1.1 	A bill for an act
1.2 	relating to the environment; requiring disclosure regarding disposal of fluorescent 
1.3 	lamps containing mercury; requiring mercury emissions reductions by public 
1.4 	utilities; amending Minnesota Statutes 2004, sections 116.92, by adding a 
1.5 	subdivision; 216B.1692, subdivision 8; proposing coding for new law in 
1.6 	Minnesota Statutes, chapter 216B.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. TITLE.
 1.9 	This act may be cited as the Mercury Emissions Reduction Act of 2006.

1.10 	Sec. 2. Minnesota Statutes 2004, section 116.92, is amended by adding a subdivision to 
1.11 	read:
1.12 		Subd. 7a.Fluorescent lamps; residential applications. Any information regarding 
1.13 	fluorescent lamps containing mercury that is sent by a utility to a customer, present on 
1.14 	a utility's Web site or contained in a utility's print, radio, or video advertisement, must 
1.15 	state that the lamps contain mercury that is harmful to the environment and that it is illegal 
1.16 	to place them in garbage and must provide a toll-free telephone number or Web site that 
1.17 	customers can access to learn how to lawfully dispose of the lamps.

1.18 	EFFECTIVE DATE. This section is effective October 1, 2006. 

1.19 	Sec. 3. [216B.105] CUSTOMER SHARE OF MERCURY CONTROL COSTS.
1.20 	A utility selling electricity at retail shall report on each customer's monthly bill the 
1.21 	amount of the customer's total bill that represents the utility's capital and operating costs 
1.22 	to control mercury emissions to the atmosphere as required under sections 216B.681 
1.23 	to 216B.687. 

2.1 	EFFECTIVE DATE. This section is effective the day following final enactment.

2.2 	Sec. 4. Minnesota Statutes 2004, section 216B.1692, subdivision 8, is amended to read:
2.3 		Subd. 8.Sunset. This section is effective until June 30, 2006 June 30, 2012, and 
2.4 	applies to projects and riders approved prior to that date.

2.5 	Sec. 5. [216B.68] DEFINITIONS, MERCURY EMISSIONS REDUCTIONS.
2.6 		Subdivision 1.Scope. Terms used in sections 216B.68 to 216B.688 have the 
2.7 	meanings given them in this section and section 216B.02.
2.8 		Subd. 2.Qualifying facility. "Qualifying facility" means an electric generating 
2.9 	power plant in Minnesota that, as of January 1, 2006, had a total net dependable capacity 
2.10 	in excess of 750 megawatts from all coal-fired electric generating units at the power plant.
2.11 		Subd. 3.Targeted unit. "Targeted unit" means a coal-fired electric generation unit 
2.12 	greater than 300 megawatts at a qualifying facility.
2.13 		Subd. 4.Agency. "Agency" means the Minnesota Pollution Control Agency.
2.14 		Subd. 5.Federal mercury regulations. "Federal mercury regulations" means 
2.15 	the federal clean air mercury rule as of January 1, 2006, published in Code of Federal 
2.16 	Regulations, title 40, parts 60, 63, 70, and 72.
2.17 		Subd. 6.Reduction. "Reduction" means the capture of total mercury emissions 
2.18 	from a qualifying facility relative to the emissions baseline from that facility established 
2.19 	under section 216B.681, expressed as a percentage.
2.20 		Subd. 7.Dry scrubbed units. "Dry scrubbed units" means a targeted unit at which 
2.21 	pollution control technology that uses a spray dryer and fabric filter system to remove 
2.22 	pollutants from air emissions is installed.
2.23 		Subd. 8.Wet scrubbed units. "Web scrubbed units" means a targeted unit at which 
2.24 	pollution control technology that uses water or solutions to remove pollutants from air 
2.25 	emissions is installed.
2.26 		Subd. 9.Startup period. "Startup period" means a period of one year after the date 
2.27 	of compliance set forth in section 216B.682, paragraph (a), or such longer period as the 
2.28 	commission may approve after consultation with the Pollution Control Agency.

