1.1 	A bill for an act
1.2 	relating to energy; providing for expedited cost
1.3 	recovery for certain transmission investments;
1.4 	authorizing and regulating transmission companies;
1.5 	permitting the transfer of transmission assets and
1.6 	operation to transmission companies; providing for
1.7 	expedited regulatory approval of transmission projects
1.8 	related to renewable generation; providing new
1.9 	criteria to analyze the need for transmission
1.10 	projects; establishing the framework for a wind energy
1.11 	tariff related to community development; requiring a
1.12 	wind integration study; transferring generation plant
1.13 	siting and transmission line routing authority from
1.14 	the Minnesota Environmental Quality Board to the
1.15 	Public Utilities Commission; providing for technical
1.16 	corrections to the energy assistance program;
1.17 	providing for a sustainably managed woody biomass
1.18 	generation project to satisfy the biomass mandate;
1.19 	providing for an electronic mail filing system at the
1.20 	Public Utilities Commission and Department of
1.21 	Commerce; making changes to the conservation
1.22 	investment program recommended by the legislative
1.23 	auditor; authorizing the creation of energy quality
1.24 	zones; regulating eligibility of biogas projects for
1.25 	the renewable energy production incentive; providing
1.26 	for the recovery of certain infrastructure investments
1.27 	by gas utilities; requiring a study of compensation of
1.28 	landowners for transmission easements; promoting the
1.29 	use of soy-diesel; providing for the adjustment of
1.30 	power purchase agreements to account for production
1.31 	tax payments; promoting the use of hydrogen as an
1.32 	energy source; requiring study of using biodiesel fuel
1.33 	to heat homes; expanding authority of city of
1.34 	Alexandria to enter into telecommunications-related
1.35 	joint ventures; appropriating money; amending
1.36 	Minnesota Statutes 2004, sections 13.681, by adding a
1.37 	subdivision; 116C.52, subdivisions 2, 4; 116C.53,
1.38 	subdivision 2; 116C.57, subdivisions 1, 2c, by adding
1.39 	a subdivision; 116C.575, subdivision 5; 116C.577;
1.40 	116C.58; 116C.61, subdivision 3; 116C.69, subdivisions
1.41 	2, 2a; 119A.15, subdivision 5a; 216B.02, by adding a
1.42 	subdivision; 216B.16, subdivision 6d, by adding
1.43 	subdivisions; 216B.1645, subdivision 1; 216B.2421,
1.44 	subdivision 2; 216B.2424, subdivisions 1, 2, 5a, 6, 8,
1.45 	by adding a subdivision; 216B.2425, subdivisions 2, 7;
1.46 	216B.243, subdivisions 3, 4, 5, 6, 7, 8; 216B.50,
2.1 	subdivision 1; 216B.62, subdivision 5, by adding a
2.2 	subdivision; 216B.79; 216C.052; 216C.09; 216C.41,
2.3 	subdivision 1; 462A.05, subdivisions 21, 23; Laws
2.4 	2002, chapter 329, section 5; proposing coding for new
2.5 	law in Minnesota Statutes, chapters 216B; 216C.
2.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.7 	ARTICLE 1
2.8 	TRANSMISSION COMPANIES

2.9 	Section 1. Minnesota Statutes 2004, section 216B.02, is
2.10 	amended by adding a subdivision to read:
2.11 		Subd. 10.Transmission company. "Transmission company"
2.12 	means persons, corporations, or other legal entities and their
2.13 	lessees, trustees, and receivers, engaged in the business of
2.14 	owning, operating, maintaining, or controlling in this state
2.15 	equipment or facilities for furnishing electric transmission
2.16 	service in Minnesota, but does not include public utilities,
2.17 	municipal electric utilities, municipal power agencies,
2.18 	cooperative electric associations, or generation and
2.19 	transmission cooperative power associations.

2.20 	Sec. 2. Minnesota Statutes 2004, section 216B.16, is
2.21 	amended by adding a subdivision to read:
2.22 		Subd. 7b.Transmission cost adjustment. (a)
2.23 	Notwithstanding any other provision of this chapter, the
2.24 	commission may approve a tariff mechanism for the automatic
2.25 	annual adjustment of charges for the Minnesota jurisdictional
2.26 	costs of new transmission facilities that have been separately
2.27 	filed and reviewed and approved by the commission under section
2.28 	216B.243 or are certified as a priority project or deemed to be
2.29 	a priority transmission project under section 216B.2425.
2.30 	(b) Upon filing by a public utility or utilities providing
2.31 	transmission service, the commission may approve, reject or
2.32 	modify, after notice and comment, a tariff that:
2.33 	(1) allows the utility to recover on a timely basis the
2.34 	costs net of revenues of facilities approved under section
2.35 	216B.243 or certified or deemed to be certified under section
2.36 	216B.2425;
2.37 	(2) allows a return on investment at the level approved in
2.38 	the utility's last general rate case, unless a different return
3.1 	is found to be consistent with the public interest;
3.2 	(3) provides a current return on construction work in
3.3 	progress, provided that recovery from Minnesota retail customers
3.4 	for the allowance for funds used during construction is not
3.5 	sought through any other mechanism;
3.6 	(4) allows for recovery of other expenses if shown to
3.7 	promote a least-cost project option or is otherwise in the
3.8 	public interest;
3.9 	(5) allocates project costs appropriately between wholesale
3.10 	and retail customers;
3.11 	(6) provides a mechanism for recovery above cost, if
3.12 	necessary to improve the overall economics of the project or
3.13 	projects or is otherwise in the public interest; and 
3.14 	(7) terminates recovery once costs have been fully
3.15 	recovered or have otherwise been reflected in the utility's
3.16 	general rates.
3.17 	(c) A public utility may file annual rate adjustments to be
3.18 	applied to customer bills paid under the tariff approved in
3.19 	paragraph (b).  In its filing, the public utility shall provide:
3.20 	(1) a description of and context for the facilities
3.21 	included for recovery;
3.22 	(2) a schedule for implementation of applicable projects;
3.23 	(3) the utility's costs for these projects;
3.24 	(4) a description of the utility's efforts to ensure the
3.25 	lowest costs to ratepayers for the project; and 
3.26 	(5) calculations to establish that the rate adjustment is
3.27 	consistent with the terms of the tariff established in paragraph
3.28 	(b).
3.29 	(d) Upon receiving a filing for a rate adjustment pursuant
3.30 	to the tariff established in paragraph (b), the commission shall
3.31 	approve the annual rate adjustments provided that, after notice
3.32 	and comment, the costs included for recovery through the tariff
3.33 	were or are expected to be prudently incurred and achieve
3.34 	transmission system improvements at the lowest feasible and
3.35 	prudent cost to ratepayers.

3.36 	Sec. 3. Minnesota Statutes 2004, section 216B.16, is
4.1 	amended by adding a subdivision to read:
4.2 		Subd. 7c.Transmission assets transfer. (a) Public
4.3 	utility owners of transmission facilities may, subject to Public
4.4 	Utilities Commission approval, transfer operational control or
4.5 	ownership of those transmission assets to a transmission company
4.6 	subject to Federal Energy Regulatory Commission jurisdiction.
4.7 	For transmission asset transfers by a public utility, the Public
4.8 	Utilities Commission must review the request to transfer either
4.9 	in the context of a general rate case under this section or by
4.10 	initiating other proceedings it determines provide adequate
4.11 	review of the transmission asset transfer.  The Public Utilities
4.12 	Commission may limit, in whole or in part, the transfer of
4.13 	transmission assets or the timing of those transfers by a public
4.14 	utility if it finds the limitation in the public interest.  The
4.15 	commission may only approve a transfer if it finds that the
4.16 	transfer is consistent with the public interest.
4.17 	In assessing the public interest, the commission shall
4.18 	evaluate, among other things, whether the transfer:
4.19 	(1) facilitates the development of transmission
4.20 	infrastructure necessary to ensure reliability, encourages the
4.21 	development of renewable resources, and accommodates energy
4.22 	transfers within and between states;
4.23 	(2) protects Minnesota ratepayers against the subsidization
4.24 	of wholesale transactions through retail rates;
4.25 	(3) ensures, in the case of operational control of
4.26 	transmission assets, that the state retains jurisdiction over
4.27 	the transferring utility for all aspects of service under
4.28 	chapter 216B;
4.29 	(4) impacts Minnesota retail rates; and 
4.30 	(5) protects Minnesota ratepayers from paying capital costs
4.31 	for transmission assets that have already been recovered.
4.32 	(b) A transfer of operational control or ownership of
4.33 	transmission assets by a public utility under this subdivision
4.34 	is subject to section 216B.50.  The relationship between a
4.35 	public utility transferring operational control of transmission
4.36 	assets to another entity under this subdivision is subject to
5.1 	the provisions of section 216B.48.  If a public utility
5.2 	transfers ownership of its transmission assets to a transmission
5.3 	provider subject to the jurisdiction of the Federal Energy
5.4 	Regulatory Commission, the Public Utilities Commission may
5.5 	permit the utility to file a rate schedule providing for the
5.6 	automatic adjustment of charges to recover the cost of
5.7 	transmission services purchased under tariff rates approved by
5.8 	the Federal Energy Regulatory Commission.
5.9 	(c) A municipal utility, a municipal power agency, or a
5.10 	joint venture pursuant to section 452.25 may transfer
5.11 	operational control or ownership of transmission assets to a
5.12 	transmission company, or make investments in a transmission
5.13 	company, if the governing body of the municipal utility,
5.14 	municipal power agency, or joint venture finds that the transfer
5.15 	or investment is consistent with the public interest and will
5.16 	facilitate the development of infrastructure necessary to ensure
5.17 	reliability.
5.18 	
EFFECTIVE DATE. This section is effective August 1, 2005,
5.19 	and applies to petitions for approval of transfer of
5.20 	transmission assets filed on or after that date and does not
5.21 	apply to proceedings pending before the Public Utilities
5.22 	Commission before that date.

5.23 	Sec. 4. Minnesota Statutes 2004, section 216B.2421,
5.24 	subdivision 2, is amended to read:
5.25 		Subd. 2.Large energy facility.  "Large energy facility"
5.26 	means:
5.27 	(1) any electric power generating plant or combination of
5.28 	plants at a single site with a combined capacity of 50,000
5.29 	kilowatts or more and transmission lines directly associated
5.30 	with the plant that are necessary to interconnect the plant to
5.31 	the transmission system;
5.32 	(2) any high-voltage transmission line with a capacity of
5.33 	200 kilovolts or more and greater than 1,500 feet in length;
5.34 	(3) any high-voltage transmission line with a capacity of
5.35 	100 kilovolts or more with more than ten miles of its length in
5.36 	Minnesota or that crosses a state line;
6.1 	(4) any pipeline greater than six inches in diameter and
6.2 	having more than 50 miles of its length in Minnesota used for
6.3 	the transportation of coal, crude petroleum or petroleum fuels
6.4 	or oil, or their derivatives;
6.5 	(5) any pipeline for transporting natural or synthetic gas
6.6 	at pressures in excess of 200 pounds per square inch with more
6.7 	than 50 miles of its length in Minnesota;
6.8 	(6) any facility designed for or capable of storing on a
6.9 	single site more than 100,000 gallons of liquefied natural gas
6.10 	or synthetic gas;
6.11 	(7) any underground gas storage facility requiring a permit
6.12 	pursuant to section 103I.681;
6.13 	(8) any nuclear fuel processing or nuclear waste storage or
6.14 	disposal facility; and
6.15 	(9) any facility intended to convert any material into any
6.16 	other combustible fuel and having the capacity to process in
6.17 	excess of 75 tons of the material per hour.

6.18 	Sec. 5. Minnesota Statutes 2004, section 216B.243,
6.19 	subdivision 3, is amended to read:
6.20 		Subd. 3.Showing required for construction.  No proposed
6.21 	large energy facility shall be certified for construction unless
6.22 	the applicant can show that demand for electricity cannot be met
6.23 	more cost effectively through energy conservation and
6.24 	load-management measures and unless the applicant has otherwise
6.25 	justified its need.  In assessing need, the commission shall
6.26 	evaluate:
6.27 	(1) the accuracy of the long-range energy demand forecasts
6.28 	on which the necessity for the facility is based;
6.29 	(2) the effect of existing or possible energy conservation
6.30 	programs under sections 216C.05 to 216C.30 and this section or
6.31 	other federal or state legislation on long-term energy demand;
6.32 	(3) the relationship of the proposed facility to overall
6.33 	state energy needs, as described in the most recent state energy
6.34 	policy and conservation report prepared under section 216C.18,
6.35 	or, in the case of a high-voltage transmission line, the
6.36 	relationship of the proposed line to regional energy needs, as
7.1 	presented in the transmission plan submitted under section
7.2 	216B.2425;
7.3 	(4) promotional activities that may have given rise to the
7.4 	demand for this facility;
7.5 	(5) benefits of this facility, including its uses to
7.6 	protect or enhance environmental quality, and to increase
7.7 	reliability of energy supply in Minnesota and the region;
7.8 	(6) possible alternatives for satisfying the energy demand
7.9 	or transmission needs including but not limited to potential for
7.10 	increased efficiency and upgrading of existing energy generation
7.11 	and transmission facilities, load-management programs, and
7.12 	distributed generation;
7.13 	(7) the policies, rules, and regulations of other state and
7.14 	federal agencies and local governments; and 
7.15 	(8) any feasible combination of energy conservation
7.16 	improvements, required under section 216B.241, that can (i)
7.17 	replace part or all of the energy to be provided by the proposed
7.18 	facility, and (ii) compete with it economically;
7.19 	(9) with respect to a high-voltage transmission line, the
7.20 	benefits of enhanced regional reliability, access, or
7.21 	deliverability to the extent these factors improve the
7.22 	robustness of the transmission system or lower costs for
7.23 	electric consumers in Minnesota;
7.24 	(10) whether the applicant or applicants are in compliance
7.25 	with applicable provisions of sections 216B.1691 and 216B.2425,
7.26 	subdivision 7, and have filed or will file by a date certain an
7.27 	application for certificate of need under this section or for
7.28 	certification as a priority electric transmission project under
7.29 	section 216B.2425 for any transmission facilities or upgrades
7.30 	identified under section 216B.2425, subdivision 7;
7.31 	(11) whether the applicant has made the demonstrations
7.32 	required under subdivision 3a; and 
7.33 	(12) if the applicant is proposing a nonrenewable
7.34 	generating plant, the applicant's assessment of the risk of
7.35 	environmental costs and regulation on that proposed facility
7.36 	over the expected useful life of the plant, including a proposed
8.1 	means of allocating costs associated with that risk.

8.2 	Sec. 6. Minnesota Statutes 2004, section 216B.243,
8.3 	subdivision 6, is amended to read:
8.4 		Subd. 6.Application fees; rules.  Any application for a
8.5 	certificate of need shall be accompanied by the application fee
8.6 	required pursuant to this subdivision. The application fee is
8.7 	to be applied toward the total costs reasonably necessary to
8.8 	complete the evaluation of need for the proposed facility.The
8.9 	maximum application fee shall be $50,000, except for an
8.10 	application for an electric power generating plant as defined in
8.11 	section 216B.2421, subdivision 2, clause (1), or a high-voltage
8.12 	transmission line as defined in section 216B.2421, subdivision
8.13 	2, clause (2), for which the maximum application fee shall be
8.14 	$100,000. The commission may require an additional fee to
8.15 	recover the costs of any rehearing.  The fee for a rehearing
8.16 	shall not be greater than the actual cost of the rehearing or
8.17 	the maximum fee specified above, whichever is less.Costs
8.18 	exceeding the application fee and reasonably necessary to
8.19 	complete the evaluation of need for the proposed facility shall
8.20 	be recovered from the applicant.  If the applicant is a public
8.21 	utility, a cooperative electric association, a generation and
8.22 	transmission cooperative electric association, a municipal power
8.23 	agency, a municipal electric utility, or a transmission company,
8.24 	the recovery shall be done pursuant to section 216B.62.The
8.25 	commission shall establish by rule pursuant to chapter 14 and
8.26 	sections 216C.05 to 216C.30 and this section, a schedule of fees
8.27 	based on the output or capacity of the facility and the
8.28 	difficulty of assessment of need.  Money collected in this
8.29 	manner shall be credited to the general fund of the state
8.30 	treasury.

