1.1 	A bill for an act
1.2 	relating to energy; modifying sustainable building guidelines relating to 
1.3 	greenhouse gases and extending assessments of energy utilities; requiring 
1.4 	reports on utility customers; authorizing prepurchase propane fuel program; 
1.5 	providing for residential heat reconnection arrangements; modifying provisions 
1.6 	for assisting low-income residential heating customers; modifying renewable 
1.7 	energy standards and objectives; defining "gross operating revenue" for 
1.8 	energy conservation investment; providing for statewide energy-saving 
1.9 	objectives; modifying renewable wind energy production incentive payment 
1.10 	periods; establishing Minnesota Renewable Hydrogen Initiative and requiring 
1.11 	development of standards; defining "energy conservation investments" to 
1.12 	include renewable energy measures; clarifying status of biomass generation 
1.13 	facility; authorizing petroleum violation escrow funds to be used for energy 
1.14 	grants; establishing plug-in hybrid electric vehicle project and task force; 
1.15 	requiring a study;amending Minnesota Statutes 2004, sections 16B.325; 
1.16 	216B.16, subdivision 15; 216B.1691; 216B.241, subdivisions 1a, 1c, 6; 216C.37, 
1.17 	subdivision 1; 216C.41, subdivision 4; Minnesota Statutes 2005 Supplement, 
1.18 	sections 216B.241, subdivisions 1b, 2; 216C.052, subdivisions 3, 4; 216C.41, 
1.19 	subdivision 3;  Laws 2005, chapter 97, article 13, section 4; proposing coding for 
1.20 	new law in Minnesota Statutes, chapters 216B; 325E.
1.21 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.22 	Section 1. Minnesota Statutes 2004, section 16B.325, is amended to read:
1.23 	16B.325 SUSTAINABLE BUILDING GUIDELINES.
1.24 		Subdivision 1. Energy, lighting, air quality, and other guidelines. The Department 
1.25 	of Administration and the Department of Commerce, with the assistance of other agencies, 
1.26 	shall develop sustainable building design guidelines for all new state buildings by January 
1.27 	15, 2003. The primary objectives of these guidelines are to ensure that all new state 
1.28 	buildings initially exceed existing energy code, as established in Minnesota Rules, chapter 
1.29 	7676, by at least 30 percent. The guidelines must focus on achieving the lowest possible 
1.30 	lifetime cost for new buildings and allow for changes in the guidelines that encourage 
2.1 	continual energy conservation improvements in new buildings. The design guidelines 
2.2 	must establish sustainability guidelines that include air quality and lighting standards and 
2.3 	that create and maintain a healthy environment and facilitate productivity improvements; 
2.4 	specify ways to reduce material costs; and must consider the long-term operating costs of 
2.5 	the building, including the use of renewable energy sources and distributed electric energy 
2.6 	generation that uses a renewable source or natural gas or a fuel that is as clean or cleaner 
2.7 	than natural gas. In developing the guidelines, the departments shall use an open process, 
2.8 	including providing the opportunity for public comment. The guidelines established under 
2.9 	this sectionsubdivision are mandatory for all new buildings receiving funding from the 
2.10 	bond proceeds fund after January 1, 2004.
2.11 		Subd. 2.Greenhouse gases. The Department of Administration and the Department 
2.12 	of Commerce, with the assistance of other agencies, shall report to the legislature by 
2.13 	March 15, 2007, on guidelines and procedures for a requirement that no net increases 
2.14 	in greenhouse gases are allowed as a result of new building projects. The guidelines 
2.15 	established under this subdivision are mandatory for all new buildings receiving funding 
2.16 	from the bond proceeds fund after January 1, 2008.