2.29 	Sec. 6. [216B.681] MONITORING MERCURY EMISSIONS.
2.30 	By July 1, 2007, a public utility that owns or operates a qualifying facility shall 
2.31 	install, maintain, and operate continuous mercury emissions monitoring systems on 
2.32 	coal-fired electric generation units that the utility may include in a mercury emissions 
2.33 	reduction plan under section 216B.682. The monitoring systems must use methods 
3.1 	set forth in federal mercury regulations or other methods as may be approved by the 
3.2 	agency. The data from monitoring systems or other methods of measurement approved 
3.3 	by the agency associated with a utility's qualifying facilities must be used to establish a 
3.4 	baseline for mercury emissions reductions under section 216B.682. The public utility shall 
3.5 	report to the agency the quality assured and controlled data produced from the systems 
3.6 	implemented pursuant to this section on a quarterly basis thereafter.

3.7 	Sec. 7. [216B.682] MERCURY EMISSIONS REDUCTION PLANS.
3.8 	(a) By December 31, 2007, for dry scrubbed units and by December 31, 2009, for 
3.9 	wet scrubbed units, a public utility that owns or operates a qualifying facility shall develop 
3.10 	and submit to the Pollution Control Agency and the Public Utilities Commission plans to 
3.11 	reduce mercury emissions in this state. A public utility filing a plan for a wet scrubbed 
3.12 	unit on or before December 31, 2007, may file a plan for any other wet scrubbed unit at 
3.13 	its qualifying facility by July 1, 2011. Mercury emissions reduction initiatives must be 
3.14 	implemented by December 31, 2010, at dry scrubbed units, and by December 31, 2015, at 
3.15 	wet scrubbed units.
3.16 	(b) A public utility must file a set of plans under paragraph (a) that, taken together, 
3.17 	are designed to achieve total mercury reductions among the utility's Minnesota facilities 
3.18 	equivalent to a goal of 90 percent reduction of mercury emissions at the utility's targeted 
3.19 	units by December 31, 2015.
3.20 	(c) The utility may also submit one or more alternatives to the plans required under 
3.21 	paragraph (b). The alternatives must be designed to achieve mercury emissions reductions 
3.22 	at its qualifying facilities greater and earlier than required under federal mercury 
3.23 	regulations. The utility shall also provide information as to how the utility would have 
3.24 	planned to meet federal mercury reduction requirements in the absence of this legislation 
3.25 	and the estimated cost and timing of meeting federal mercury reduction requirements.
3.26 	(d) For each required and alternative plan submitted pursuant to this subdivision, 
3.27 	the utility shall present information assessing that plan's ability to optimize human health 
3.28 	benefits and achieve cost efficiencies. The utility shall assess how each plan balances 
3.29 	environmental benefits with the associated costs, considering the impact of the resulting 
3.30 	electricity costs on both the utility's customers and the state's economy. Plans must 
3.31 	provide the cost, technical feasibility, and mercury emissions reduction expected for each 
3.32 	option. Plans may also provide measures to reduce the cost and maximize the flexibility of 
3.33 	each option, including, but not limited to, mercury emissions reductions achieved through 
3.34 	pretreatment of the coal burned at the facility, averaging mercury emissions reductions 
3.35 	among different generating units at the same plant and achieving equivalent mercury 
4.1 	emissions reductions on other plants in the public utility's electric system in Minnesota. 
4.2 	The plans may specify permit targets or conditions proposed by the public utility for each 
4.3 	mercury emissions control option, including, but not limited to, numeric emission targets, 
4.4 	percent removal expectations, emission control technology installation and operative 
4.5 	requirements, or work practice standards.
4.6 	(e) Mercury emissions reductions under a plan approved by the commission under 
4.7 	section 216B.1692 before January 1, 2006, may not be counted toward total mercury 
4.8 	emissions reductions of a plan under this section.

4.9 	Sec. 8. [216B.683] OTHER ENVIRONMENTAL IMPROVEMENT PLANS.
4.10 	In order to encourage a utility to address multiple pollutants, a utility required to 
4.11 	submit mercury reduction plans under sections 216B.68 to 216B.688 may also propose 
4.12 	plans and associated emission reduction riders addressing investments in additional 
4.13 	pollution control equipment and related expenses needed to comply with state or federal 
4.14 	statute or regulation that became effective after December 31, 2004. The plans may 
4.15 	propose to implement emission control initiatives that exceed or are implemented in 
4.16 	advance of state or federal requirements. The utility must show that plans submitted 
4.17 	under this subdivision and any related riders are the least-cost alternative for complying 
4.18 	with state and federal regulations.