8.31 	Sec. 7. Minnesota Statutes 2004, section 216B.2425,
8.32 	subdivision 2, is amended to read:
8.33 		Subd. 2.List development; transmission projects report.
 8.34 	(a) By November 1 of each odd-numbered year, each a transmission
8.35 	projects report must be submitted to the commission by each
8.36 	utility, organization, or company that:
9.1 	(1) is a public utility, a municipal utility, and a 
9.2 	cooperative electric association, or the generation and
9.3 	transmission organization that serves each utility or
9.4 	association, that or a transmission company; and 
9.5 	(2) owns or operates electric transmission lines in
9.6 	Minnesota shall .
9.7 	(b) The report may be submitted jointly or individually
9.8 	submit a transmission projects report to the commission.
9.9 	(c) The report must:
9.10 	(1) list specific present and reasonably foreseeable future
9.11 	inadequacies in the transmission system in Minnesota;
9.12 	(2) identify alternative means of addressing each
9.13 	inadequacy listed;
9.14 	(3) identify general economic, environmental, and social
9.15 	issues associated with each alternative; and
9.16 	(4) provide a summary of public input the utilities and
9.17 	associations have gathered related to the list of inadequacies
9.18 	and the role of local government officials and other interested
9.19 	persons in assisting to develop the list and analyze
9.20 	alternatives.
9.21 	(b) (d) To meet the requirements of this subdivision,
9.22 	entities reporting parties may rely on available information and
9.23 	analysis developed by a regional transmission organization or
9.24 	any subgroup of a regional transmission organization and may
9.25 	develop and include additional information as necessary.

9.26 	Sec. 8. Minnesota Statutes 2004, section 216B.50,
9.27 	subdivision 1, is amended to read:
9.28 		Subdivision 1.Commission approval required.  No public
9.29 	utility shall sell, acquire, lease, or rent any plant as an
9.30 	operating unit or system in this state for a total consideration
9.31 	in excess of $100,000, or merge or consolidate with another
9.32 	public utility or transmission company operating in this state,
9.33 	without first being authorized so to do by the commission.  Upon
9.34 	the filing of an application for the approval and consent of the
9.35 	commission thereto ,the commission shall investigate, with or
9.36 	without public hearing, and in case of .  The commission shall
10.1 	hold a public hearing, upon such notice as the commission may
10.2 	require, and if it shall find .  If the commission finds that the
10.3 	proposed action is consistent with the public interest,it shall
10.4 	give its consent and approval by order in writing.  In reaching
10.5 	its determination,the commission shall take into consideration
10.6 	the reasonable value of the property, plant, or securities to be
10.7 	acquired or disposed of, or merged and consolidated. The
10.8 	provisions of 
10.9 	This section shall does not be construed as
10.10 	applicable apply to the purchase of units of property for
10.11 	replacement or to the addition to replace or add to the plant of
10.12 	the public utility by construction.

10.13 	Sec. 9. Minnesota Statutes 2004, section 216B.62,
10.14 	subdivision 5, is amended to read:
10.15 		Subd. 5.Assessing cooperatives and municipals.  The
10.16 	commission and department may charge cooperative electric
10.17 	associations, generation and transmission cooperative electric
10.18 	associations, municipal power agencies,and municipal electric
10.19 	utilities their proportionate share of the expenses incurred in
10.20 	the review and disposition of resource plans, adjudication of
10.21 	service area disputes, proceedings under section 216B.1691,
10.22 	216B.2425, or 216B.243,and the costs incurred in the
10.23 	adjudication of complaints over service standards, practices,
10.24 	and rates.  Cooperative electric associations electing to become
10.25 	subject to rate regulation by the commission pursuant to section
10.26 	216B.026, subdivision 4, are also subject to this section.
10.27 	Neither a cooperative electric association nor a municipal
10.28 	electric utility is liable for costs and expenses in a calendar
10.29 	year in excess of the limitation on costs that may be assessed
10.30 	against public utilities under subdivision 2.  A cooperative
10.31 	electric association, generation and transmission cooperative
10.32 	electric association, municipal power agency,or municipal
10.33 	electric utility may object to and appeal bills of the
10.34 	commission and department as provided in subdivision 4.
10.35 	The department shall assess cooperatives and municipalities
10.36 	for the costs of alternative energy engineering activities under
11.1 	section 216C.261.  Each cooperative and municipality shall be
11.2 	assessed in proportion that its gross operating revenues for the
11.3 	sale of gas and electric service within the state for the last
11.4 	calendar year bears to the total of those revenues for all
11.5 	public utilities, cooperatives, and municipalities.

11.6 	Sec. 10. Minnesota Statutes 2004, section 216B.62, is
11.7 	amended by adding a subdivision to read:
11.8 		Subd. 5a.Assessing transmission companies. The
11.9 	commission and department may charge transmission companies
11.10 	their proportionate share of the expenses incurred in the review
11.11 	and disposition of proceedings under sections 216B.2425,
11.12 	216B.243, 216B.48, 216B.50, and 216B.79.  A transmission company
11.13 	is not liable for costs and expenses in a calendar year in
11.14 	excess of the limitation on costs that may be assessed against
11.15 	public utilities under subdivision 2.  A transmission company
11.16 	may object to and appeal bills of the commission and department
11.17 	as provided in subdivision 4.

11.18 	Sec. 11. Minnesota Statutes 2004, section 216B.79, is
11.19 	amended to read:
11.20 	216B.79 PREVENTATIVE MAINTENANCE.
11.21 	The commission may order public utilities to make adequate
11.22 	infrastructure investments and undertake sufficient preventative
11.23 	maintenance with regard to generation, transmission, and
11.24 	distribution facilities. The commission's authority under this
11.25 	section also applies to any transmission company that owns or
11.26 	operates electric transmission lines in Minnesota.

11.27 	Sec. 12. STAKEHOLDER PROCESS AND REPORT.
 11.28 		Subdivision 1.Membership. By June 15, 2005, the
11.29 	Legislative Electric Energy Task Force shall convene a
11.30 	stakeholder group consisting of one representative from each of
11.31 	the following groups:  transmission-owning investor-owned
11.32 	utilities, electric cooperatives, municipal power agencies,
11.33 	energy consumer advocates, business energy consumer advocates,
11.34 	residential energy consumer advocates, environmental
11.35 	organizations, the Minnesota Department of Commerce, and the
11.36 	Minnesota Public Utilities Commission.  The task force, in its
12.1 	sole discretion, may add other representatives to the
12.2 	stakeholder group.
12.3 		Subd. 2.Charge. (a) The stakeholder group shall explore
12.4 	whether increased efficiencies and effectiveness can be obtained
12.5 	through modifying current state statutes and administrative
12.6 	processes to certify and route high-voltage transmission lines,
12.7 	including modifications to section 216B.243.
12.8 	(b) In developing its recommendations, the stakeholder
12.9 	group shall consider:
12.10 	(1) whether the certification process established under
12.11 	section 216B.2425, subdivision 3, can be modified to encourage
12.12 	utilities to apply for certification under that section;
12.13 	(2) whether alternative certification processes are
12.14 	feasible for different types of transmission facilities; and 
12.15 	(3) whether additional cooperation between state agencies
12.16 	is needed to enhance the efficiency of the certification and
12.17 	routing processes, and whether modifications to those processes
12.18 	are appropriate.
12.19 		Subd. 3.Report. By January 15, 2006, the task force
12.20 	shall submit a report to the legislature summarizing the
12.21 	stakeholder group findings and any recommended changes to the
12.22 	certification and routing processes for high-voltage
12.23 	transmission lines.

12.24 	ARTICLE 2
12.25 	C-BED AND RENEWABLE TRANSMISSION

12.26 	Section 1. [216B.1612] COMMUNITY-BASED ENERGY
12.27 	DEVELOPMENT; TARIFF.
12.28 		Subdivision 1.Tariff establishment. A tariff shall be
12.29 	established to optimize local, regional, and state benefits from
12.30 	wind energy development, and to facilitate widespread
12.31 	development of community-based wind energy projects throughout
12.32 	Minnesota.
12.33 		Subd. 2.Definitions. (a) The terms used in this section
12.34 	have the meanings given them in this subdivision.
12.35 	(b) "C-BED tariff" or "tariff" means a community-based
12.36 	energy development tariff.
13.1 	(c) "Qualifying owner" means:
13.2 	(1) a Minnesota resident;
13.3 	(2) a limited liability corporation that is organized under
13.4 	the laws of this state and that is made up of members who are
13.5 	Minnesota residents;
13.6 	(3) a Minnesota nonprofit organization organized under
13.7 	chapter 317A;
13.8 	(4) a Minnesota cooperative association organized under
13.9 	chapter 308A or 308B, other than a rural electric cooperative
13.10 	association or a generation and transmission cooperative;
13.11 	(5) a Minnesota political subdivision or local government
13.12 	other than a municipal electric utility or municipal power
13.13 	agency, including, but not limited to, a county, statutory or
13.14 	home rule charter city, town, school district, or public or
13.15 	private higher education institution or any other local or
13.16 	regional governmental organization such as a board, commission,
13.17 	or association; or 
13.18 	(6) a tribal council.
13.19 	(d) "Net present value rate" means a rate equal to the net
13.20 	present value of the nominal payments to a project divided by
13.21 	the total expected energy production of the project over the
13.22 	life of its power purchase agreement.
13.23 	(e) "Standard reliability criteria" means:
13.24 	(1) can be safely integrated into and operated within the
13.25 	utility's grid without causing any adverse or unsafe
13.26 	consequences; and 
13.27 	(2) is consistent with the utility's resource needs as
13.28 	identified in its most recent resource plan submitted under
13.29 	section 216B.2422.
13.30 	(f) "Community-based energy project" or "C-BED project"
13.31 	means a new wind energy project that:
13.32 	(1) has no single qualifying owner owning more than 15
13.33 	percent of a C-BED project that consists of more than two
13.34 	turbines; or 
13.35 	(2) for C-BED projects of one or two turbines, is owned
13.36 	entirely by one or more qualifying owners, with at least 51
14.1 	percent of the total financial benefits over the life of the
14.2 	project flowing to qualifying owners; and 
14.3 	(3) has a resolution of support adopted by the county board
14.4 	of each county in which the project is to be located, or in the
14.5 	case of a project located within the boundaries of a
14.6 	reservation, the tribal council for that reservation.
14.7 		Subd. 3.Tariff rate. (a) The tariff described in
14.8 	subdivision 4 must have a rate schedule that allows for a rate
14.9 	up to a 2.7 cents per kilowatt hour net present value rate over
14.10 	the 20-year life of the power purchase agreement.  The tariff
14.11 	must provide for a rate that is higher in the first ten years of
14.12 	the power purchase agreement than in the last ten years.  The
14.13 	discount rate required to calculate the net present value must
14.14 	be the utility's normal discount rate used for its other
14.15 	business purposes.
14.16 	(b) The commission shall consider mechanisms to encourage
14.17 	the aggregation of C-BED projects.
14.18 	(c) The commission shall require that qualifying owners
14.19 	provide sufficient security to secure performance under the
14.20 	power purchase agreement, and shall prohibit the transfer of the
14.21 	C-BED project to a nonqualifying owner during the initial 20
14.22 	years of the contract.
14.23 		Subd. 4.Utilities to offer tariff. By December 1, 2005,
14.24 	each public utility providing electric service at retail shall
14.25 	file for commission approval a community-based energy
14.26 	development tariff consistent with subdivision 3.  Within 90
14.27 	days of the first commission approval order under this
14.28 	subdivision, each municipal power agency and generation and
14.29 	transmission cooperative electric association shall adopt a
14.30 	community-based energy development tariff as consistent as
14.31 	possible with subdivision 3.
14.32 		Subd. 5.Priority for c-bed projects. (a) A utility
14.33 	subject to section 216B.1691 that needs to construct new
14.34 	generation, or purchase the output from new generation, as part
14.35 	of its plan to satisfy its good faith objective under that
14.36 	section should take reasonable steps to determine if one or more
15.1 	C-BED projects are available that meet the utility's cost and
15.2 	reliability requirements, applying standard reliability
15.3 	criteria, to fulfill some or all of the identified need at
15.4 	minimal impact to customer rates.
15.5 	Nothing in this section shall be construed to obligate a
15.6 	utility to enter into a power purchase agreement under a C-BED
15.7 	tariff developed under this section.
15.8 	(b) Each utility shall include in its resource plan
15.9 	submitted under section 216B.2422 a description of its efforts
15.10 	to purchase energy from C-BED projects, including a list of the
15.11 	projects under contract and the amount of C-BED energy purchased.
15.12 	(c) The commission shall consider the efforts and
15.13 	activities of a utility to purchase energy from C-BED projects
15.14 	when evaluating its good faith effort towards meeting the
15.15 	renewable energy objective under section 216B.1691.
15.16 		Subd. 6.Property owner participation. To the extent
15.17 	feasible, a developer of a C-BED project must provide, in
15.18 	writing, an opportunity to invest in the C-BED project to each
15.19 	property owner on whose property a high voltage transmission
15.20 	line is constructed that will transmit the energy generated by
15.21 	the C-BED project to market.  This subdivision applies if the
15.22 	property is located and the owner resides in the county where
15.23 	the C-BED project is located.
15.24 	EFFECTIVE DATE.This subdivision is effective July 1,
15.25 	2005, and applies to transmission line construction beginning on
15.26 	or after that date.
15.27 		Subd. 7.Other c-bed tariff issues. (a) A
15.28 	community-based project developer and a utility shall negotiate
15.29 	the rate and power purchase agreement terms consistent with the
15.30 	tariff established under subdivision 4.
15.31 	(b) At the discretion of the developer, a community-based
15.32 	project developer and a utility may negotiate a power purchase
15.33 	agreement with terms different from the tariff established under
15.34 	subdivision 4.
15.35 	(c) A qualifying owner, or any combination of qualifying
15.36 	owners, may develop a joint venture project with a nonqualifying
16.1 	wind energy project developer.  However, the terms of the C-BED
16.2 	tariff may only apply to the portion of the energy production of
16.3 	the total project that is directly proportional to the equity
16.4 	share of the project owned by the qualifying owners.
16.5 	(d) A project that is operating under a power purchase
16.6 	agreement under a C-BED tariff is not eligible for net energy
16.7 	billing under section 216B.164, subdivision 3, or for production
16.8 	incentives under section 216C.41.
16.9 	(e) A public utility must receive commission approval of a
16.10 	power purchase agreement for a C-BED tariffed project.  The
16.11 	commission shall provide the utility's ratepayers an opportunity
16.12 	to address the reasonableness of the proposed power purchase
16.13 	agreement.  Unless a party objects to a contract within 30 days
16.14 	of submission of the contract to the commission the contract is
16.15 	deemed approved.

16.16 	Sec. 2. Minnesota Statutes 2004, section 216B.1645,
16.17 	subdivision 1, is amended to read:
16.18 		Subdivision 1.Commission authority.  Upon the petition
16.19 	of a public utility, the Public Utilities Commission shall
16.20 	approve or disapprove power purchase contracts, investments, or
16.21 	expenditures entered into or made by the utility to satisfy the
16.22 	wind and biomass mandates contained in sections 216B.169,
16.23 	216B.2423, and 216B.2424, and to satisfy the renewable energy
16.24 	objectives set forth in section 216B.1691,including reasonable
16.25 	investments and expenditures made to:
16.26 	(1) transmit the electricity generated from sources
16.27 	developed under those sections that is ultimately used to
16.28 	provide service to the utility's retail customers, or to 
16.29 	including studies necessary to identify new transmission
16.30 	facilities needed to transmit electricity to Minnesota retail
16.31 	customers from generating facilities constructed to satisfy the
16.32 	renewable energy objectives, provided that the costs of the
16.33 	studies have not been recovered previously under existing
16.34 	tariffs and the utility has filed an application for a
16.35 	certificate of need or for certification as a priority project
16.36 	under section 216B.2425 for the new transmission facilities
17.1 	identified in the studies; or 
17.2 	(2) develop renewable energy sources from the account
17.3 	required in section 116C.779.