2.17 	Sec. 2. [216B.091] UTILITY CUSTOMER.
2.18 		Subdivision 1.Monthly reports. (a) Each natural gas and electric public utility 
2.19 	must submit a monthly report to the commission that includes the following information:
2.20 	(1) number of residential customers;
2.21 	(2) total number and dollar amount of residential customer accounts past due;
2.22 	(3) average residential customer past due amount;
2.23 	(4) total dollars received from the low-income home energy assistance program 
2.24 	and from other sources;
2.25 	(5) average monthly residential bill;
2.26 	(6) revenue from sales to residential accounts;
2.27 	(7) total residential write-offs due to uncollectible bills;
2.28 	(8) number of disconnection notices mailed to customers;
2.29 	(9) number of residential accounts disconnected; and
2.30 	(10) number of residential primary heating accounts reconnected to service.
2.31 	(b) During the period from October 15 to April 15, monthly reports must also 
2.32 	include the following information:
2.33 	(1) number of cold weather protection requests;
2.34 	(2) number of reconnection plan requests received and granted;
2.35 	(3) number of inability to pay requests received and granted;
3.1 	(4) number of ten-percent plans received and granted;
3.2 	(5) number of payment schedule requests received and granted; and 
3.3 	(6) all other information currently provided to the commission in monthly cold 
3.4 	weather rule reports.
3.5 		Subd. 2.Commission report. On or about September 30 of each year, the 
3.6 	commission must issue a report that summarizes the monthly data provided under 
3.7 	subdivision 1 by each natural gas and electric public utility for the period beginning 
3.8 	July 1 to the following June 30 of that year.

3.9 	EFFECTIVE DATE. This section is effective July 1, 2006, provided that the first 
3.10 	report under subdivision 2 is due on or about September 30, 2007.

3.11 	Sec. 3. [216B.0951] PREPURCHASE PROPANE FUEL PROGRAM.
3.12 		Subdivision 1.Created. The commissioner shall operate, or contract to operate, a 
3.13 	prepurchase delivered fuel program.
3.14 	The commissioner shall each July and August purchase the lesser of one-third of the 
3.15 	liquid propane fuel consumed by low-income home energy assistance program recipients 
3.16 	during the previous heating season or the amount that can be purchased with available 
3.17 	funds. The prepurchase delivered fuel program must be available statewide through each 
3.18 	local agency that administers the energy assistance program. The commissioner may 
3.19 	decide to limit or not engage in prepurchasing if the commissioner finds that there is a 
3.20 	reasonable likelihood that prepurchasing will not provide fuel-cost savings.
3.21 		Subd. 2.Hedge account. The commissioner may establish a hedge account with 
3.22 	realized program savings due to prepurchasing. The account must be used to compensate 
3.23 	program recipients an amount up to the difference in cost for fuel provided to the recipient 
3.24 	if winter-delivered fuel prices are lower than the prepurchase or summer-fill price. No 
3.25 	more than ten percent of the aggregate prepurchase program savings may be used to 
3.26 	establish the hedge account. 
3.27 		Subd. 3.Report. The department shall issue an annual report, made available 
3.28 	electronically on its Web site and in print upon request, which contains the following 
3.29 	information:
3.30 	(1) the cost per gallon of the prepurchased fuel;
3.31 	(2) the total gallons of fuel prepurchased;
3.32 	(3) the average cost of propane and fuel oil by month between October and the 
3.33 	following April;
3.34 	(4) the number of energy assistance program households receiving prepurchased 
3.35 	fuel; and 
4.1 	(5) the average savings accruing or benefit increase provided to energy assistance 
4.2 	households.

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

4.4 	Sec. 4. [216B.096] EARLY IDENTIFICATION OF HEAT-DISCONNECTED 
4.5 	CUSTOMERS.
4.6 		Subdivision 1.Definitions. For the purposes of this section, the terms defined in this 
4.7 	subdivision have the meanings given them:
4.8 	(a) "Heat-affected customer" means a residential customer heating with electricity 
4.9 	or natural gas.
4.10 	(b) "Heating season" means the period between October 15 and the following 
4.11 	April 15.
4.12 	(c) "Utility" means a public utility serving residential customers who heat with 
4.13 	electricity or natural gas.
4.14 		Subd. 2.Early identification. Beginning no later than September 15, a utility 
4.15 	must attempt to contact heat-affected customers in occupied dwellings whose service 
4.16 	was disconnected after the previous heating season to establish payment arrangements 
4.17 	or a reconnection plan in order to restore service. A record must be made of all contacts 
4.18 	and attempted contacts.
4.19 		Subd. 3.Report to commission. Annually on November 1, a utility must file with 
4.20 	the commission a report specifying the number of heat-affected customers in occupied 
4.21 	dwellings whose service is disconnected on October 1 and on October 15. If heat-affected 
4.22 	customers remain disconnected on October 15, each utility shall file a weekly report, 
4.23 	beginning November 1, specifying the number of heat-affected customers that are or 
4.24 	remain disconnected from service during the current heating season.