4.19 	Sec. 9. [216B.684] EMISSIONS REDUCTION RIDERS. 
4.20 	(a) A public utility required to file a mercury emissions reduction plan under section 
4.21 	216B.682 may also file for approval of an emissions reduction rate rider pursuant to 
4.22 	section 216B.1692, subdivision 3, for its mercury control and other environmental 
4.23 	improvement initiatives under sections 216B.68 to 216B.688. The emissions reduction 
4.24 	rate rider may include recovery of costs associated with the installation of continuous 
4.25 	mercury emission monitoring systems, any project costs incurred prior to plan approval 
4.26 	that are demonstrated to the commission's satisfaction to be part of the plan, ongoing 
4.27 	operation and maintenance costs associated with the utility's mercury control initiatives, 
4.28 	and any studies undertaken by the utility in support of the mercury emissions reduction 
4.29 	plan required under section 216B.682, in addition to the cost recovery provided by 
4.30 	sections 216B.1692, subdivision 3. The utility may propose to phase in the emissions 
4.31 	reduction riders to recover these costs over the development and life of the projects.
4.32 	(b) Each mercury emissions reduction rider approved by the commission must 
4.33 	include performance-based financial incentives to encourage the utility to exceed the 90 
4.34 	percent mercury emissions reductions required in the plan filed under section 216B.682. 
5.1 	These incentives may include increased returns on investments or other performance-based 
5.2 	incentives. The commission shall structure the financial incentives to escalate for each 
5.3 	additional increment of mercury emissions reductions achieved by the utility above the 90 
5.4 	percent mercury emissions reductions required in the plan filed under section 216B.682.

5.5 	Sec. 10. [216B.685] ENVIRONMENTAL ASSESSMENT.
5.6 	The Pollution Control Agency shall evaluate a utility's mercury emissions reduction 
5.7 	plans and alternatives filed under sections 216B.68 to 216B.688, and submit its evaluation 
5.8 	to the Public Utilities Commission within 180 days of the date the plan is filed with the 
5.9 	agency and commission under subdivision 3. In its review, the agency shall:
5.10 	(1) assess whether the utility's plan under section 216B.682, paragraph (b), meets 
5.11 	the requirements of that paragraph; 
5.12 	(2) evaluate the environmental and public health benefits of each plan submitted 
5.13 	under section 216B.682, including benefits associated with reductions in pollutants other 
5.14 	than mercury; 
5.15 	(3) assess the technical feasibility and cost-effectiveness of technologies proposed 
5.16 	for achieving mercury emissions reduction in each plan submitted; and
5.17 	(4) advise the commission of the appropriateness of each plan.

5.18 	Sec. 11. [216B.686] COMMISSION APPROVAL.
5.19 	(a) The Public Utilities Commission shall review and evaluate a utility's mercury 
5.20 	emissions reduction plans submitted under this section. In its review, the commission 
5.21 	shall consider the environmental and public health benefits, the agency's assessment of a 
5.22 	technology's technical feasibility, competitiveness of customer rates and power supply 
5.23 	costs, and cost-effectiveness of the utility's proposed mercury control initiatives in light 
5.24 	of the agency's report under section 216B.685. For multi-emissions reduction plans, the 
5.25 	commission shall consider the overall environmental and public health benefits, total 
5.26 	costs, and competitiveness of customer rates and power supply costs.
5.27 	Within 180 days of receiving the agency's report, the commission shall approve a 
5.28 	utility's mercury or multi-emissions reduction plans that the commission reasonably 
5.29 	expects  will be technically able to achieve, by December 31, 2015, substantial mercury 
5.30 	emissions reductions and associated environmental and health benefits among the utility's 
5.31 	Minnesota facilities in a manner that does not impose excessive consumer and power 
5.32 	supply costs. In approving the plans, the commission shall  achieve the greatest level of 
5.33 	mercury reduction that can be obtained without imposing excessive costs on ratepayers.
6.1 	 If the commission is unable to approve the utility's 90 percent reduction plan 
6.2 	submitted under section 216B.682, paragraph (b), the commission shall, in consultation 
6.3 	with the agency, order the utility to implement the most stringent mercury control 
6.4 	alternatives proposed by the utility under section 216B.682, paragraph (c), that will 
6.5 	achieve the maximum mercury emissions reductions technically feasible and protective of 
6.6 	the public health and environment without imposing excessive consumer  costs.
6.7 	(b) The commission shall review and evaluate a utility's plan and associated 
6.8 	emissions reduction rider for other environmental improvement initiatives submitted 
6.9 	under section 216B.683.  Within 180 days of receiving the agency's report prepared under 
6.10 	section 216B.1692, the commission shall approve the plan and associated emissions 
6.11 	reduction rider if it complies with applicable state and federal regulations and is the 
6.12 	least-cost alternative.
6.13 	(c) Section 216B.1692 applies to plans and emissions control riders proposed under 
6.14 	sections 216B.68 to 216B.688, except that projects included in a plan approved under 
6.15 	those sections are deemed to be qualifying projects for the purposes of section 216B.1692; 
6.16 	and section 216B.1692, subdivision 5, paragraph (c), and subdivision 6, do not apply to 
6.17 	plans or riders submitted under sections 216B.68 to 216B.688. Commission approval of 
6.18 	an emissions reduction plan under sections 216B.68 to 216B.688 includes approval of an 
6.19 	emissions reduction rider associated with that plan, if one was submitted by the utility. 
6.20 	Nothing in sections 216B.68 to 216B.688 requires a utility to convert a wet scrubbed unit 
6.21 	into a dry scrubbed unit as part of an emissions reduction plan.