17.4 	Sec. 3. Minnesota Statutes 2004, section 216B.2425,
17.5 	subdivision 7, is amended to read:
17.6 		Subd. 7.Transmission needed to support renewable
17.7 	resources. (a) Each entity subject to this section shall
17.8 	determine necessary transmission upgrades to support development
17.9 	of renewable energy resources required to meet objectives under
17.10 	section 216B.1691 and shall include those upgrades in its report
17.11 	under subdivision 2.
17.12 	(b) Transmission projects determined by the commission to
17.13 	be necessary to support a utility's plan under section 216B.1691
17.14 	to meet its obligations under that section must be certified as
17.15 	a priority electric transmission project, satisfying the
17.16 	requirements of section 216B.243.  In determining that a
17.17 	proposed transmission project is necessary to support a
17.18 	utility's plan under section 216B.1691, the commission must find
17.19 	that the applicant has met the following factors:
17.20 	(1) that the transmission facility is necessary to allow
17.21 	the delivery of power from renewable sources of energy to retail
17.22 	customers in Minnesota;
17.23 	(2) that the applicant has signed or will sign power
17.24 	purchase agreements, subject to commission approval, for
17.25 	resources to meet the renewable energy objective that are
17.26 	dependent upon or will use the capacity of the transmission
17.27 	facility to serve retail customers in Minnesota;
17.28 	(3) that the installation and commercial operation date of
17.29 	the renewable resources to satisfy the renewable energy
17.30 	objective will match the planned in-service date of the
17.31 	transmission facility; and 
17.32 	(4) that the proposed transmission facility is consistent
17.33 	with a least cost solution to the utility's need for additional
17.34 	electricity.

17.35 	Sec. 4. Minnesota Statutes 2004, section 216B.243,
17.36 	subdivision 8, is amended to read:
18.1 		Subd. 8.Exemptions.  This section does not apply to:
18.2 	(1) cogeneration or small power production facilities as
18.3 	defined in the Federal Power Act, United States Code, title 16,
18.4 	section 796, paragraph (17), subparagraph (A), and paragraph
18.5 	(18), subparagraph (A), and having a combined capacity at a
18.6 	single site of less than 80,000 kilowatts or to ;plants or
18.7 	facilities for the production of ethanol or fuel alcohol nor in ;
18.8 	or any case where the commission shall determine has determined 
18.9 	after being advised by the attorney general that its application
18.10 	has been preempted by federal law;
18.11 	(2) a high-voltage transmission line proposed primarily to
18.12 	distribute electricity to serve the demand of a single customer
18.13 	at a single location, unless the applicant opts to request that
18.14 	the commission determine need under this section or section
18.15 	216B.2425;
18.16 	(3) the upgrade to a higher voltage of an existing
18.17 	transmission line that serves the demand of a single customer
18.18 	that primarily uses existing rights-of-way, unless the applicant
18.19 	opts to request that the commission determine need under this
18.20 	section or section 216B.2425;
18.21 	(4) a high-voltage transmission line of one mile or less
18.22 	required to connect a new or upgraded substation to an existing,
18.23 	new, or upgraded high-voltage transmission line;
18.24 	(5) conversion of the fuel source of an existing electric
18.25 	generating plant to using natural gas; or 
18.26 	(6) the modification of an existing electric generating
18.27 	plant to increase efficiency, as long as the capacity of the
18.28 	plant is not increased more than ten percent or more than 100
18.29 	megawatts, whichever is greater; or 
18.30 	(7) a large energy facility that (i) generates electricity
18.31 	from wind energy conversion systems, (ii) will serve retail
18.32 	customers in Minnesota, (iii) is specifically intended to be
18.33 	used to meet the renewable energy objective under section
18.34 	216B.1691 or addresses a resource need identified in a current
18.35 	commission-approved or commission-reviewed resource plan under
18.36 	section 216B.2422; and (iv) derives at least 10 percent of the
19.1 	total nameplate capacity of the proposed project from one or
19.2 	more C-BED projects, as defined under section 216B.1612,
19.3 	subdivision 2, paragraph (f).

19.4 	Sec. 5. [216C.053] RENEWABLE ENERGY DEVELOPMENT.
19.5 	The commissioner of commerce must engage in activities to
19.6 	encourage deployment of cost effective renewable energy
19.7 	developments within the state.  The commissioner shall compile
19.8 	and maintain information concerning existing and potential
19.9 	renewable energy developments and resources in the state.  The
19.10 	commissioner shall provide, as appropriate, this information in
19.11 	proceedings for the determination of need for large energy
19.12 	facilities and for the review of a utility's integrated resource
19.13 	plan.  To the extent practicable, and in addition to any other
19.14 	obligation of an electric utility to furnish information, an
19.15 	electric utility seeking to add generation to its supply
19.16 	portfolio to serve Minnesota consumers shall provide the
19.17 	commissioner with notice of its intention.

19.18 	Sec. 6. WIND INTEGRATION STUDY.
 19.19 	The commission shall order all electric utilities, as
19.20 	defined in Minnesota Statutes, section 216B.1691, subdivision 1,
19.21 	paragraph (b), to participate in a statewide wind integration
19.22 	study.  Utilities subject to Minnesota Statutes, section
19.23 	216B.1691, shall jointly contract with an independent firm
19.24 	selected by the reliability administrator to conduct an
19.25 	engineering study of the impacts on reliability and costs
19.26 	associated with increasing wind capacity to 20 percent of
19.27 	Minnesota retail electric energy sales by the year 2020, and to
19.28 	identify and develop options for utilities to use to manage the
19.29 	intermittent nature of wind resources.  The contracting
19.30 	utilities shall cooperate with the firm conducting the study by
19.31 	providing data requested.  The reliability administrator shall
19.32 	manage the study process and shall appoint a group of
19.33 	stakeholders with experience in engineering and expertise in
19.34 	power systems or wind energy to review the study's proposed
19.35 	methods and assumptions and preliminary data.  The study must be
19.36 	completed by November 30, 2006.  Using the study results, the
20.1 	contracting utilities shall provide the commissioner of commerce
20.2 	with estimates of the impact on their electric rates of
20.3 	increasing wind capacity to 20 percent, assuming no reduction in
20.4 	reliability.  Electric utilities shall incorporate the study's
20.5 	findings into their utility integrated resource plans prepared
20.6 	under Minnesota Statutes, section 216B.2422.  The costs of the
20.7 	study are recoverable under Minnesota Statutes, section
20.8 	216C.052, subdivision 2, paragraph (c), clause (2).

20.9 	Sec. 7. EXPIRATION.
 20.10 	Section 3, paragraph (b), expires on January 1, 2010.

20.11 	ARTICLE 3
20.12 	ROUTING AND SITING AUTHORITY TRANSFER

20.13 	Section 1. Minnesota Statutes 2004, section 116C.52,
20.14 	subdivision 2, is amended to read:
20.15 		Subd. 2.board commission. "Board" shall mean the
20.16 	Minnesota Environmental Quality Board "Commission" means the
20.17 	Public Utilities Commission.

20.18 	Sec. 2. Minnesota Statutes 2004, section 116C.52,
20.19 	subdivision 4, is amended to read:
20.20 		Subd. 4.High voltage transmission line.  "High voltage
20.21 	transmission line" means a conductor of electric energy and
20.22 	associated facilities designed for and capable of operation at a
20.23 	nominal voltage of 100 kilovolts or more and is greater than
20.24 	1,500 feet in length.

20.25 	Sec. 3. Minnesota Statutes 2004, section 116C.53,
20.26 	subdivision 2, is amended to read:
20.27 		Subd. 2.Jurisdiction.  The board commission is hereby
20.28 	given the authority to provide for site and route selection for
20.29 	large electric power facilities.  The board commission shall
20.30 	issue permits for large electric power facilities in a timely
20.31 	fashion.  When the Public Utilities Commission has determined
20.32 	the and in a manner consistent with the overall determination of 
20.33 	need for the project under section 216B.243 or 216B.2425,.
20.34 	Questions of need, including size, type, and timing; alternative
20.35 	system configurations; and voltage are not within the board's
20.36 	siting and routing authority and must not be included in the
21.1 	scope of environmental review conducted under sections 116C.51
21.2 	to 116C.69.

21.3 	Sec. 4. Minnesota Statutes 2004, section 116C.57,
21.4 	subdivision 1, is amended to read:
21.5 		Subdivision 1.Site permit.  No person may construct a
21.6 	large electric generating plant without a site permit from the
21.7 	board commission.  A large electric generating plant may be
21.8 	constructed only on a site approved by the board commission.
21.9 	The board commission must incorporate into one proceeding the
21.10 	route selection for a high voltage transmission line that is
21.11 	directly associated with and necessary to interconnect the large
21.12 	electric generating plant to the transmission system and whose
21.13 	need is certified as part of the generating plant project by the
21.14 	Public Utilities Commission under section 216B.243.

21.15 	Sec. 5. Minnesota Statutes 2004, section 116C.57,
21.16 	subdivision 2c, is amended to read:
21.17 		Subd. 2c.Environmental review.  The board commissioner
21.18 	of the Department of Commerce shall prepare for the commission 
21.19 	an environmental impact statement on each proposed large
21.20 	electric generating plant or high voltage transmission line for
21.21 	which a complete application has been submitted. For any
21.22 	project that has obtained a certificate of need from the Public
21.23 	Utilities Commission, the board The commissioner shall not
21.24 	consider whether or not the project is needed.  No other state
21.25 	environmental review documents shall be required.  The board 
21.26 	commissioner shall study and evaluate any site or route proposed
21.27 	by an applicant and any other site or route the board commission 
21.28 	deems necessary that was proposed in a manner consistent with
21.29 	rules adopted by the board concerning the form, content, and
21.30 	timeliness of proposals for alternate sites or routes.

21.31 	Sec. 6. Minnesota Statutes 2004, section 116C.57, is
21.32 	amended by adding a subdivision to read:
21.33 		Subd. 9.Department of commerce to provide technical
21.34 	expertise and other assistance. The commissioner of the
21.35 	Department of Commerce shall consult with other state agencies
21.36 	and provide technical expertise and other assistance to the
22.1 	commission or to individual members of the commission for
22.2 	activities and proceedings under this section, sections 116C.51
22.3 	to 116C.697, and chapter 116I.  This assistance shall include
22.4 	the sharing of power plant siting and routing staff and other
22.5 	resources as necessary.  The commissioner shall periodically
22.6 	report to the commission concerning the Department of Commerce's
22.7 	costs of providing assistance.  The report shall conform to the
22.8 	schedule and include the required contents specified by the
22.9 	commission.  The commission shall include the costs of the
22.10 	assistance in assessments for activities and proceedings under
22.11 	those sections and reimburse the special revenue fund for those
22.12 	costs.  If either the commissioner or the commission deems it
22.13 	necessary, the department and the commission shall enter into an
22.14 	interagency agreement establishing terms and conditions for the
22.15 	provision of assistance and sharing of resources under this
22.16 	subdivision.

22.17 	Sec. 7. Minnesota Statutes 2004, section 116C.575,
22.18 	subdivision 5, is amended to read:
22.19 		Subd. 5.Environmental review.  For the projects
22.20 	identified in subdivision 2 and following these procedures, the
22.21 	board commissioner of the Department of Commerce shall prepare
22.22 	for the commission an environmental assessment.  The
22.23 	environmental assessment shall contain information on the human
22.24 	and environmental impacts of the proposed project and other
22.25 	sites or routes identified by the board commission and shall
22.26 	address mitigating measures for all of the sites or routes
22.27 	considered.  The environmental assessment shall be the only
22.28 	state environmental review document required to be prepared on
22.29 	the project.

22.30 	Sec. 8. Minnesota Statutes 2004, section 116C.577, is
22.31 	amended to read:
22.32 	116C.577 EMERGENCY PERMIT.
22.33 	(a) Any utility whose electric power system requires the
22.34 	immediate construction of a large electric power generating
22.35 	plant or high voltage transmission line due to a major
22.36 	unforeseen event may apply to the board commission for an
23.1 	emergency permit after providing .  The application shall provide 
23.2 	notice in writing to the Public Utilities Commission of the
23.3 	major unforeseen event and the need for immediate construction.
23.4 	The permit must be issued in a timely manner, no later than 195
23.5 	days after the board's commission's acceptance of the
23.6 	application and upon a finding by the board commission that (1)
23.7 	a demonstrable emergency exists, (2) the emergency requires
23.8 	immediate construction, and (3) adherence to the procedures and
23.9 	time schedules specified in section 116C.57 would jeopardize the
23.10 	utility's electric power system or would jeopardize the
23.11 	utility's ability to meet the electric needs of its customers in
23.12 	an orderly and timely manner.
23.13 	(b) A public hearing to determine if an emergency exists
23.14 	must be held within 90 days of the application.  The
23.15 	board commission, after notice and hearing, shall adopt rules
23.16 	specifying the criteria for emergency certification.

23.17 	Sec. 9. Minnesota Statutes 2004, section 116C.58, is
23.18 	amended to read:
23.19 	116C.58 ANNUAL HEARING.
23.20 	The board commission shall hold an annual public hearing at
23.21 	a time and place prescribed by rule in order to afford
23.22 	interested persons an opportunity to be heard regarding any
23.23 	matters relating to the siting of large electric generating
23.24 	power plants and routing of high voltage transmission lines.  At
23.25 	the meeting, the board commission shall advise the public of the
23.26 	permits issued by the board commission in the past year.
23.27 	The board commission shall provide at least ten days but no more
23.28 	than 45 days' notice of the annual meeting by mailing notice to
23.29 	those persons who have requested notice and by publication in
23.30 	the EQB Monitor and the commission's weekly calendar.

23.31 	Sec. 10. Minnesota Statutes 2004, section 116C.61,
23.32 	subdivision 3, is amended to read:
23.33 		Subd. 3.State agency participation. (a) State agencies
23.34 	authorized to issue permits required for construction or
23.35 	operation of large electric power generating plants or high
23.36 	voltage transmission lines shall participate during routing and
24.1 	siting at public hearings and all other activities of the board
24.2 	on specific site or route designations and design considerations
24.3 	of the board, and shall clearly state whether the site or route
24.4 	being considered for designation or permit and other design
24.5 	matters under consideration for approval will be in compliance
24.6 	with state agency standards, rules, or policies.
24.7 	(b) An applicant for a permit under this section or under
24.8 	chapter 116I shall notify the commissioner of agriculture if the
24.9 	proposed project will impact cultivated agricultural land, as
24.10 	that term is defined in section 116I.01, subdivision 4.  The
24.11 	commissioner may participate and advise the commission as to
24.12 	whether to grant a permit for the project and the best options
24.13 	for mitigating adverse impacts to agricultural lands if the
24.14 	permit is granted.  The Department of Agriculture shall be the
24.15 	lead agency on the development of any agricultural mitigation
24.16 	plan required for the project.

24.17 	Sec. 11. Minnesota Statutes 2004, section 116C.69,
24.18 	subdivision 2, is amended to read:
24.19 		Subd. 2.Site application fee.  Every applicant for a
24.20 	site permit shall pay to the board commissioner of commerce a
24.21 	fee in an amount equal to $500 for each $1,000,000 of production
24.22 	plant investment in the proposed installation as defined in the
24.23 	Federal Power Commission Uniform System of Accounts.  The board
24.24 	shall specify the time and manner of payment of the fee.  If any
24.25 	single payment requested by the board is in excess of 25 percent
24.26 	of the total estimated fee, the board shall show that the excess
24.27 	is reasonably necessary.  The applicant shall pay within 30 days
24.28 	of notification any additional fees reasonably necessary for
24.29 	completion of the site evaluation and designation process by the
24.30 	board.  In no event shall the total fees required of the
24.31 	applicant under this subdivision exceed an amount equal to 0.001
24.32 	of said production plant investment ($1,000 for each $1,000,000) 
24.33 	to cover the necessary and reasonable costs incurred by the
24.34 	commission in acting on the permit application and carrying out
24.35 	the requirements of sections 116C.51 to 116C.69.  The commission
24.36 	may adopt rules providing for the payment of the fee.  Section
25.1 	16A.1283 does not apply to establishment of this fee.  All money
25.2 	received pursuant to this subdivision shall be deposited in a
25.3 	special account.  Money in the account is appropriated to
25.4 	the board commissioner of commerce to pay expenses incurred in
25.5 	processing applications for site permits in accordance with
25.6 	sections 116C.51 to 116C.69 and in the event the expenses are
25.7 	less than the fee paid, to refund the excess to the applicant.