4.25 	Sec. 5. Minnesota Statutes 2004, section 216B.16, subdivision 15, is amended to read:
4.26 		Subd. 15.Low-income programs. (a) The commission may consider ability to 
4.27 	pay as a factor in setting utility rates and may must establish programs for low-income 
4.28 	residential ratepayers in order to ensure affordable, reliable, and continuous service 
4.29 	to low-income utility customers. By September 1, 2006, public utilities that serve 
4.30 	low-income natural gas heating customers must file an affordability program with the 
4.31 	commission. A program must be implemented upon approval by the commission.
4.32 	(b) The purpose of the low-income programs is to lower the percentage of income 
4.33 	that participating low-income households devote to energy bills, to increase participating 
4.34 	customer payments, to decrease or eliminate participating customer arrears, and to lower 
5.1 	the utility costs associated with participating customer account collection activities. 
5.2 	In ordering low-income programs, the commission may require public utilities to file 
5.3 	program evaluations, including the coordination of other available low-income bill 
5.4 	payment and conservation resources and the effect of the program on:
5.5 	(1) reducing the percentage of income that participating households devote to energy 
5.6 	bills;
5.7 	(2) service disconnections; and
5.8 	(3) customer payment behavior, utility collection costs, arrearages, and bad debt.
5.9 	(c) The commission shall issue orders necessary to implement, administer, and 
5.10 	recover the costs, including administrative costs, of a program on a timely basis.

5.11 	Sec. 6.  Minnesota Statutes 2004, section 216B.1691, is amended to read:
5.12 	 216B.1691 RENEWABLE ENERGY STANDARDS AND OBJECTIVES.
5.13 		 Subdivision 1.Definitions. (a) Unless otherwise specified in law, "eligible energy 
5.14 	technology" means an energy technology that:
5.15 	 (1) generates electricity from the following renewable energy sources:  solar; wind; 
5.16 	hydroelectric with a capacity of less than 60 100 megawatts; hydrogen, provided that 
5.17 	after January 1, 2010, the hydrogen must be generated from the resources listed in this 
5.18 	clause; or biomass, which includes an energy recovery facility used to capture the heat 
5.19 	value of mixed municipal solid waste or refuse-derived fuel from mixed municipal solid 
5.20 	waste as a primary fuel; and
5.21 	 (2) was not mandated by Laws 1994, chapter 641, or by commission order issued 
5.22 	pursuant to that chapter prior to August 1, 2001.
5.23 	 (b) "Electric utility" means a public utility providing electric service, a generation 
5.24 	and transmission cooperative electric association, or a municipal power agency.
5.25 	 (c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year 
5.26 	by an electric utility to retail customers of the electric utility or to a distribution utility for 
5.27 	distribution to the retail customers of the distribution utility.
5.28 		 Subd. 2.Eligible energy objectives. (a) Each electric utility shall make a good 
5.29 	faith effort to generate or procure sufficient electricity generated by an eligible energy 
5.30 	technology to provide its retail consumers, or the retail customers of a distribution utility 
5.31 	to which the electric utility provides wholesale electric service, so that:
5.32 	 (1) commencing in 2005, at least one percent of the electric utility's total retail 
5.33 	electric sales is generated by eligible energy technologies;
5.34 	 (2) the amount provided under clause (1) is increased by one percent of the utility's 
5.35 	total retail electric sales each year until 2015 2010; and
6.1 	 (3) ten five percent of the electric energy provided to retail customers in Minnesota 
6.2 	by 2010 is generated by eligible energy technologies.
6.3 	 (b) Of the eligible energy technology generation required under paragraph (a), 
6.4 	clauses (1) and (2), not less than 0.5 percent of the energy must be generated by biomass 
6.5 	energy technologies, including an energy recovery facility used to capture the heat value 
6.6 	of mixed municipal solid waste or refuse-derived fuel from mixed municipal solid waste 
6.7 	as a primary fuel, by 2005.  By 2010, one percent of the eligible technology generation 
6.8 	required under paragraph (a), clauses (1) and (2), shall be generated by biomass energy 
6.9 	technologies.  An energy recovery facility used to capture the heat value of mixed 
6.10 	municipal solid waste or refuse-derived fuel from mixed municipal solid waste, with a 
6.11 	power sales agreement in effect as of May 29, 2003, that terminates after December 31, 
6.12 	2010, does not qualify as an eligible energy technology unless the agreement provides for 
6.13 	rate adjustment in the event the facility qualifies as a renewable energy source.
6.14 		Subd. 2a.Eligible energy standard. Each electric utility shall generate or procure 
6.15 	sufficient electricity generated by an eligible energy technology to provide its retail 
6.16 	customers, or the retail customers of a distribution utility to which the electric utility 
6.17 	provides wholesale electric service, so that at least the following percentages of the 
6.18 	electric utility's total retail electric sales is generated by eligible energy technologies 
6.19 	by the end of the year indicated:

