of natural resources of all applicable permits. 
 38.21     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 38.22  following final enactment. 
 38.23     Sec. 34.  [SUNSET.] 
 38.24     Minnesota Statutes, section 116C.779, subdivision 2, 
 38.25  expires June 30, 2007.  Minnesota Statutes, section 216B.241, 
 38.26  subdivision 1b, paragraph (j), expires July 1, 2007.  
 38.27     Sec. 35.  [REPEALER.] 
 38.28     Minnesota Statutes 2002, section 216C.051, subdivisions 1, 
 38.29  4, and 5, are repealed.  
 38.30     Sec. 36.  [EFFECTIVE DATE.] 
 38.31     All sections of this act are effective the day following 
 38.32  final enactment.