25.8 	Sec. 12. Minnesota Statutes 2004, section 116C.69,
25.9 	subdivision 2a, is amended to read:
25.10 		Subd. 2a.Route application fee.  Every applicant for a
25.11 	transmission line route permit shall pay to the board 
25.12 	commissioner of commerce a base fee of $35,000 plus a fee in an
25.13 	amount equal to $1,000 per mile length of the longest proposed
25.14 	route.  The board shall specify the time and manner of payment
25.15 	of the fee.  If any single payment requested by the board is in
25.16 	excess of 25 percent of the total estimated fee, the board shall
25.17 	show that the excess is reasonably necessary.  In the event the
25.18 	actual cost of processing an application up to the board's final
25.19 	decision to designate a route exceeds the above fee schedule,
25.20 	the board may assess the applicant any additional fees necessary
25.21 	to cover the actual costs, not to exceed an amount equal to $500
25.22 	per mile length of the longest proposed route fee to cover the
25.23 	necessary and reasonable costs incurred by the commission in
25.24 	acting on the permit application and carrying out the
25.25 	requirements of sections 116C.51 to 116C.69.  The commission may
25.26 	adopt rules providing for the payment of the fee.  Section
25.27 	16A.1283 does not apply to the establishment of this fee.  All
25.28 	money received pursuant to this subdivision shall be deposited
25.29 	in a special account.  Money in the account is appropriated to
25.30 	the board commissioner of commerce to pay expenses incurred in
25.31 	processing applications for route permits in accordance with
25.32 	sections 116C.51 to 116C.69 and in the event the expenses are
25.33 	less than the fee paid, to refund the excess to the applicant.

25.34 	Sec. 13. Minnesota Statutes 2004, section 216B.243,
25.35 	subdivision 4, is amended to read:
25.36 		Subd. 4.Application for certificate; hearing.  Any
26.1 	person proposing to construct a large energy facility shall
26.2 	apply for a certificate of need prior to applying and for a site
26.3 	or route permit under sections 116C.51 to 116C.69or prior to 
26.4 	construction of the facility.  The application shall be on forms
26.5 	and in a manner established by the commission.  In reviewing
26.6 	each application the commission shall hold at least one public
26.7 	hearing pursuant to chapter 14.  The public hearing shall be
26.8 	held at a location and hour reasonably calculated to be
26.9 	convenient for the public.  An objective of the public hearing
26.10 	shall be to obtain public opinion on the necessity of granting a
26.11 	certificate of need and, if a joint hearing is held, a site or
26.12 	route permit.  The commission shall designate a commission
26.13 	employee whose duty shall be to facilitate citizen participation
26.14 	in the hearing process. If Unless the commission and the
26.15 	Environmental Quality Board determine determines that a joint
26.16 	hearing on siting and need under this subdivision and section
26.17 	116C.57, subdivision 2d, is not feasible,or more efficient, and
26.18 	may further or otherwise not in the public interest, a joint
26.19 	hearing under those subdivisions may shall be held.

26.20 	Sec. 14. Minnesota Statutes 2004, section 216B.243,
26.21 	subdivision 5, is amended to read:
26.22 		Subd. 5.Approval, denial, or modification.  Within
26.23 	six 12 months of the submission of an application, the
26.24 	commission shall approve or deny a certificate of need for the
26.25 	facility.  Approval or denial of the certificate shall be
26.26 	accompanied by a statement of the reasons for the decision.
26.27 	Issuance of the certificate may be made contingent upon
26.28 	modifications required by the commission. If the commission has
26.29 	not issued an order on the application within the 12 months
26.30 	provided, the commission may extend the time period upon
26.31 	receiving the consent of the parties or on its own motion, for
26.32 	good cause, by issuing an order explaining the good cause
26.33 	justification for extension.

26.34 	Sec. 15. Minnesota Statutes 2004, section 216B.243,
26.35 	subdivision 7, is amended to read:
26.36 		Subd. 7.Participation by other agency or political
27.1 	subdivision. (a) Other state agencies authorized to issue
27.2 	permits for siting, construction or operation of large energy
27.3 	facilities, and those state agencies authorized to participate
27.4 	in matters before the commission involving utility rates and
27.5 	adequacy of utility services, shall present their position
27.6 	regarding need and participate in the public hearing process
27.7 	prior to the issuance or denial of a certificate of need.
27.8 	Issuance or denial of certificates of need shall be the sole and
27.9 	exclusive prerogative of the commission and these determinations
27.10 	and certificates shall be binding upon other state departments
27.11 	and agencies, regional, county, and local governments and
27.12 	special purpose government districts except as provided in
27.13 	sections 116C.01 to 116C.08 and 116D.04, subdivision 9.
27.14 	(b) An applicant for a certificate of need shall notify the
27.15 	commissioner of agriculture if the proposed project will impact
27.16 	cultivated agricultural land, as that term is defined in section
27.17 	116I.01, subdivision 4.  The commissioner may participate in any
27.18 	proceeding on the application and advise the commission as to
27.19 	whether to grant the certificate of need, and the best options
27.20 	for mitigating adverse impacts to agricultural lands if the
27.21 	certificate is granted.  The Department of Agriculture shall be
27.22 	the lead agency on the development of any agricultural
27.23 	mitigation plan required for the project.

27.24 	Sec. 16. Minnesota Statutes 2004, section 216C.052, is
27.25 	amended to read:
27.26 	216C.052 RELIABILITY ADMINISTRATOR.
27.27 		Subdivision 1.Responsibilities. (a) There is
27.28 	established the position of reliability administrator in the
27.29 	Department of Commerce Public Utilities Commission.  The
27.30 	administrator shall act as a source of independent expertise and
27.31 	a technical advisor to the commissioner,the commission,and the
27.32 	public, and the Legislative Electric Energy Task Force on issues
27.33 	related to the reliability of the electric system.  In
27.34 	conducting its work, the administrator shall provide assistance
27.35 	to the commission in administering and implementing the
27.36 	commission's duties under sections 116C.51 to 116C.69; 116C.691
28.1 	to 116C.697; 216B.2422; 216B.2425; 216B.243; chapter 116I; and
28.2 	rules associated with those sections.  Subject to resource
28.3 	constraints, the reliability administrator may also:
28.4 	(1) model and monitor the use and operation of the energy
28.5 	infrastructure in the state, including generation facilities,
28.6 	transmission lines, natural gas pipelines, and other energy
28.7 	infrastructure;
28.8 	(2) develop and present to the commission and parties
28.9 	technical analyses of proposed infrastructure projects, and
28.10 	provide technical advice to the commission;
28.11 	(3) present independent, factual, expert, and technical
28.12 	information on infrastructure proposals and reliability issues
28.13 	at public meetings hosted by the task force, the Environmental
28.14 	Quality Board, the department, or the commission.
28.15 	(b) Upon request and subject to resource constraints, the
28.16 	administrator shall provide technical assistance regarding
28.17 	matters unrelated to applications for infrastructure
28.18 	improvements to the task force, the department, or the
28.19 	commission.
28.20 	(c) The administrator may not advocate for any particular
28.21 	outcome in a commission proceeding, but may give technical
28.22 	advice to the commission as to the impact on the reliability of
28.23 	the energy system of a particular project or projects. The
28.24 	administrator must not be considered a party or a participant in
28.25 	any proceeding before the commission.
28.26 		Subd. 2.Administrative issues. (a) The commissioner 
28.27 	commission may select the administrator who shall serve for a
28.28 	four-year term.  The administrator may not have been a party or
28.29 	a participant in a commission energy proceeding for at least one
28.30 	year prior to selection by the commissioner commission.
28.31 	The commissioner commission shall oversee and direct the work of
28.32 	the administrator, annually review the expenses of the
28.33 	administrator, and annually approve the budget of the
28.34 	administrator. Pursuant to commission approval,the
28.35 	administrator may hire staff and may contract for technical
28.36 	expertise in performing duties when existing state resources are
29.1 	required for other state responsibilities or when special
29.2 	expertise is required.  The salary of the administrator is
29.3 	governed by section 15A.0815, subdivision 2.
29.4 	(b) Costs relating to a specific proceeding, analysis, or
29.5 	project are not general administrative costs.  For purposes of
29.6 	this section, "energy utility" means public utilities,
29.7 	generation and transmission cooperative electric associations,
29.8 	and municipal power agencies providing natural gas or electric
29.9 	service in the state.
29.10 	(c) The Department of Commerce commission shall pay:
29.11 	(1) the general administrative costs of the administrator,
29.12 	not to exceed $1,000,000 in a fiscal year, and shall assess
29.13 	energy utilities for those administrative costs.  These costs
29.14 	must be consistent with the budget approved by the commissioner 
29.15 	commission under paragraph (a).  The department commission shall
29.16 	apportion the costs among all energy utilities in proportion to
29.17 	their respective gross operating revenues from sales of gas or
29.18 	electric service within the state during the last calendar year,
29.19 	and shall then render a bill to each utility on a regular basis;
29.20 	and
29.21 	(2) costs relating to a specific proceeding analysis or
29.22 	project and shall render a bill to the specific energy utility
29.23 	or utilities participating in the proceeding, analysis, or
29.24 	project directly, either at the conclusion of a particular
29.25 	proceeding, analysis, or project, or from time to time during
29.26 	the course of the proceeding, analysis, or project.
29.27 	(d) For purposes of administrative efficiency, the
29.28 	department commission shall assess energy utilities and issue
29.29 	bills in accordance with the billing and assessment procedures
29.30 	provided in section 216B.62, to the extent that these procedures
29.31 	do not conflict with this subdivision.  The amount of the bills
29.32 	rendered by the department commission under paragraph (c) must
29.33 	be paid by the energy utility into an account in the special
29.34 	revenue fund in the state treasury within 30 days from the date
29.35 	of billing and is appropriated to the commissioner commission 
29.36 	for the purposes provided in this section.  The commission shall
30.1 	approve or approve as modified a rate schedule providing for the
30.2 	automatic adjustment of charges to recover amounts paid by
30.3 	utilities under this section.  All amounts assessed under this
30.4 	section are in addition to amounts appropriated to the
30.5 	commission and the department by other law.
30.6 		Subd. 3.Assessment and appropriation. In addition to
30.7 	the amount noted in subdivision 2, the commissioner commission 
30.8 	may assess utilities, using the mechanism specified in that
30.9 	subdivision, up to an additional $500,000 annually through June
30.10 	30, 2006.  The amounts assessed under this subdivision are
30.11 	appropriated to the commissioner commission, and some or all of
30.12 	the amounts assessed may be transferred to the commissioner of
30.13 	administration, for the purposes specified in section 16B.325
30.14 	and Laws 2001, chapter 212, article 1, section 3, as needed to
30.15 	implement those sections.
30.16 		Subd. 4.Expiration. This section expires June 30,
30.17 	2006 2007.

30.18 	Sec. 17. TRANSFERRING POWER PLANT SITING
30.19 	RESPONSIBILITIES.
 30.20 	To ensure greater public participation in energy
30.21 	infrastructure approval proceedings and to better integrate and
30.22 	align state energy and environmental policy goals with economic
30.23 	decisions involving large energy infrastructure, all
30.24 	responsibilities, as defined in Minnesota Statutes, section
30.25 	15.039, subdivision 1, held by the Environmental Quality Board
30.26 	relating to power plant siting and routing under Minnesota
30.27 	Statutes, sections 116C.51 to 116C.69; wind energy conversion
30.28 	systems under Minnesota Statutes, sections 116C.691 to 116C.697;
30.29 	pipelines under Minnesota Statutes, chapter 116I; and rules
30.30 	associated with those sections are transferred to the Public
30.31 	Utilities Commission under Minnesota Statutes, section 15.039,
30.32 	except that the responsibilities of the Environmental Quality
30.33 	Board under Minnesota Statutes, section 116C.83, subdivision 6,
30.34 	and Minnesota Rules, parts 4400.1700, 4400.2750, and 4410.7010
30.35 	to 4410.7070, are transferred to the commissioner of the
30.36 	Department of Commerce.  The power plant siting staff of the
31.1 	Environmental Quality Board are transferred to the Department of
31.2 	Commerce.  The department's budget shall be adjusted to reflect
31.3 	the transfer.
31.4 	The Department of Commerce and the Public Utilities Commission
31.5 	shall carry out these duties in accordance with the provisions
31.6 	of Minnesota Statutes, section 116D.03.

31.7 	Sec. 18. TRANSFERRING RELIABILITY ADMINISTRATOR
31.8 	RESPONSIBILITIES.
 31.9 	All responsibilities, as defined in Minnesota Statutes
31.10 	2004, section 15.039, subdivision 1, held by the Minnesota
31.11 	Department of Commerce relating to the reliability administrator
31.12 	under Minnesota Statutes, section 216C.052, are transferred to
31.13 	the Minnesota Public Utilities Commission under Minnesota
31.14 	Statutes, section 15.039.

31.15 	Sec. 19. REVISOR'S INSTRUCTION.
 31.16 	(a) The revisor of statutes shall change the words
31.17 	"Environmental Quality Board," "board," "chair of the board,"
31.18 	"chair," "board's," and similar terms, when they refer to the
31.19 	Environmental Quality Board or chair of the Environmental
31.20 	Quality Board, to the term "Public Utilities Commission,"
31.21 	"commission," or "commission's," as appropriate, where they
31.22 	appear in Minnesota Statutes, sections 13.741, subdivision 3,
31.23 	116C.51 to 116C.697, and chapter 116I.  The revisor shall also
31.24 	make those changes in Minnesota Rules, chapters 4400, 4401, and
31.25 	4415, except as specified in paragraph (b).
31.26 	(b) The revisor of statutes shall change the words
31.27 	"Environmental Quality Board," "board," "chair of the board,"
31.28 	"chair," "board's," and similar terms, when they refer to the
31.29 	Environmental Quality Board or chair of the Environmental
31.30 	Quality Board, to the term "commissioner of the Department of
31.31 	Commerce," "commissioner," or "commissioner's," as appropriate,
31.32 	where they appear in Minnesota Statutes, section 116C.83,
31.33 	subdivision 6; and Minnesota Rules, parts 4400.1700, subparts 1
31.34 	to 9, 11, and 12; 4400.2750; and 4410.7010 to 4410.7070.

31.35 	Sec. 20. EFFECTIVE DATE.
 31.36 	Sections 1 to 18 are effective July 1, 2005.

32.1 	ARTICLE 4
32.2 	ENERGY ASSISTANCE TECHNICAL CORRECTIONS

32.3 	Section 1. Minnesota Statutes 2004, section 13.681, is
32.4 	amended by adding a subdivision to read:
32.5 		Subd. 5.Energy programs. Treatment of data on
32.6 	individuals applying for benefits or services under energy
32.7 	programs is governed by section 216C.266.

32.8 	Sec. 2. Minnesota Statutes 2004, section 119A.15,
32.9 	subdivision 5a, is amended to read:
32.10 		Subd. 5a.Excluded programs.  Programs transferred to the
32.11 	Department of Education from the Department of Employment and
32.12 	Economic Development may not be included in the consolidated
32.13 	funding account and are ineligible for local consolidation.  The
32.14 	commissioner may not apply for federal waivers to include these
32.15 	programs in funding consolidation initiatives.  The programs
32.16 	include the following:
32.17 	(1) programs for the homeless under sections 116L.365 and
32.18 	119A.43;
32.19 	(2) emergency energy assistance and energy conservation
32.20 	programs under sections 119A.40 and 119A.42216C.263 and
32.21 	216C.265;
32.22 	(3) weatherization programs under section 119A.41 216C.264;
32.23 	(4) foodshelf programs under section 119A.44 and the
32.24 	emergency food assistance program; and
32.25 	(5) lead abatement programs under section 119A.45.