6.20	 (1) 
	2013 
	ten percent 
	
6.21	 (2) 
	2015 
	15 percent 
	
6.22	 (3) 
	2020 
	20 percent 
	
6.23 	To be counted toward satisfying the standard, energy, other than energy generated 
6.24 	within the state by an eligible energy technology using hydroelectric or biomass as an 
6.25 	energy source, must be generated by a facility originally placed in service after January 1, 
6.26 	1975.  The commission must delay or modify the standard for an electric utility if it finds 
6.27 	that compliance with a standard is not in the public interest because compliance will either 
6.28 	produce undesirable impacts on the reliability of the utility's system or on the utility's 
6.29 	ratepayers or if it finds that compliance is not technically feasible.  The standard is both 
6.30 	an individual electric utility standard and a statewide standard so that by the end of 2020 
6.31 	at least 20 percent of the electric energy provided to retail customers in Minnesota is 
6.32 	generated by eligible energy technologies.
6.33 		 (c) Subd. 2b.Commission order.  By June 1, 2004, and as needed thereafter, the 
6.34 	commission shall issue an order detailing the criteria and standards by which it will 
6.35 	measure an electric utility's efforts to meet the renewable energy objectives and standards 
7.1 	of this section to determine whether the utility is making the required good faith effort 
7.2 	and is meeting the standards.  In this order, the commission shall include criteria and 
7.3 	standards that protect against undesirable impacts on the reliability of the utility's system 
7.4 	and economic impacts on the utility's ratepayers and that consider technical feasibility.
7.5 	 (d) In its order under paragraph (c), the commission shall provide for a weighted 
7.6 	scale of how energy produced by various eligible energy technologies shall count toward a 
7.7 	utility's objective.  In establishing this scale, the commission shall consider the attributes 
7.8 	of various technologies and fuels, and shall establish a system that grants multiple credits 
7.9 	toward the objectives for those technologies and fuels the commission determines is in 
7.10 	the public interest to encourage.
7.11 		 Subd. 3.Utility plans filed with commission. (a) Each electric utility shall report 
7.12 	on its plans, activities, and progress with regard to these objectives and standards in its 
7.13 	filings under section 216B.2422 or in a separate report submitted to the commission every 
7.14 	two years, whichever is more frequent, demonstrating to the commission that the utility is 
7.15 	making the required good faith utility's effort to comply with this section.  In its resource 
7.16 	plan or a separate report, each electric utility shall provide a description of:
7.17 	 (1) the status of the utility's renewable energy mix relative to the good faith 
7.18 	objective and standards;
7.19 	 (2) efforts taken to meet the objective and standards;
7.20 	 (3) any obstacles encountered or anticipated in meeting the objective or standards; 
7.21 	and
7.22 	 (4) potential solutions to the obstacles.
7.23 	 (b) The commissioner shall compile the information provided to the commission 
7.24 	under paragraph (a), and report to the chairs of the house of representatives and senate 
7.25 	committees with jurisdiction over energy and environment policy issues as to the progress 
7.26 	of utilities in the state in increasing the amount of renewable energy provided to retail 
7.27 	customers, with any recommendations for regulatory or legislative action, by January 
7.28 	15 of each odd-numbered year.
7.29 		 Subd. 4.Renewable energy credits. (a) To facilitate compliance with this section, 
7.30 	the commission, by rule or order, may establish a program for tradable credits for 
7.31 	electricity generated by an eligible energy technology.  In doing so, the commission shall 
7.32 	implement a system that constrains or limits the cost of credits, taking care to ensure that 
7.33 	such a system does not undermine the market for those credits.
7.34 	 (b) In lieu of generating or procuring energy directly to satisfy the renewable energy 
7.35 	objective and standard of this section, an electric utility may purchase sufficient renewable 