6.22 	Sec. 12. [216B.687] IMPLEMENTATION AND OPERATION.
6.23 	(a) A public utility required to file a mercury emissions reduction plan under 
6.24 	section 216B.682 shall implement the plan as approved by the commission under section 
6.25 	216B.685.
6.26 	(b) During the startup period, except as required by federal regulation, any mercury 
6.27 	emission reduction incorporated into a qualifying facility's permit as established under 
6.28 	the plan is a state-only condition of the permit and is not subject to enforcement by the 
6.29 	agency. If, after the startup period ends, it is determined that the qualifying facility is 
6.30 	able to comply with the mercury emissions reduction, the agency shall incorporate the 
6.31 	mercury reduction into the facility's permit as an enforceable state-only condition. If, 
6.32 	after the startup period, despite the utility's reasonable best efforts consistent with the 
6.33 	approved plan, the equipment installed at a unit under an approved plan fails to achieve 
6.34 	the mercury reduction expected in the approved plan, the agency shall revise the  permit 
6.35 	for the qualifying facility to reflect the actual mercury emissions expected from the unit 
7.1 	and incorporate that mercury emissions reduction as an enforceable state-only condition 
7.2 	in the facility's permit. The utility shall report periodically to the agency of its efforts to 
7.3 	optimize the operation of installed equipment, and the agency shall revise the unit's air 
7.4 	permit within five years of initial operation, to ensure optimal operation of equipment 
7.5 	installed under a plan approved pursuant to sections 216B.68 to 216B.688.
7.6 	(c) For qualifying facilities using both dry scrubbed and wet scrubbed units, the 
7.7 	agency may establish permit limits as set forth in paragraph (b) for each individual 
7.8 	unit. After the startup periods for all units at the qualifying facility have concluded and 
7.9 	the actual mercury emissions for the units expected under the approved plan have been 
7.10 	determined, the agency may establish a single enforceable state-only mercury emission 
7.11 	limit for the qualifying facility covering all units at that facility.

7.12 	Sec. 13. [216B.688] RELATIONSHIP TO STATE AND FEDERAL 
7.13 	REGULATIONS.
7.14 	Mercury emissions reduction equipment installed under this section fulfills all 
7.15 	applicable requirements related to mercury emissions from a qualifying facility, including 
7.16 	but not limited to any mercury-related requirements related to total maximum daily 
7.17 	loads under the federal Clean Water Act. Except as otherwise provided in this section, a 
7.18 	targeted unit implementing a mercury emissions reduction plan under sections 216B.68 to 
7.19 	216B.688 shall not be required to undertake additional investments to reduce mercury by 
7.20 	state law or regulation. The agency shall implement requirements of federal law in the 
7.21 	most flexible manner approved by the United States Environmental Protection Agency.