32.26 	Sec. 3. Minnesota Statutes 2004, section 216C.09, is
32.27 	amended to read:
32.28 	216C.09 COMMISSIONER DUTIES.
32.29 	(a) The commissioner shall:
32.30 	(1) manage the department as the central repository within
32.31 	the state government for the collection of data on energy;
32.32 	(2) prepare and adopt an emergency allocation plan
32.33 	specifying actions to be taken in the event of an impending
32.34 	serious shortage of energy, or a threat to public health,
32.35 	safety, or welfare;
32.36 	(3) undertake a continuing assessment of trends in the
33.1 	consumption of all forms of energy and analyze the social,
33.2 	economic, and environmental consequences of these trends;
33.3 	(4) carry out energy conservation measures as specified by
33.4 	the legislature and recommend to the governor and the
33.5 	legislature additional energy policies and conservation measures
33.6 	as required to meet the objectives of sections 216C.05 to
33.7 	216C.30;
33.8 	(5) collect and analyze data relating to present and future
33.9 	demands and resources for all sources of energy;
33.10 	(6) evaluate policies governing the establishment of rates
33.11 	and prices for energy as related to energy conservation, and
33.12 	other goals and policies of sections 216C.05 to 216C.30, and
33.13 	make recommendations for changes in energy pricing policies and
33.14 	rate schedules;
33.15 	(7) study the impact and relationship of the state energy
33.16 	policies to international, national, and regional energy
33.17 	policies;
33.18 	(8) design and implement a state program for the
33.19 	conservation of energy; this program shall include but not be
33.20 	limited to, general commercial, industrial, and residential, and
33.21 	transportation areas; such program shall also provide for the
33.22 	evaluation of energy systems as they relate to lighting,
33.23 	heating, refrigeration, air conditioning, building design and
33.24 	operation, and appliance manufacturing and operation;
33.25 	(9) inform and educate the public about the sources and
33.26 	uses of energy and the ways in which persons can conserve
33.27 	energy;
33.28 	(10) dispense funds made available for the purpose of
33.29 	research studies and projects of professional and civic
33.30 	orientation, which are related to either energy conservation,
33.31 	resource recovery, or the development of alternative energy
33.32 	technologies which conserve nonrenewable energy resources while
33.33 	creating minimum environmental impact;
33.34 	(11) charge other governmental departments and agencies
33.35 	involved in energy-related activities with specific information
33.36 	gathering goals and require that those goals be met;
34.1 	(12) design a comprehensive program for the development of
34.2 	indigenous energy resources.  The program shall include, but not
34.3 	be limited to, providing technical, informational, educational,
34.4 	and financial services and materials to persons, businesses,
34.5 	municipalities, and organizations involved in the development of
34.6 	solar, wind, hydropower, peat, fiber fuels, biomass, and other
34.7 	alternative energy resources.  The program shall be evaluated by
34.8 	the alternative energy technical activity; and
34.9 	(13) dispense loans, grants, or other financial aid from
34.10 	money received from litigation or settlement of alleged
34.11 	violations of federal petroleum-pricing regulations made
34.12 	available to the department for that purpose.  The commissioner
34.13 	shall adopt rules under chapter 14 for this purpose. Money
34.14 	dispersed under this clause must not include money received as a
34.15 	result of the settlement of the parties and order of the United
34.16 	States District Court for the District of Kansas in the case of
34.17 	In Re Department of Energy Stripper Well Exemption Litigation,
34.18 	578 F. Supp. 586 (D.Kan. 1983) and all money received after
34.19 	August 1, 1988, by the governor, the commissioner of finance, or
34.20 	any other state agency resulting from overcharges by oil
34.21 	companies in violation of federal law.
34.22 	(b) Further, the commissioner may participate fully in
34.23 	hearings before the Public Utilities Commission on matters
34.24 	pertaining to rate design, cost allocation, efficient resource
34.25 	utilization, utility conservation investments, small power
34.26 	production, cogeneration, and other rate issues.  The
34.27 	commissioner shall support the policies stated in section
34.28 	216C.05 and shall prepare and defend testimony proposed to
34.29 	encourage energy conservation improvements as defined in section
34.30 	216B.241.

34.31 	Sec. 4. Minnesota Statutes 2004, section 462A.05,
34.32 	subdivision 21, is amended to read:
34.33 		Subd. 21.Rental property loans.  The agency may make or
34.34 	purchase loans to owners of rental property that is occupied or
34.35 	intended for occupancy primarily by low- and moderate-income
34.36 	tenants and which does not comply with the standards established
35.1 	in section 216C.27 16B.61, subdivision 3 1, for the purpose of
35.2 	energy improvements necessary to bring the property into full or
35.3 	partial compliance with these standards.  For property which
35.4 	meets the other requirements of this subdivision, a loan may
35.5 	also be used for moderate rehabilitation of the property.  The
35.6 	authority granted in this subdivision is in addition to and not
35.7 	in limitation of any other authority granted to the agency in
35.8 	this chapter.  The limitations on eligible mortgagors contained
35.9 	in section 462A.03, subdivision 13, do not apply to loans under
35.10 	this subdivision.  Loans for the improvement of rental property
35.11 	pursuant to this subdivision may contain provisions that
35.12 	repayment is not required in whole or in part subject to terms
35.13 	and conditions determined by the agency to be necessary and
35.14 	desirable to encourage owners to maximize rehabilitation of
35.15 	properties.

35.16 	Sec. 5. Minnesota Statutes 2004, section 462A.05,
35.17 	subdivision 23, is amended to read:
35.18 		Subd. 23.Insuring financial institution loans.  The
35.19 	agency may participate in loans or establish a fund to insure
35.20 	loans, or portions of loans, that are made by any banking
35.21 	institution, savings association, or other lender approved by
35.22 	the agency, organized under the laws of this or any other state
35.23 	or of the United States having an office in this state, to
35.24 	owners of renter occupied homes or apartments that do not comply
35.25 	with standards set forth in section 216C.27 16B.61,
35.26 	subdivision 3 1, without limitations relating to the maximum
35.27 	incomes of the owners or tenants.  The proceeds of the insured
35.28 	portion of the loan must be used to pay the costs of
35.29 	improvements, including all related structural and other
35.30 	improvements, that will reduce energy consumption.

35.31 	Sec. 6. RECODIFICATION.
 35.32 	Minnesota Statutes 2004, sections 119A.40; 119A.41;
35.33 	119A.42; 119A.425; and 216C.27, subdivision 8, are recodified as
35.34 	sections 216C.263; 216C.264; 216C.265; 216C.266; and 16B.61,
35.35 	subdivision 8, respectively.

35.36 	ARTICLE 5
36.1 	WOODY BIOMASS MANDATE PROJECT

36.2 	Section 1. Minnesota Statutes 2004, section 216B.2424,
36.3 	subdivision 1, is amended to read:
36.4 		Subdivision 1.Farm-grown closed-loop biomass.  (a) For
36.5 	the purposes of this section, "farm-grown closed-loop biomass"
36.6 	means biomass, as defined in section 216C.051, subdivision 7,
36.7 	that:
36.8 	(1) is intentionally cultivated, harvested, and prepared
36.9 	for use, in whole or in part, as a fuel for the generation of
36.10 	electricity;
36.11 	(2) when combusted, releases an amount of carbon dioxide
36.12 	that is less than or approximately equal to the carbon dioxide
36.13 	absorbed by the biomass fuel during its growing cycle; and
36.14 	(3) is fired in a new or substantially retrofitted electric
36.15 	generating facility that is:
36.16 	(i) located within 400 miles of the site of the biomass
36.17 	production; and
36.18 	(ii) designed to use biomass to meet at least 75 percent of
36.19 	its fuel requirements.
36.20 	(b) The legislature finds that the negative environmental
36.21 	impacts within 400 miles of the facility resulting from
36.22 	transporting and combusting the biomass are offset in that
36.23 	region by the environmental benefits to air, soil, and water of
36.24 	the biomass production.
36.25 	(c) Among the biomass fuel sources that meet the
36.26 	requirements of paragraph (a), clause clauses (1) and (2) are
36.27 	poplar, aspen, willow, switch grass, sorghum, alfalfa, and 
36.28 	cultivated prairie grass and sustainably managed woody biomass.
36.29 	(d) For the purpose of this section, "sustainably managed
36.30 	woody biomass" means:
36.31 	(1) brush, trees, and other biomass harvested from within
36.32 	designated utility, railroad, and road rights-of-way;
36.33 	(2) upland and lowland brush harvested from lands
36.34 	incorporated into brushland habitat management activities of the
36.35 	Minnesota Department of Natural Resources;
36.36 	(3) upland and lowland brush harvested from lands managed
37.1 	in accordance with Minnesota Department of Natural Resources
37.2 	"Best Management Practices for Managing Brushlands";
37.3 	(4) logging slash or waste wood that is created by harvest,
37.4 	precommercial timber stand improvement to meet silvicultural
37.5 	objectives, or by fire, disease, or insect control treatments,
37.6 	and that is managed in compliance with the Minnesota Forest
37.7 	Resources Council's "Sustaining Minnesota Forest Resources:
37.8 	Voluntary Site-Level Forest Management Guidelines for
37.9 	Landowners, Loggers and Resource Managers" as modified by the
37.10 	requirement of this subdivision; and 
37.11 	(5) trees or parts of trees that do not meet the
37.12 	utilization standards for pulpwood, posts, bolts, or sawtimber
37.13 	as described in the Minnesota Department of Natural Resources
37.14 	Division of Forestry Timber Sales Manual, 1998, as amended as of
37.15 	May 1, 2005, and the Minnesota Department of Natural Resources
37.16 	Timber Scaling Manual, 1981, as amended as of May 1, 2005,
37.17 	except as provided in paragraph (a), clause (1), and this
37.18 	paragraph, clauses (1) to (3).

37.19 	Sec. 2. Minnesota Statutes 2004, section 216B.2424, is
37.20 	amended by adding a subdivision to read:
37.21 		Subd. 1a.Municipal waste-to-energy project. (a) This
37.22 	subdivision applies only to a biomass project owned or
37.23 	controlled, directly or indirectly, by two municipal utilities
37.24 	as described in subdivision 5a, paragraph (b).
37.25 	(b) Woody biomass from state-owned land must be harvested
37.26 	in compliance with an adopted management plan and a program of
37.27 	ecologically based third-party certification.
37.28 	(c) The project must prepare a fuel plan on an annual basis
37.29 	after commercial operation of the project as described in the
37.30 	power contract between the project and the public utility, and
37.31 	must also prepare annually certificates reflecting the types of
37.32 	fuel used in the preceding year by the project, as described in
37.33 	the power contract.  The fuel plans and certificates shall also
37.34 	be filed with the Minnesota Department of Natural Resources and
37.35 	the Minnesota Department of Commerce within 30 days after being
37.36 	provided to the public utility, as provided by the power
38.1 	contract.  Any person who believes the fuel plans, as amended,
38.2 	and certificates show that the project does not or will not
38.3 	comply with the fuel requirements of this subdivision may file a
38.4 	petition with the commission seeking such a determination.
38.5 	(d) The wood procurement process must utilize third-party
38.6 	audit certification systems to verify that applicable best
38.7 	management practices were utilized in the procurement of the
38.8 	sustainably managed biomass.  If there is a failure to so verify
38.9 	in any two consecutive years during the original contract term,
38.10 	the farm-grown closed-loop biomass requirements of subdivision 2
38.11 	must be increased to 50 percent for the remaining contract term
38.12 	period; however, if in two consecutive subsequent years after
38.13 	the increase has been implemented, it is verified that the
38.14 	conditions in this subdivision have been met, then for the
38.15 	remaining original contract term the closed-loop biomass mandate
38.16 	reverts to 25 percent.  If there is a subsequent failure to
38.17 	verify in a year after the first failure and implementation of
38.18 	the 50 percent requirement, then the closed-loop percentage
38.19 	shall remain at 50 percent for each remaining year of the
38.20 	contract term.
38.21 	(e) In the closed-loop plantation, no transgenic plants may
38.22 	be used.
38.23 	(f) No wood may be harvested from any lands identified by
38.24 	the final or preliminary Minnesota County Biological Survey as
38.25 	having statewide significance as native plant communities, large
38.26 	populations or concentrations of rare species, or critical
38.27 	animal habitat.
38.28 	(g) A wood procurement plan must be prepared every five
38.29 	years and public meetings must be held and written comments
38.30 	taken on the plan and documentation must be provided on why or
38.31 	why not the public inputs were used.
38.32 	(h) Guidelines or best management practices for sustainably
38.33 	managed woody biomass must be adopted by:
38.34 	(1) the Minnesota Department of Natural Resources for
38.35 	managing and maintaining brushland and open land habitat on
38.36 	public and private lands, including, but not limited to,
39.1 	provisions of sections 84.941, 84.942, and 97A.125; and 
39.2 	(2) the Minnesota Forest Resources Council for logging
39.3 	slash, using the most recent available scientific information
39.4 	regarding the removal of woody biomass from forest lands, to
39.5 	sustain the management of forest resources as defined by section
39.6 	89.001, subdivisions 8 and 9, with particular attention to soil
39.7 	productivity, biological diversity as defined by section 89A.01,
39.8 	subdivision 3, and wildlife habitat.
39.9 	These guidelines must be completed by July 1, 2007, and the
39.10 	process of developing them must incorporate public notification
39.11 	and comment.
39.12 	(i) The University of Minnesota Initiative for Renewable
39.13 	Energy and the Environment is encouraged to solicit and fund
39.14 	high-quality research projects to develop and consolidate
39.15 	scientific information regarding the removal of woody biomass
39.16 	from forest and brush lands, with particular attention to the
39.17 	environmental impacts on soil productivity, biological
39.18 	diversity, and sequestration of carbon.  The results of this
39.19 	research shall be made available to the public.
39.20 	(j) The two utilities owning or controlling, directly or
39.21 	indirectly, the biomass project described in subdivision 5a,
39.22 	paragraph (b), shall fund or obtain funding from nonstate
39.23 	sources of up to $150,000 to complete the guidelines or best
39.24 	management practices described in paragraph (h).  The
39.25 	expenditures to be funded under this paragraph do not include
39.26 	any of the expenditures to be funded under paragraph (i).

39.27 	Sec. 3. Minnesota Statutes 2004, section 216B.2424,
39.28 	subdivision 2, is amended to read:
39.29 		Subd. 2.Interim exemption.  (a) A biomass project
39.30 	proposing to use, as its primary fuel over the life of the
39.31 	project, short-rotation woody crops, may use as an interim fuel
39.32 	agricultural waste and other biomass which is not farm-grown
39.33 	closed-loop biomass for up to six years after the project's
39.34 	electric generating facility becomes operational; provided, the
39.35 	project developer demonstrates the project will use the
39.36 	designated short-rotation woody crops as its primary fuel after
40.1 	the interim period and provided the location of the interim fuel
40.2 	production meets the requirements of subdivision 1, paragraph
40.3 	(a), clause (3).
40.4 	(b) A biomass project proposing to use, as its primary fuel
40.5 	over the life of the project, short-rotation woody crops, may
40.6 	use as an interim fuel agricultural waste and other biomass
40.7 	which is not farm-grown closed-loop biomass for up to three
40.8 	years after the project's electric generating facility becomes
40.9 	operational; provided, the project developer demonstrates the
40.10 	project will use the designated short-rotation woody crops as
40.11 	its primary fuel after the interim period.
40.12 	(c) A biomass project that uses an interim fuel under the
40.13 	terms of paragraph (b) may, in addition, use an interim fuel
40.14 	under the terms of paragraph (a) for six years less the number
40.15 	of years that an interim fuel was used under paragraph (b).
40.16 	(d) A project developer proposing to use an exempt interim
40.17 	fuel under paragraphs (a) and (b) must demonstrate to the public
40.18 	utility that the project will have an adequate supply of
40.19 	short-rotation woody crops which meet the requirements of
40.20 	subdivision 1 to fuel the project after the interim period.
40.21 	(e) If a biomass project using an interim fuel under this
40.22 	subdivision is or becomes owned or controlled, directly or
40.23 	indirectly, by two municipal utilities as described in
40.24 	subdivision 5a, paragraph (b), the project is deemed to comply
40.25 	with the requirement under this subdivision to use as its
40.26 	primary fuel farm-grown closed-loop biomass if farm-grown
40.27 	closed-loop biomass comprises no less than 25 percent of the
40.28 	fuel used over the life of the project.  For purposes of this
40.29 	subdivision, "life of the project" means 20 years from the date
40.30 	the project becomes operational or the term of the applicable
40.31 	power purchase agreement between the project owner and the
40.32 	public utility, whichever is longer.