7.36 	energy credits, issued pursuant to this subdivision, to meet its objective and standard.
8.1 	 (c) Upon the passage of a renewable energy standard, portfolio, or objective in 
8.2 	a bordering state that includes a similar definition of eligible energy technology or 
8.3 	renewable energy, the commission may facilitate the trading of renewable energy credits 
8.4 	between states.
8.5 		 Subd. 5.Technology based on fuel combustion. (a) Electricity produced by fuel 
8.6 	combustion may only count toward a utility's objectives or standards if the generation 
8.7 	facility:
8.8 	 (1) was constructed in compliance with new source performance standards 
8.9 	promulgated under the federal Clean Air Act for a generation facility of that type; or
8.10 	 (2) employs the maximum achievable or best available control technology available 
8.11 	for a generation facility of that type.
8.12 	 (b) An eligible energy technology may blend or co-fire a fuel listed in subdivision 1, 
8.13 	paragraph (a), clause (1), with other fuels in the generation facility, but only the percentage 
8.14 	of electricity that is attributable to a fuel listed in that clause can be counted toward an 
8.15 	electric utility's renewable energy objectives.
8.16 		 Subd. 6.Electric utility that owns nuclear generation facility. (a) An electric 
8.17 	utility that owns a nuclear generation facility, as part of its good faith effort under this 
8.18 	subdivision and subdivision 2, shall deploy an additional 300 megawatts of nameplate 
8.19 	capacity of wind energy conversion systems by 2010, beyond the amount of wind energy 
8.20 	capacity to which the utility is required by law or commission order as of May 1, 2003.  
8.21 	At least 100 megawatts of this capacity are to be wind energy conversion systems of two 
8.22 	megawatts or less, which shall not be eligible for the production incentive under section 
8.23 	216C.41.  To the greatest extent technically feasible and economic, these 300 megawatts 
8.24 	of wind energy capacity are to be distributed geographically throughout the state.  The 
8.25 	utility may opt to own, construct, and operate up to 100 megawatts of this wind energy 
8.26 	capacity, except that the utility may not own, construct, or operate any of the facilities 
8.27 	that are under two megawatts of nameplate capacity.  The deployment of the wind energy 
8.28 	capacity under this subdivision must be consistent with the outcome of the engineering 
8.29 	study required under Laws 2003, First Special Session chapter 11, article 2, section 21.
8.30 	 (b) The renewable energy objective set forth in subdivision 2 shall be a requirement 
8.31 	for the public utility that owns the Prairie Island nuclear generation plant.  The objective is 
8.32 	a requirement subject to resource planning and least-cost planning requirements in section 
8.33 	216B.2422, unless implementation of the objective can reasonably be shown to jeopardize 
8.34 	the reliability of the electric system.  The least-cost planning analysis must include the 
8.35 	costs of ancillary services and other necessary generation and transmission upgrades.
9.1 	 (c) Also as part of its good faith effort under this section, the utility that owns a 
9.2 	nuclear generation facility is to enter into a power purchase agreement by January 1, 2004, 
9.3 	for ten to 20 megawatts of biomass energy and capacity at an all-inclusive price not to 
9.4 	exceed $55 per megawatt-hour, for a project described in section 216B.2424, subdivision 
9.5 	5, paragraph (e), clause (2).  The project must be operational and producing energy by 
9.6 	June 30, 2005.
9.7 		Subd. 7.Compliance. The commission, on its own motion or upon petition, may 
9.8 	investigate whether an electric utility is in compliance with its standard obligation under 
9.9 	subdivision 2a and if it finds noncompliance may order the electric utility to construct 
9.10 	facilities or purchase credits to achieve compliance. If an electric utility fails to comply 
9.11 	with an order under this subdivision, the commission may impose a financial penalty on 
9.12 	the electric utility in an amount up to the electric utility's estimated cost of compliance.

9.13 	Sec. 7. Minnesota Statutes 2004, section 216B.241, subdivision 1a, is amended to read:
9.14 		Subd. 1a.Investment, expenditure, and contribution; public utility. (a) For 
9.15 	purposes of this subdivision and subdivision 2, "public utility" has the meaning given it 
9.16 	in section  216B.02, subdivision 4. Each public utility shall spend and invest for energy 
9.17 	conservation improvements under this subdivision and subdivision 2 the following 
9.18 	amounts: 
9.19 	(1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues 
9.20 	from service provided in the state;
9.21 	(2) for a utility that furnishes electric service, 1.5 percent of its gross operating 
9.22 	revenues from service provided in the state; and
9.23 	(3) for a utility that furnishes electric service and that operates a nuclear-powered 
9.24 	electric generating plant within the state, two percent of its gross operating revenues 
9.25 	from service provided in the state.
9.26 	For purposes of this paragraph (a), "gross operating revenues" do not include 
9.27 	revenues from large electric customer facilities exempted by the commissioner under 
9.28 	paragraph (b).
9.29 	The gross operating revenue to be used in determining the amount of spending 
9.30 	and investment required under this subdivision is the revenue for the year preceding the 
9.31 	year that a proposed plan is filed with the commissioner. The commissioner may adjust 
9.32 	the spending required after the first or subsequent year of a plan to reflect more recent 
9.33 	available revenue figures.
9.34 	(b) The owner of a large electric customer facility may petition the commissioner 
9.35 	to exempt both electric and gas utilities serving the large energy customer facility from 
10.1 	the investment and expenditure requirements of paragraph (a) with respect to retail 
10.2 	revenues attributable to the facility. At a minimum, the petition must be supported by 
10.3 	evidence relating to competitive or economic pressures on the customer and a showing 
10.4 	by the customer of reasonable efforts to identify, evaluate, and implement cost-effective 
10.5 	conservation improvements at the facility. If a petition is filed on or before October 1 of 
10.6 	any year, the order of the commissioner to exempt revenues attributable to the facility can 
10.7 	be effective no earlier than January 1 of the following year. The commissioner shall not 
10.8 	grant an exemption if the commissioner determines that granting the exemption is contrary 
10.9 	to the public interest. The commissioner may, after investigation, rescind any exemption 
10.10 	granted under this paragraph upon a determination that cost-effective energy conservation 
10.11 	improvements are available at the large electric customer facility. For the purposes of this 
10.12 	paragraph, "cost-effective" means that the projected total cost of the energy conservation 
10.13 	improvement at the large electric customer facility is less than the projected present value 
10.14 	of the energy and demand savings resulting from the energy conservation improvement. 
10.15 	For the purposes of investigations by the commissioner under this paragraph, the owner 
10.16 	of any large electric customer facility shall, upon request, provide the commissioner 
10.17 	with updated information comparable to that originally supplied in or with the owner's 
10.18 	original petition under this paragraph.
10.19 	(c) The commissioner may require investments or spending greater than the amounts 
10.20 	required under this subdivision for a public utility whose most recent advance forecast 
10.21 	required under section  216B.2422 or  216C.17 projects a peak demand deficit of 100 
10.22 	megawatts or greater within five years under midrange forecast assumptions. 
10.23 	(d) A public utility or owner of a large electric customer facility may appeal 
10.24 	a decision of the commissioner under paragraph (b) or (c) to the commission under 
10.25 	subdivision 2. In reviewing a decision of the commissioner under paragraph (b) or (c), 
10.26 	the commission shall rescind the decision if it finds that the required investments or 
10.27 	spending will:
10.28 	(1) not result in cost-effective energy conservation improvements; or
10.29 	(2) otherwise not be in the public interest.
10.30 	(e) Each utility shall determine what portion of the amount it sets aside for 
10.31 	conservation improvement will be used for conservation improvements under subdivision 
10.32 	2 and what portion it will contribute to the energy and conservation account established in 
10.33 	subdivision 2a. A public utility may propose to the commissioner to designate that all 
10.34 	or a portion of funds contributed to the account established in subdivision 2a be used 
10.35 	for research and development projects that can best be implemented on a statewide 
10.36 	basis. Contributions must be remitted to the commissioner by February 1 of each year. 
11.1 	Nothing in this subdivision prohibits a public utility from spending or investing for energy 
11.2 	conservation improvement more than required in this subdivision.