40.33 	Sec. 4. Minnesota Statutes 2004, section 216B.2424,
40.34 	subdivision 5a, is amended to read:
40.35 		Subd. 5a.Reduction of biomass mandate.  (a)
40.36 	Notwithstanding subdivision 5, the biomass electric energy
41.1 	mandate shall must be reduced from 125 megawatts to 110
41.2 	megawatts.
41.3 	(b) The Public Utilities Commission shall approve a request
41.4 	pending before the Public Utilities commission as of May 15,
41.5 	2003, for an amendment amendments to and assignment of a
41.6 	contract for power from power purchase agreement with the owner
41.7 	of a facility that uses short-rotation, woody crops as its
41.8 	primary fuel previously approved to satisfy a portion of the
41.9 	biomass mandate if the developer owner of the project agrees to
41.10 	reduce the size of its project from 50 megawatts to 35
41.11 	megawatts, while maintaining a an average price for energy at or
41.12 	below the current contract price.in nominal dollars measured
41.13 	over the term of the power purchase agreement at or below $104
41.14 	per megawatt-hour, exclusive of any price adjustments that may
41.15 	take effect subsequent to commission approval of the power
41.16 	purchase agreement, as amended.  The commission shall also
41.17 	approve, as necessary, any subsequent assignment or sale of the
41.18 	power purchase agreement or ownership of the project to an
41.19 	entity owned or controlled, directly or indirectly, by two
41.20 	municipal utilities located north of Constitutional Route No. 8,
41.21 	as described in section 161.114, which currently own electric
41.22 	and steam generation facilities using coal as a fuel and which
41.23 	propose to retrofit their existing municipal electrical
41.24 	generating facilities to utilize biomass fuels in order to
41.25 	perform the power purchase agreement.
41.26 	(c) If the power purchase agreement described in paragraph
41.27 	(b) is assigned to an entity that is, or becomes, owned or
41.28 	controlled, directly or indirectly, by two municipal entities as
41.29 	described in paragraph (b), and the power purchase agreement
41.30 	meets the price requirements of paragraph (b), the commission
41.31 	shall approve any amendments to the power purchase agreement
41.32 	necessary to reflect the changes in project location and
41.33 	ownership and any other amendments made necessary by those
41.34 	changes.  The commission shall also specifically find that:
41.35 	(1) the power purchase agreement complies with and fully
41.36 	satisfies the provisions of this section to the full extent of
42.1 	its 35-megawatt capacity;
42.2 	(2) all costs incurred by the public utility and all
42.3 	amounts to be paid by the public utility to the project owner
42.4 	under the terms of the power purchase agreement are fully
42.5 	recoverable pursuant to section 216B.1645;
42.6 	(3) subject to prudency review by the commission, the
42.7 	public utility may recover from its Minnesota retail customers
42.8 	the Minnesota jurisdictional portion of the amounts that may be
42.9 	incurred and paid by the public utility during the full term of
42.10 	the power purchase agreement; and 
42.11 	(4) if the purchase power agreement meets the requirements
42.12 	of this subdivision, it is reasonable and in the public interest.
42.13 	(d) The commission shall specifically approve recovery by
42.14 	the public utility of any and all Minnesota jurisdictional costs
42.15 	incurred by the public utility to improve, construct, install,
42.16 	or upgrade transmission, distribution, or other electrical
42.17 	facilities owned by the public utility or other persons in order
42.18 	to permit interconnection of the retrofitted biomass-fueled
42.19 	generating facilities or to obtain transmission service for the
42.20 	energy provided by the facilities to the public utility pursuant
42.21 	to section 216B.1645, and shall disapprove any provision in the
42.22 	power purchase agreement that requires the developer or owner of
42.23 	the project to pay the jurisdictional costs or that permit the
42.24 	public utility to terminate the power purchase agreement as a
42.25 	result of the existence of those costs or the public utility's
42.26 	obligation to pay any or all of those costs.

42.27 	Sec. 5. Minnesota Statutes 2004, section 216B.2424,
42.28 	subdivision 6, is amended to read:
42.29 		Subd. 6.Remaining megawatt compliance process.  (a) If
42.30 	there remain megawatts of biomass power generating capacity to
42.31 	fulfill the mandate in subdivision 5 after the commission has
42.32 	taken final action on all contracts filed by September 1, 2000,
42.33 	by a public utility, as amended and assigned,this subdivision
42.34 	governs final compliance with the biomass energy mandate in
42.35 	subdivision 5 subject to the requirements of subdivisions 7 and
42.36 	8.
43.1 	(b) To the extent not inconsistent with this subdivision,
43.2 	the provisions of subdivisions 2, 3, 4, and 5 apply to proposals
43.3 	subject to this subdivision.
43.4 	(c) A public utility must submit proposals to the
43.5 	commission to complete the biomass mandate.  The commission
43.6 	shall require a public utility subject to this section to issue
43.7 	a request for competitive proposals for projects for electric
43.8 	generation utilizing biomass as defined in paragraph (f) of this
43.9 	subdivision to provide the remaining megawatts of the mandate.
43.10 	The commission shall set an expedited schedule for submission of
43.11 	proposals to the utility, selection by the utility of proposals
43.12 	or projects, negotiation of contracts, and review by the
43.13 	commission of the contracts or projects submitted by the utility
43.14 	to the commission.
43.15 	(d) Notwithstanding the provisions of subdivisions 1 to 5
43.16 	but subject to the provisions of subdivisions 7 and 8, a new or
43.17 	existing facility proposed under this subdivision that is fueled
43.18 	either by biomass or by co-firing biomass with nonbiomass may
43.19 	satisfy the mandate in this section.  Such a facility need not
43.20 	use biomass that complies with the definition in subdivision 1
43.21 	if it uses biomass as defined in paragraph (f) of this
43.22 	subdivision.  Generating capacity produced by co-firing of
43.23 	biomass that is operational as of April 25, 2000, does not meet
43.24 	the requirements of the mandate, except that additional
43.25 	co-firing capacity added at an existing facility after April 25,
43.26 	2000, may be used to satisfy this mandate.  Only the number of
43.27 	megawatts of capacity at a facility which co-fires biomass that
43.28 	are directly attributable to the biomass and that become
43.29 	operational after April 25, 2000, count toward meeting the
43.30 	biomass mandate in this section.
43.31 	(e) Nothing in this subdivision precludes a facility
43.32 	proposed and approved under this subdivision from using fuel
43.33 	sources that are not biomass in compliance with subdivision 3.
43.34 	(f) Notwithstanding the provisions of subdivision 1, for
43.35 	proposals subject to this subdivision, "biomass" includes
43.36 	farm-grown closed-loop biomass; agricultural wastes, including
44.1 	animal, poultry, and plant wastes; and waste wood, including
44.2 	chipped wood, bark, brush, residue wood, and sawdust.
44.3 	(g) Nothing in this subdivision affects in any way
44.4 	contracts entered into as of April 25, 2000, to satisfy the
44.5 	mandate in subdivision 5.
44.6 	(h) Nothing in this subdivision requires a public utility
44.7 	to retrofit its own power plants for the purpose of co-firing
44.8 	biomass fuel, nor is a utility prohibited from retrofitting its
44.9 	own power plants for the purpose of co-firing biomass fuel to
44.10 	meet the requirements of this subdivision.

44.11 	Sec. 6. Minnesota Statutes 2004, section 216B.2424,
44.12 	subdivision 8, is amended to read:
44.13 		Subd. 8.Agricultural biomass requirement.  Of the 125
44.14 	megawatts mandated in subdivision 5, or 110 megawatts mandated
44.15 	in subdivision 5a,at least 75 megawatts of the generating
44.16 	capacity must be generated by facilities that use agricultural
44.17 	biomass as the principal fuel source.  For purposes of this
44.18 	subdivision, agricultural biomass includes only farm-grown
44.19 	closed-loop biomass and agricultural waste, including animal,
44.20 	poultry, and plant wastes.  For purposes of this subdivision,
44.21 	"principal fuel source" means a fuel source that satisfies at
44.22 	least 75 percent of the fuel requirements of an electric power
44.23 	generating facility.  Nothing in this subdivision is intended to
44.24 	expand the fuel source requirements of subdivision 5.

44.25 	ARTICLE 6
44.26 	E-FILING

44.27 	Section 1. ESTABLISHMENT OF FUND.
 44.28 	The Department of Commerce's e-filing account is
44.29 	established.  The commissioner of commerce shall make a onetime
44.30 	assessment of no more than $300,000 to cover the actual cost of
44.31 	implementing this section.  The funds assessed must be deposited
44.32 	in the account.  Any excess funds in the account upon completion
44.33 	must be refunded to the utilities proportionately to the amount
44.34 	assessed.  Each public utility, generation and transmission
44.35 	cooperative electric association, municipal power agency,
44.36 	telephone company, and telecommunications carrier must be
45.1 	assessed in proportion to its respective gross jurisdictional
45.2 	operating revenues for sales of gas, electric, or
45.3 	telecommunications service in the state in the last calendar
45.4 	year.  Revenue in the account is appropriated to the
45.5 	commissioner of commerce for the costs associated with
45.6 	establishing an e-filing system that allows documents filed with
45.7 	the Public Utilities Commission to be filed and retrieved via
45.8 	the Internet.  Revenue in the account remains available until
45.9 	expended.

45.10 	Sec. 2. COMPLETION DATE.
 45.11 	The e-filing system described in section 1 must be
45.12 	operational by July 1, 2006.

45.13 	Sec. 3. EFFECTIVE DATE.
 45.14 	Sections 1 and 2 are effective the day following final
45.15 	enactment.

45.16 	ARTICLE 7
45.17 	CIP TECHNICAL CORRECTIONS

45.18 	Section 1. Minnesota Statutes 2004, section 216B.241,
45.19 	subdivision 1b, is amended to read:
45.20 		Subd. 1b.Conservation improvement by cooperative
45.21 	association or municipality.  (a) This subdivision applies to:
45.22 	(1) a cooperative electric association that provides retail
45.23 	service to its members;
45.24 	(2) a municipality that provides electric service to retail
45.25 	customers; and
45.26 	(3) a municipality with gross operating revenues in excess
45.27 	of $5,000,000 from sales of natural gas to retail customers.
45.28 	(b) Each cooperative electric association and municipality
45.29 	subject to this subdivision shall spend and invest for energy
45.30 	conservation improvements under this subdivision the following
45.31 	amounts:
45.32 	(1) for a municipality, 0.5 percent of its gross operating
45.33 	revenues from the sale of gas and 1.5 percent of its gross
45.34 	operating revenues from the sale of electricity, excluding gross
45.35 	operating revenues from electric and gas service provided in the
45.36 	state to large electric customer facilities; and
46.1 	(2) for a cooperative electric association, 1.5 percent of
46.2 	its gross operating revenues from service provided in the state,
46.3 	excluding gross operating revenues from service provided in the
46.4 	state to large electric customer facilities indirectly through a
46.5 	distribution cooperative electric association.
46.6 	(c) Each municipality and cooperative electric association
46.7 	subject to this subdivision shall identify and implement energy
46.8 	conservation improvement spending and investments that are
46.9 	appropriate for the municipality or association, except that a
46.10 	municipality or association may not spend or invest for energy
46.11 	conservation improvements that directly benefit a large electric
46.12 	customer facility for which the commissioner has issued an
46.13 	exemption under subdivision 1a, paragraph (b).
46.14 	(d) Each municipality and cooperative electric association
46.15 	subject to this subdivision may spend and invest annually up to
46.16 	ten percent of the total amount required to be spent and
46.17 	invested on energy conservation improvements under this
46.18 	subdivision on research and development projects that meet the
46.19 	definition of energy conservation improvement in subdivision 1
46.20 	and that are funded directly by the municipality or cooperative
46.21 	electric association.
46.22 	(e) Load-management activities that do not reduce energy
46.23 	use but that increase the efficiency of the electric system may
46.24 	be used to meet the following percentage 50 percent of the
46.25 	conservation investment and spending requirements of this
46.26 	subdivision:
46.27 	(1) 2002 - 90 percent;
46.28 	(2) 2003 - 80 percent;
46.29 	(3) 2004 - 65 percent; and 
46.30 	(4) 2005 and thereafter - 50 percent.
46.31 	(f) A generation and transmission cooperative electric
46.32 	association that provides energy services to cooperative
46.33 	electric associations that provide electric service at retail to
46.34 	consumers may invest in energy conservation improvements on
46.35 	behalf of the associations it serves and may fulfill the
46.36 	conservation, spending, reporting, and energy savings goals on
47.1 	an aggregate basis.  A municipal power agency or other
47.2 	not-for-profit entity that provides energy service to municipal
47.3 	utilities that provide electric service at retail may invest in
47.4 	energy conservation improvements on behalf of the municipal
47.5 	utilities it serves and may fulfill the conservation, spending,
47.6 	reporting, and energy savings goals on an aggregate basis, under
47.7 	an agreement between the municipal power agency or
47.8 	not-for-profit entity and each municipal utility for funding the
47.9 	investments.
47.10 	(g) At least every two four years, on a schedule determined
47.11 	by the commissioner, each municipality or cooperative shall file
47.12 	an overview of its conservation improvement plan with the
47.13 	commissioner.  With this overview, the municipality or
47.14 	cooperative shall also provide an evaluation to the commissioner
47.15 	detailing its energy conservation improvement spending and
47.16 	investments for the previous period.  The evaluation must
47.17 	briefly describe each conservation program and must specify the
47.18 	energy savings or increased efficiency in the use of energy
47.19 	within the service territory of the utility or association that
47.20 	is the result of the spending and investments.  The evaluation
47.21 	must analyze the cost-effectiveness of the utility's or
47.22 	association's conservation programs, using a list of baseline
47.23 	energy and capacity savings assumptions developed in
47.24 	consultation with the department.  The commissioner shall review
47.25 	each evaluation and make recommendations, where appropriate, to
47.26 	the municipality or association to increase the effectiveness of
47.27 	conservation improvement activities.  Up to three percent of a
47.28 	utility's conservation spending obligation under this section
47.29 	may be used for program pre-evaluation, testing, and monitoring
47.30 	and program evaluation.  The overview and evaluation filed by a
47.31 	municipality with less than 60,000,000 kilowatt hours in annual
47.32 	retail sales of electric service may consist of a letter from
47.33 	the governing board of the municipal utility to the department
47.34 	providing the amount of annual conservation spending required of
47.35 	that municipality and certifying that the required amount has
47.36 	been spent on conservation programs pursuant to this subdivision.
48.1 	(h) The commissioner shall also review each evaluation for
48.2 	whether a portion of the money spent on residential conservation
48.3 	improvement programs is devoted to programs that directly
48.4 	address the needs of renters and low-income persons unless an
48.5 	insufficient number of appropriate programs are available.  For
48.6 	the purposes of this subdivision and subdivision 2, "low-income"
48.7 	means an income at or below 50 percent of the state median
48.8 	income.
48.9 	(i) As part of its spending for conservation improvement, a
48.10 	municipality or association may contribute to the energy and
48.11 	conservation account.  A municipality or association may propose
48.12 	to the commissioner to designate that all or a portion of funds
48.13 	contributed to the account be used for research and development
48.14 	projects that can best be implemented on a statewide basis.  Any
48.15 	amount contributed must be remitted to the commissioner by
48.16 	February 1 of each year.
48.17 	(j) A municipality may spend up to 50 percent of its
48.18 	required spending under this section to refurbish an existing
48.19 	district heating or cooling system.  This paragraph expires July
48.20 	1, 2007.