11.3 	Sec. 8. Minnesota Statutes 2005 Supplement, section 216B.241, subdivision 1b, 
11.4 	is amended to read:
11.5 		Subd. 1b.Conservation improvement by cooperative association or 
11.6 	municipality. (a) This subdivision applies to:
11.7 	(1) a cooperative electric association that provides retail service to its members;
11.8 	(2) a municipality that provides electric service to retail customers; and
11.9 	(3) a municipality with gross operating revenues in excess of $5,000,000 from sales 
11.10 	of natural gas to retail customers.
11.11 	(b) Each cooperative electric association and municipality subject to this subdivision 
11.12 	shall spend and invest for energy conservation improvements under this subdivision 
11.13 	the following amounts:
11.14 	(1) for a municipality, 0.5 percent of its gross operating revenues from the sale of 
11.15 	gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding 
11.16 	gross operating revenues from electric and gas service provided in the state to large 
11.17 	electric customer facilities; and
11.18 	(2) for a cooperative electric association, 1.5 percent of its gross operating revenues 
11.19 	from service provided in the state, excluding gross operating revenues from service 
11.20 	provided in the state to large electric customer facilities indirectly through a distribution 
11.21 	cooperative electric association.
11.22 	The gross operating revenue to be used in determining the amount of spending 
11.23 	and investment required under this subdivision is the revenue for the year preceding the 
11.24 	year that a proposed plan is filed with the commissioner. The commissioner may adjust 
11.25 	the spending required after the first or subsequent year of a plan to reflect more recent 
11.26 	available revenue figures.
11.27 	(c) Each municipality and cooperative electric association subject to this subdivision 
11.28 	shall identify and implement energy conservation improvement spending and investments 
11.29 	that are appropriate for the municipality or association, except that a municipality or 
11.30 	association may not spend or invest for energy conservation improvements that directly 
11.31 	benefit a large electric customer facility for which the commissioner has issued an 
11.32 	exemption under subdivision 1a, paragraph (b).
11.33 	(d) Each municipality and cooperative electric association subject to this subdivision 
11.34 	may spend and invest annually up to ten percent of the total amount required to be spent 
11.35 	and invested on energy conservation improvements under this subdivision on research 
12.1 	and development projects that meet the definition of energy conservation improvement 
12.2 	in subdivision 1 and that are funded directly by the municipality or cooperative electric 
12.3 	association.
12.4 	(e) Load-management activities that do not reduce energy use but that increase the 
12.5 	efficiency of the electric system may be used to meet 50 percent of the conservation 
12.6 	investment and spending requirements of this subdivision.
12.7 	(f) A generation and transmission cooperative electric association that provides 
12.8 	energy services to cooperative electric associations that provide electric service at retail to 
12.9 	consumers may invest in energy conservation improvements on behalf of the associations 
12.10 	it serves and may fulfill the conservation, spending, reporting, and energy savings goals on 
12.11 	an aggregate basis. A municipal power agency or other not-for-profit entity that provides 
12.12 	energy service to municipal utilities that provide electric service at retail may invest in 
12.13 	energy conservation improvements on behalf of the municipal utilities it serves and may 
12.14 	fulfill the conservation, spending, reporting, and energy savings goals on an aggregate 
12.15 	basis, under an agreement between the municipal power agency or not-for-profit entity 
12.16 	and each municipal utility for funding the investments.
12.17 	(g) At least every four years, on a schedule determined by the commissioner, each 
12.18 	municipality or cooperative shall file an overview of its conservation improvement plan 
12.19 	with the commissioner. With this overview, the municipality or cooperative shall also 
12.20 	provide an evaluation to the commissioner detailing its energy conservation improvement 
12.21 	spending and investments for the previous period. The evaluation must briefly describe 
12.22 	each conservation program and must specify the energy savings or increased efficiency in 
12.23 	the use of energy within the service territory of the utility or association that is the result 
12.24 	of the spending and investments. The evaluation must analyze the cost-effectiveness 
12.25 	of the utility's or association's conservation programs, using a list of baseline energy 
12.26 	and capacity savings assumptions developed in consultation with the department. 
12.27 	The commissioner shall review each evaluation and make recommendations, where 
12.28 	appropriate, to the municipality or association to increase the effectiveness of conservation 
12.29 	improvement activities. Up to three percent of a utility's conservation spending obligation 
12.30 	under this section may be used for program pre-evaluation, testing, and monitoring and 
12.31 	program evaluation. The overview and evaluation filed by a municipality with less than 
12.32 	60,000,000 kilowatt hours in annual retail sales of electric service may consist of a letter 
12.33 	from the governing board of the municipal utility to the department providing the amount 
12.34 	of annual conservation spending required of that municipality and certifying that the 
12.35 	required amount has been spent on conservation programs pursuant to this subdivision.
13.1 	(h) The commissioner shall also review each evaluation for whether a portion of the 
13.2 	money spent on residential conservation improvement programs is devoted to programs 
13.3 	that directly address the needs of renters and low-income persons unless an insufficient 
13.4 	number of appropriate programs are available. For the purposes of this subdivision and 
13.5 	subdivision 2, "low-income" means an income at or below 50 percent of the state median 
13.6 	income.
13.7 	(i) As part of its spending for conservation improvement, a municipality or 
13.8 	association may contribute to the energy and conservation account. A municipality or 
13.9 	association may propose to the commissioner to designate that all or a portion of funds 
13.10 	contributed to the account be used for research and development projects that can best 
13.11 	be implemented on a statewide basis. Any amount contributed must be remitted to the 
13.12 	commissioner by February 1 of each year.
13.13 	(j) A municipality may spend up to 50 percent of its required spending under this 
13.14 	section to refurbish an existing district heating or cooling system. This paragraph expires 
13.15 	July 1, 2007.