48.21 	Sec. 2. Minnesota Statutes 2004, section 216B.241,
48.22 	subdivision 2, is amended to read:
48.23 		Subd. 2.Programs.  (a) The commissioner may require
48.24 	public utilities to make investments and expenditures in energy
48.25 	conservation improvements, explicitly setting forth the interest
48.26 	rates, prices, and terms under which the improvements must be
48.27 	offered to the customers.  The required programs must cover no
48.28 	more than a two-year four-year period.  Public utilities shall
48.29 	file conservation improvement plans by June 1, on a schedule
48.30 	determined by order of the commissioner, but at least every four
48.31 	years.  Plans received by a public utility by June 1 must be
48.32 	approved or approved as modified by the commissioner by December
48.33 	1 of that same year.  The commissioner shall give special
48.34 	consideration and encouragement to programs that bring about
48.35 	significant net savings through the use of energy-efficient
48.36 	lighting.  The commissioner shall evaluate the program on the
49.1 	basis of cost-effectiveness and the reliability of technologies
49.2 	employed.  The commissioner's order must provide to the extent
49.3 	practicable for a free choice, by consumers participating in the
49.4 	program, of the device, method, material, or project
49.5 	constituting the energy conservation improvement and for a free
49.6 	choice of the seller, installer, or contractor of the energy
49.7 	conservation improvement, provided that the device, method,
49.8 	material, or project seller, installer, or contractor is duly
49.9 	licensed, certified, approved, or qualified, including under the
49.10 	residential conservation services program, where applicable.
49.11 	(b) The commissioner may require a utility to make an
49.12 	energy conservation improvement investment or expenditure
49.13 	whenever the commissioner finds that the improvement will result
49.14 	in energy savings at a total cost to the utility less than the
49.15 	cost to the utility to produce or purchase an equivalent amount
49.16 	of new supply of energy.  The commissioner shall nevertheless
49.17 	ensure that every public utility operate one or more programs
49.18 	under periodic review by the department.
49.19 	(c) Each public utility subject to subdivision 1a may spend
49.20 	and invest annually up to ten percent of the total amount
49.21 	required to be spent and invested on energy conservation
49.22 	improvements under this section by the utility on research and
49.23 	development projects that meet the definition of energy
49.24 	conservation improvement in subdivision 1 and that are funded
49.25 	directly by the public utility.
49.26 	(d) A public utility may not spend for or invest in energy
49.27 	conservation improvements that directly benefit a large electric
49.28 	customer facility for which the commissioner has issued an
49.29 	exemption pursuant to subdivision 1a, paragraph (b).  The
49.30 	commissioner shall consider and may require a utility to
49.31 	undertake a program suggested by an outside source, including a
49.32 	political subdivision or a nonprofit or community organization.
49.33 	(e) The commissioner may, by order, establish a list of
49.34 	programs that may be offered as energy conservation improvements
49.35 	by a public utility, municipal utility, cooperative electric
49.36 	association, or other entity providing conservation services
50.1 	pursuant to this section.  The list of programs may include
50.2 	rebates for high-efficiency appliances, rebates or subsidies for
50.3 	high-efficiency lamps, small business energy audits, and
50.4 	building recommissioning.  The commissioner may, by order,
50.5 	change this list to add or subtract programs as the commissioner
50.6 	determines is necessary to promote efficient and effective
50.7 	conservation programs.
50.8 	(f) The commissioner shall ensure that a portion of the
50.9 	money spent on residential conservation improvement programs is
50.10 	devoted to programs that directly address the needs of renters
50.11 	and low-income persons, in proportion to the amount the utility
50.12 	has historically spent on such programs based on the most recent
50.13 	three-year average relative to the utility's total conservation
50.14 	spending under this section, unless an insufficient number of
50.15 	appropriate programs are available.
50.16 	(g) A utility, a political subdivision, or a nonprofit or
50.17 	community organization that has suggested a program, the
50.18 	attorney general acting on behalf of consumers and small
50.19 	business interests, or a utility customer that has suggested a
50.20 	program and is not represented by the attorney general under
50.21 	section 8.33 may petition the commission to modify or revoke a
50.22 	department decision under this section, and the commission may
50.23 	do so if it determines that the program is not cost-effective,
50.24 	does not adequately address the residential conservation
50.25 	improvement needs of low-income persons, has a long-range
50.26 	negative effect on one or more classes of customers, or is
50.27 	otherwise not in the public interest.  The commission shall
50.28 	reject a petition that, on its face, fails to make a reasonable
50.29 	argument that a program is not in the public interest.
50.30 	(h) The commissioner may order a public utility to include,
50.31 	with the filing of the utility's proposed conservation
50.32 	improvement plan under paragraph (a), the results of an
50.33 	independent audit of the utility's conservation improvement
50.34 	programs and expenditures performed by the department or an
50.35 	auditor with experience in the provision of energy conservation
50.36 	and energy efficiency services approved by the commissioner and
51.1 	chosen by the utility.  The audit must specify the energy
51.2 	savings or increased efficiency in the use of energy within the
51.3 	service territory of the utility that is the result of the
51.4 	spending and investments.  The audit must evaluate the
51.5 	cost-effectiveness of the utility's conservation programs.
51.6 	(i) Up to three percent of a utility's conservation
51.7 	spending obligation under this section may be used for program
51.8 	pre-evaluation, testing, and monitoring and program audit and
51.9 	evaluation.

51.10 	ARTICLE 8
51.11 	POWER QUALITY ZONES

51.12 	Section 1. [216B.2426] OPPORTUNITIES FOR DISTRIBUTED
51.13 	GENERATION.
51.14 	The commission shall ensure that opportunities for the
51.15 	installation of distributed generation, as that term is defined
51.16 	in section 216B.169, subdivision 1, paragraph (c), are
51.17 	considered in any proceeding under section 216B.2422, 216B.2425,
51.18 	or 216B.243.

51.19 	Sec. 2. [216B.82] LOCAL POWER QUALITY ZONES.
51.20 	(a) Upon joint petition of a public utility as defined in
51.21 	section 216B.02, subdivision 4, and any customer located within
51.22 	the utility's service territory, the commission may establish a
51.23 	zone within that utility's service territory where the utility
51.24 	will install additional, redundant or upgraded components of the
51.25 	electric distribution infrastructure that are designed to
51.26 	decrease the risk of power outages, provided the utility and all
51.27 	of its customers located within the proposed zone have approved
51.28 	the installation of the components and the financial recovery
51.29 	plan prior to the creation of the zone.  Prior to commission
51.30 	approval, the utility must notify each customer within the
51.31 	proposed zone of the total costs of the installation, an
51.32 	estimate of the customer's share of those costs, and the
51.33 	potential benefits of the local power quality zone to the
51.34 	customer.
51.35 	(b) The commission shall authorize the utility to collect
51.36 	all costs of the installation of any components under this
52.1 	section, including initial investment, operation and maintenance
52.2 	costs and taxes from all customers within the zone, through
52.3 	tariffs and surcharges for service in a zone that appropriately
52.4 	reflect the cost of service to those customers, provided the
52.5 	customers agree to pay all costs for a predetermined period,
52.6 	including costs of component removal, if appropriate.
52.7 	(c) Nothing in this section limits the ability of the
52.8 	utility and any customer to enter into customer-specific
52.9 	agreements pursuant to applicable statutory, rule, or tariff
52.10 	provisions.
52.11 	Nothing in this section shall be construed to permit the quality
52.12 	of service outside a designated zone to decline.

52.13 	ARTICLE 9
52.14 	BIOGAS INCENTIVE PAYMENTS

52.15 	Section 1. Minnesota Statutes 2004, section 216C.41,
52.16 	subdivision 1, is amended to read:
52.17 		Subdivision 1.Definitions.  (a) The definitions in this
52.18 	subdivision apply to this section.
52.19 	(b) "Qualified hydroelectric facility" means a
52.20 	hydroelectric generating facility in this state that:
52.21 	(1) is located at the site of a dam, if the dam was in
52.22 	existence as of March 31, 1994; and
52.23 	(2) begins generating electricity after July 1, 1994, or
52.24 	generates electricity after substantial refurbishing of a
52.25 	facility that begins after July 1, 2001.
52.26 	(c) "Qualified wind energy conversion facility" means a
52.27 	wind energy conversion system in this state that:
52.28 	(1) produces two megawatts or less of electricity as
52.29 	measured by nameplate rating and begins generating electricity
52.30 	after December 31, 1996, and before July 1, 1999;
52.31 	(2) begins generating electricity after June 30, 1999,
52.32 	produces two megawatts or less of electricity as measured by
52.33 	nameplate rating, and is:
52.34 	(i) owned by a resident of Minnesota or an entity that is
52.35 	organized under the laws of this state, is not prohibited from
52.36 	owning agricultural land under section 500.24, and owns the land
53.1 	where the facility is sited;
53.2 	(ii) owned by a Minnesota small business as defined in
53.3 	section 645.445;
53.4 	(iii) owned by a Minnesota nonprofit organization;
53.5 	(iv) owned by a tribal council if the facility is located
53.6 	within the boundaries of the reservation;
53.7 	(v) owned by a Minnesota municipal utility or a Minnesota
53.8 	cooperative electric association; or
53.9 	(vi) owned by a Minnesota political subdivision or local
53.10 	government, including, but not limited to, a county, statutory
53.11 	or home rule charter city, town, school district, or any other
53.12 	local or regional governmental organization such as a board,
53.13 	commission, or association; or
53.14 	(3) begins generating electricity after June 30, 1999,
53.15 	produces seven megawatts or less of electricity as measured by
53.16 	nameplate rating, and:
53.17 	(i) is owned by a cooperative organized under chapter 308A
53.18 	other than a Minnesota cooperative electric association; and
53.19 	(ii) all shares and membership in the cooperative are held
53.20 	by an entity that is not prohibited from owning agricultural
53.21 	land under section 500.24.
53.22 	(d) "Qualified on-farm biogas recovery facility" means an
53.23 	anaerobic digester system that:
53.24 	(1) is located at the site of an agricultural
53.25 	operation; and 
53.26 	(2) is owned by an entity that is not prohibited from
53.27 	owning agricultural land under section 500.24 and that owns or
53.28 	rents the land where the facility is located; and 
53.29 	(3) begins generating electricity after July 1, 2001.
53.30 	(e) "Anaerobic digester system" means a system of
53.31 	components that processes animal waste based on the absence of
53.32 	oxygen and produces gas used to generate electricity.

53.33 	ARTICLE 10
53.34 	GAS INFRASTRUCTURE COST

53.35 	Section 1. [216B.1635] RECOVERY OF ELIGIBLE
53.36 	INFRASTRUCTURE REPLACEMENT COSTS BY GAS UTILITIES.
54.1 		Subdivision 1.Definitions. (a) "Gas utility" means a
54.2 	public utility as defined in section 216B.02, subdivision 4,
54.3 	that furnishes natural gas service to retail customers.
54.4 	(b) "Gas utility infrastructure costs" or "GUIC" means gas
54.5 	utility projects that:
54.6 	(1) do not serve to increase revenues by directly
54.7 	connecting the infrastructure replacement to new customers;
54.8 	(2) are in service but were not included in the gas
54.9 	utility's rate base in its most recent general rate case; and 
54.10 	(3) replace or modify existing infrastructure if the
54.11 	replacement or modification does not constitute a betterment,
54.12 	unless the betterment is required by a political subdivision, as
54.13 	evidenced by specific documentation from the government entity
54.14 	requiring the replacement or modification of infrastructure.
54.15 	(c) "Gas utility projects" means relocation and replacement
54.16 	of natural gas facilities located in the public right-of-way
54.17 	required by the construction or improvement of a highway, road,
54.18 	street, public building, or other public work by or on behalf of
54.19 	the United States, the State of Minnesota, or a political
54.20 	subdivision.
54.21 		Subd. 2.Filing. (a) The commission may approve a gas
54.22 	utility's petition for a rate schedule to recover GUIC under
54.23 	this section.  A gas utility may petition the commission to
54.24 	recover a rate of return, income taxes on the rate of return,
54.25 	incremental property taxes, plus incremental depreciation
54.26 	expense associated with GUIC.
54.27 	(b) The filing is subject to the following:
54.28 	(1) a gas utility may submit a filing under this section no
54.29 	more than once per year;
54.30 	(2) a gas utility must file sufficient information to
54.31 	satisfy the commission regarding the proposed GUIC or be subject
54.32 	to denial by the commission.  The information includes, but is
54.33 	not limited to:
54.34 	(i) the government entity ordering the gas utility project
54.35 	and the purpose for which the project is undertaken;
54.36 	(ii) the location, description, and costs associated with
55.1 	the project;
55.2 	(iii) a description of the costs, and salvage value, if
55.3 	any, associated with the existing infrastructure replaced or
55.4 	modified as a result of the project;
55.5 	(iv) the proposed rate design and an explanation of why the
55.6 	proposed rate design is in the public interest;
55.7 	(v) the magnitude and timing of any known future gas
55.8 	utility projects that the utility may seek to recover under this
55.9 	section;
55.10 	(vi) the magnitude of GUIC in relation to the gas utility's
55.11 	base revenue as approved by the commission in the gas utility's
55.12 	most recent general rate case, exclusive of gas purchase costs
55.13 	and transportation charges;
55.14 	(vii) the magnitude of GUIC in relation to the gas
55.15 	utility's capital expenditures since its most recent general
55.16 	rate case;
55.17 	(viii) the amount of time since the utility last filed a
55.18 	general rate case and the utility's reasons for seeking recovery
55.19 	outside of a general rate case; and 
55.20 	(ix) documentation supporting the calculation of the GUIC.
55.21 		Subd. 3.Commission authority. The commission may issue
55.22 	orders and adopt rules necessary to implement and administer
55.23 	this section.
55.24 	
EFFECTIVE DATE. This section is effective the day
55.25 	following final enactment.

55.26 	Sec. 2. REPORT TO LEGISLATURE.
 55.27 	The Department of Commerce shall review the operation and
55.28 	impact of the GUIC recovery mechanism established under
55.29 	Minnesota Statutes, section 216B.1635, on ratepayers and the
55.30 	utility and submit a report of its findings and recommendations
55.31 	to the legislature four years after the effective date of this
55.32 	section.

55.33 	Sec. 3. SUNSET.
 55.34 	Sections 1 and 2 shall expire on June 30, 2015.

55.35 	ARTICLE 11
55.36 	EMINENT DOMAIN LANDOWNER COMPENSATION

56.1 	Section. 1. Landowner payments working group.
56.2 		Subdivision 1.Membership. By June 15, 2005, the
56.3 	Legislative Electric Energy Task Force shall convene a landowner
56.4 	payments working group consisting of up to 12 members, including
56.5 	representatives from each of the following groups:
56.6 	transmission-owning investor-owned utilities, electric
56.7 	cooperatives, municipal power agencies, Farm Bureau, Farmers
56.8 	Union, county commissioners, real estate appraisers and others
56.9 	with an interest and expertise in landowner rights and the
56.10 	market value of rural property.
56.11 		Subd. 2.Appointment. The chairs of the Legislative
56.12 	Electric Energy Task Force and the chairs of the senate and
56.13 	house committees with primary jurisdiction over energy policy
56.14 	shall jointly appoint the working group members.
56.15 		Subd. 3.Charge. (a) The landowner payments working
56.16 	group shall research alternative methods of remunerating
56.17 	landowners on whose land high voltage transmission lines have
56.18 	been constructed.
56.19 	(b) In developing its recommendations, the working group
56.20 	shall:
56.21 	(1) examine different methods of landowner payments that
56.22 	operate in other states and countries;
56.23 	(2) consider innovative alternatives to lump-sum payments
56.24 	that extend payments over the life of the transmission line and
56.25 	that run with the land if the land is conveyed to another owner;
56.26 	(3) consider alternative ways of structuring payments that
56.27 	are equitable to landowners and utilities.
56.28 		Subd. 4.Expenses. Members of the working group shall be
56.29 	reimbursed for expenses as provided in Minnesota Statutes,
56.30 	section 15.059, subdivision 6.  Expenses of the landowner
56.31 	payments working group shall not exceed $10,000 without the
56.32 	approval of the chairs of the Legislative Electric Energy Task
56.33 	Force.
56.34 		Subd. 5.Report. The landowner payments working group
56.35 	shall present its findings and recommendations, including
56.36 	legislative recommendations and model legislation, if any, in a
57.1 	report to the Legislative Electric Energy Task Force by January
57.2 	15, 2006.

57.3 	ARTICLE 12
57.4 	TECHNICAL CORRECTION

57.5 	Section 1. Minnesota Statutes 2004, section 216B.16,
57.6 	subdivision 6d, is amended to read:
57.7 		Subd. 6d.Wind energy; property tax.  An owner of a wind
57.8 	energy conversion facility which is required to pay property
57.9 	taxes under section 272.02, subdivision 22, or production taxes
57.10 	under section 272.029, and any related or successor provisions,
57.11 	or a public utility regulated by the Public Utilities Commission
57.12 	which purchases the wind generated electricity may petition the
57.13 	commission to include in any power purchase agreement between
57.14 	the owner of the facility and the public utility the amount of
57.15 	property taxes and production taxes paid by the owner of the
57.16 	facility.  The Public Utilities Commission shall require the
57.17 	public utility to amend the power purchase agreement to include
57.18 	the property taxes and production taxes paid by the owner of the
57.19 	facility in the price paid by the utility for wind generated
57.20 	electricity if the commission finds:
57.21 	(1) the owner of the facility has paid the property taxes
57.22 	or production taxes required by this subdivision;
57.23 	(2) the power purchase agreement between the public utility
57.24 	and the owner does not already require the utility to pay the
57.25 	amount of property taxes or production taxes the owner has paid
57.26 	under this subdivision, or, in the case of a power purchase
57.27 	agreement entered into prior to 1997, the amount of property or
57.28 	production taxes paid by the owner in any year of the power
57.29 	purchase agreement exceeds the amount of such property or
57.30 	production taxes included in the price paid by the utility to
57.31 	the owner, as reflected in the owner's bid documents; and
57.32 	(3) the commission has approved a rate schedule containing
57.33 	provisions for the automatic adjustment of charges for utility
57.34 	service in direct relation to the charges ordered by the
57.35 	commission under section 272.02, subdivision 22, or section
57.36 	272.029.

58.1 	ARTICLE 13
58.2 	HYDROGEN

58.3 	Section 1. [216B.811] DEFINITIONS.
58.4 		Subdivision 1.Scope. For purposes of sections 216B.811
58.5 	to 216B.815, the terms defined in this section have the meanings
58.6 	given them.
58.7 		Subd. 2.Fuel cell. "Fuel cell" means an electrochemical
58.8 	device that produces useful electricity, heat, and water vapor,
58.9 	and operates as long as it is provided fuel.
58.10 		Subd. 3.Hydrogen. "Hydrogen" means hydrogen produced
58.11 	using native energy sources.
58.12 		Subd. 4.Related technologies. "Related technologies"
58.13 	means balance of plant components necessary to make hydrogen and
58.14 	fuel cell systems function; turbines, reciprocating, and other
58.15 	combustion engines capable of operating on hydrogen; and
58.16 	electrolyzers, reformers, and other equipment and processes
58.17 	necessary to produce, purify, store, distribute, and use
58.18 	hydrogen for energy.

58.19 	Sec. 2. [216B.812] FOSTERING THE TRANSITION TOWARD ENERGY
58.20 	SECURITY.
58.21 		Subdivision 1.Early purchase and deployment of hydrogen,
58.22 	fuel cells, and related technologies by the state. The
58.23 	Department of Administration shall identify opportunities for
58.24 	demonstrating the use of hydrogen fuel cells within state-owned
58.25 	facilities, vehicle fleets, and operations.
58.26 	The department shall purchase and demonstrate hydrogen,
58.27 	fuel cells, and related technologies in ways that strategically
58.28 	contribute to realizing Minnesota's hydrogen economy goal as set
58.29 	forth in section 216B.013, and which contribute to the following
58.30 	nonexclusive list of objectives:
58.31 	(1) provide needed performance data to the marketplace;
58.32 	(2) identify code and regulatory issues to be resolved;
58.33 	(3) advance or validate a critical area of research;
58.34 	(4) foster economic development and job creation in the
58.35 	state;
58.36 	(5) raise public awareness of hydrogen, fuel cells, and
59.1 	related technologies; or 
59.2 	(6) reduce emissions of carbon dioxide and other pollutants.
59.3 		Subd. 2.Support for strategic demonstration projects
59.4 	that accelerate the commercialization of hydrogen, fuel cells,
59.5 	and related technologies. (a) In consultation with appropriate
59.6 	representatives from state agencies, local governments,
59.7 	universities, businesses, and other interested parties, the
59.8 	Department of Commerce shall report back to the legislature by
59.9 	November 1, 2005, and every two years thereafter, with a slate
59.10 	of proposed pilot projects that contribute to realizing
59.11 	Minnesota's hydrogen economy goal as set forth in section
59.12 	216B.013.  The Department of Commerce must consider the
59.13 	following nonexclusive list of priorities in developing the
59.14 	proposed slate of pilot projects:
59.15 	(1) demonstrate "bridge" technologies such as
59.16 	hybrid-electric, off-road, and fleet vehicles running on
59.17 	hydrogen or fuels blended with hydrogen;
59.18 	(2) develop cost-competitive, on-site hydrogen production
59.19 	technologies;
59.20 	(3) demonstrate nonvehicle applications for hydrogen;
59.21 	(4) improve the cost and efficiency of hydrogen from
59.22 	renewable energy sources; and 
59.23 	(5) improve the cost and efficiency of hydrogen production
59.24 	using direct solar energy without electricity generation as an
59.25 	intermediate step.
59.26 	(b) For all demonstrations, individual system components of
59.27 	the technology must meet commercial performance standards and
59.28 	systems modeling must be completed to predict commercial
59.29 	performance, risk, and synergies.  In addition, the proposed
59.30 	pilots should meet as many of the following criteria as possible:
59.31 	(1) advance energy security;
59.32 	(2) capitalize on the state's native resources;
59.33 	(3) result in economically competitive infrastructure being
59.34 	put in place;
59.35 	(4) be located where it will link well with existing and
59.36 	related projects and be accessible to the public, now or in the
60.1 	future;
60.2 	(5) demonstrate multiple, integrated aspects of hydrogen
60.3 	infrastructure;
60.4 	(6) include an explicit public education and awareness
60.5 	component;
60.6 	(7) be scalable to respond to changing circumstances and
60.7 	market demands;
60.8 	(8) draw on firms and expertise within the state where
60.9 	possible;
60.10 	(9) include an assessment of its economic, environmental,
60.11 	and social impact; and 
60.12 	(10) serve other needs beyond hydrogen development.
60.13 		Subd. 3.Establishing initial, multifuel transition
60.14 	infrastructure for hydrogen vehicles. The commissioner of
60.15 	commerce may accept federal funds, expend funds, and participate
60.16 	in projects to design, site, and construct multifuel hydrogen
60.17 	fueling stations that eventually link urban centers along key
60.18 	trade corridors across the jurisdictions of Manitoba, the
60.19 	Dakotas, Minnesota, Iowa, and Wisconsin.
60.20 	These energy stations must serve the priorities listed in
60.21 	subdivision 2 and, as transition infrastructure, should
60.22 	accommodate a wide variety of vehicle technologies and fueling
60.23 	platforms, including hybrid, flexible-fuel, and fuel cell
60.24 	vehicles.  They may offer, but not be limited to, gasoline,
60.25 	diesel, ethanol (E-85), biodiesel, and hydrogen, and may
60.26 	simultaneously test the integration of on-site combined heat and
60.27 	power technologies with the existing energy infrastructure.
60.28 	The hydrogen portion of the stations may initially serve
60.29 	local, dedicated on or off-road vehicles, but should eventually
60.30 	support long-haul transport.

60.31 	Sec. 3. [216B.815] AUTHORIZE AND ENCOURAGE THE STATE'S
60.32 	PUBLIC RESEARCH INSTITUTIONS TO COORDINATE AND LEVERAGE THEIR
60.33 	STRENGTHS THROUGH A REGIONAL ENERGY RESEARCH AND EDUCATION
60.34 	PARTNERSHIP.
60.35 	The state's public research and higher education
60.36 	institutions should work with one another and with similar
61.1 	institutions in the region to establish Minnesota and the Upper
61.2 	Midwest as a center of research, education, outreach, and
61.3 	technology transfer for the production of renewable energy and
61.4 	products, including hydrogen, fuel cells, and related
61.5 	technologies.  The partnership should be designed to create a
61.6 	critical mass of research and education capability that can
61.7 	compete effectively for federal and private investment in these
61.8 	areas.
61.9 	The partnership must include an advisory committee
61.10 	comprised of government, industry, academic, and nonprofit
61.11 	representatives to help focus its research and education efforts
61.12 	on the most critical issues.  Initiatives undertaken by the
61.13 	partnership may include:
61.14 	(1) collaborative and interdisciplinary research,
61.15 	demonstration projects, and commercialization of market-ready
61.16 	technologies;
61.17 	(2) creation of undergraduate and graduate course offerings
61.18 	and eventually degreed and vocational programs with reciprocity;
61.19 	(3) establishment of fellows programs at the region's
61.20 	institutes of higher learning that provide financial incentives
61.21 	for relevant study, research, and exchange; and 
61.22 	(4) development and field-testing of relevant curricula,
61.23 	teacher kits for all educational levels, and widespread teacher
61.24 	training, in collaboration with state energy offices, teachers,
61.25 	nonprofits, businesses, the United States Department of Energy,
61.26 	and other interested parties.

61.27 	Sec. 4. HYDROGEN REFUELING STATIONS; GRANTS.
 61.28 	The commissioner of commerce shall make assessments under
61.29 	Minnesota Statutes, section 216C.052, of $300,000 in fiscal year
61.30 	2006 and $300,000 in fiscal year 2007 for the purpose of
61.31 	matching federal and private investments in three multifuel
61.32 	hydrogen refueling stations in Moorhead, Alexandria, and the
61.33 	Twin Cities respectively.  The assessments are subject to the
61.34 	assessment caps specified in Minnesota Statutes, section
61.35 	216C.052.  Sums assessed under this section are appropriated to
61.36 	the commissioner of commerce for the purpose of this section.
62.1 	The assessments and grants are contingent upon securing the
62.2 	balance of the total project costs from nonstate sources.

62.3 	Sec. 5. FUEL CELL CURRICULUM DEVELOPMENT PILOT.
 62.4 	The Board of Trustees of the Minnesota State Colleges and
62.5 	Universities is encouraged to work with the Upper Midwest
62.6 	Hydrogen Initiative and other interested parties to develop and
62.7 	implement hydrogen and fuel cell curricula and training programs
62.8 	that can be incorporated into existing relevant courses and
62.9 	disciplines affected by these technologies.  These disciplines
62.10 	include, but are not limited to, chemical, electrical, and
62.11 	mechanical engineering, including lab technicians; fuel cell
62.12 	production, installation, and maintenance; fuel cell and
62.13 	internal combustion vehicles, including hybrids, running on
62.14 	hydrogen or biofuels; and the construction, installation, and
62.15 	maintenance of facilities that will produce, use, or serve
62.16 	hydrogen.  The curricula should also be useful to secondary
62.17 	educational institutions and should include, but not be limited
62.18 	to, the production, purification, distribution, and use of
62.19 	hydrogen in portable, stationary, and mobile applications and in
62.20 	fuel cells, turbines, and reciprocating engines.

62.21 	ARTICLE 14
62.22 	SOY-DIESEL

62.23 	Section 1. ALLOCATION; RENEWABLE DEVELOPMENT GRANT.
 62.24 	Notwithstanding any contrary provision of Minnesota
62.25 	Statutes, section 116C.779, $150,000 is allocated in fiscal year
62.26 	2006 to the Agricultural Utilization Research Institute from
62.27 	available funds in the renewable development account established
62.28 	under Minnesota Statutes, section 116C.779.  The institute shall
62.29 	disburse the money over three fiscal years as grants to an
62.30 	applicant meeting the requirements of Minnesota Statutes,
62.31 	section 216C.41, subdivision 1, paragraph (c), clause (2), item
62.32 	(i), for a project that uses a soy-diesel generator to provide
62.33 	backup power for a wind energy conversion system of one megawatt
62.34 	or less of nameplate capacity.  The institute shall disburse
62.35 	$50,000 of the grant in three consecutive fiscal years beginning
62.36 	July 1, 2005.
63.1 	For the purpose of this section, "soy-diesel" means a
63.2 	renewable, biodegradable, mono alkyl ester combustible liquid
63.3 	fuel derived from agricultural plant oils that meets American
63.4 	Society for Testing and Materials Specification D6751-02 for
63.5 	Biodiesel Fuel (B100) Blend Stock for Distillate Fuels.  This
63.6 	section only applies if the entity receives qualifying
63.7 	applications.

63.8 	ARTICLE 15
63.9 	BIODIESEL FUEL FOR HOME HEATING

63.10 	Section 1. STUDY; BIODIESEL FUEL FOR HOME HEATING.
 63.11 	(a) From the money available to the commissioner of
63.12 	commerce for purposes of studies and technical assistance by the
63.13 	reliability administrator under Minnesota Statutes, section
63.14 	216C.052, and in conformity with the goals and directives of
63.15 	Minnesota Statutes, section 16B.325, the reliability
63.16 	administrator shall perform a comprehensive technical and
63.17 	economic analysis of the benefits to be derived from using
63.18 	biodiesel fuel as defined in Minnesota Statutes, section 239.77,
63.19 	subdivision 1, or biodiesel fuel blends, as a home heating
63.20 	fuel.  The analysis must consider blends ranging from B2 to
63.21 	B100.  No more than $25,000 may be expended for the analysis.
63.22 	(b) Not later than March 15, 2007, the reliability
63.23 	administrator shall report the results of the study and analysis
63.24 	to the appropriate standing committees of the Minnesota senate
63.25 	and house of representatives.

63.26 	ARTICLE 16
63.27 	CITY OF ALEXANDRIA JOINT VENTURE AUTHORITY

63.28 	Section 1. Laws 2002, chapter 329, section 5, is amended
63.29 	to read:

63.30 	Sec. 5JOINT VENTURE AUTHORITY.
 63.31 	(a) The city of Alexandria may enter into a joint
63.32 	venture or joint ventures with one, two, or three of the
63.33 	entities known as Runestone Telephone Association and ,Runestone
63.34 	Electric Association, and Gardonville Telephone Cooperative for
63.35 	the purpose of providing local niche service, including internet
63.36 	services, and point to point transmission of digital information.
64.1 	(b) For purposes of this section, with respect to the
64.2 	services described in paragraph (a), the city of Alexandria and
64.3 	a joint venture to which it is a party shall have the rights and
64.4 	authority granted by, and be subject to, Minnesota Statutes 2001
64.5 	Supplement, section 452.25, except for the provisions of that
64.6 	section which relate specifically and only to electric utilities.
64.7 	(c) For the purposes of this section, "local niche service"
64.8 	refers to point-to-point connections between end-user locations
64.9 	within a service area and any telecommunications services under
64.10 	the public utilities commission's jurisdiction under Minnesota
64.11 	Statutes, chapter 237 that do not fall within the definition of
64.12 	local service or the definition of interexchange service.
64.13 	(d) If the city of Alexandria obtains authority to provide
64.14 	local service or interexchange service under chapter 237, it may
64.15 	enter into a joint venture with the entities identified in
64.16 	paragraph (a) for those purposes.
64.17 	[EFFECTIVE DATE; LOCAL APPROVAL.] This section is effective
64.18 	as to the city of Alexandria the day after the city of
64.19 	Alexandria's governing body and its chief clerical officer
64.20 	timely complete compliance with Minnesota Statutes, section
64.21 	645.021, subdivisions 2 and 3.