13.16 	Sec. 9. Minnesota Statutes 2004, section 216B.241, subdivision 1c, is amended to read:
13.17 		Subd. 1c.Energy-saving goals objectives. (a) The commissioner shall establish 
13.18 	statewide energy-saving goals objectives for all gas and electric energy conservation 
13.19 	improvement expenditures and shall evaluate anmonitor energy conservation 
13.20 	improvement program on how well it meets the goals set programs for success in meeting 
13.21 	the statewide objectives. The commissioner must present a report on these objectives to 
13.22 	the legislature by January 15, 2007.
13.23 	(b) The commissioner shall, consistent with other law, commencing with calendar 
13.24 	year 2008, establish annual statewide electric capacity and energy savings objectives for 
13.25 	electric conservation investment programs that the commissioner deems to be in the 
13.26 	public interest. The commissioner may establish these objectives based upon utility 
13.27 	integrated resource plans, cost-effectiveness potential, utility load-growth projections, and 
13.28 	other factors. 
13.29 	The commissioner shall, consistent with other law, allocate statewide capacity and 
13.30 	energy savings objectives among public utilities, cooperative electric associations, and 
13.31 	municipals as determined by the commissioner to result in the greatest likelihood of 
13.32 	meeting the statewide objective. In determining the allocation of capacity and energy 
13.33 	savings objectives, the commissioner shall consider individual utilities' load-growth 
13.34 	projections, cost-effective savings potential, and past performance.
14.1 	(c) The commissioner shall, consistent with other law, commencing with calendar 
14.2 	year 2008, establish annual statewide natural gas savings objectives for natural gas 
14.3 	conservation investment programs that the commissioner deems to be in the public 
14.4 	interest. The commissioner may establish these goals based upon utility forecasts, 
14.5 	cost-effectiveness potential, and other sources.
14.6 	The commissioner shall determine and allocate statewide capacity and energy 
14.7 	savings objectives among public utilities and municipal utilities having an investment 
14.8 	obligation under this section related to gas revenues so as to result in the greatest 
14.9 	likelihood of meeting the statewide objective. In determining the allocation of capacity 
14.10 	and energy savings objectives, the commissioner shall consider individual utilities' 
14.11 	load-growth projections, cost-effective savings potential, and past performance.
14.12 	(d) The commissioner shall annually report the success in meeting these statewide 
14.13 	and individual utility objectives under this subdivision in a publicly available format.
14.14 	(e) An objective allocation by the commissioner under this subdivision does not 
14.15 	create an additional conservation investment spending obligation.

14.16 	Sec. 10. Minnesota Statutes 2005 Supplement, section 216B.241, subdivision 2, 
14.17 	is amended to read:
14.18 		Subd. 2.Programs. (a) The commissioner may require public utilities to make 
14.19 	investments and expenditures in energy conservation improvements, explicitly setting 
14.20 	forth the interest rates, prices, and terms under which the improvements must be offered to 
14.21 	the customers. The required programs must cover no more than a four-year period. Public 
14.22 	utilities shall file conservation improvement plans by June 1, on a schedule determined 
14.23 	by order of the commissioner, but at least every four years. Plans received by a public 
14.24 	utility by June 1 must be approved or approved as modified by the commissioner by 
14.25 	December 1 of that same year. The commissioner shall give special consideration and 
14.26 	encouragement to programs that bring about significant net savings through the use of 
14.27 	energy-efficient lighting. The commissioner shall evaluate the program on the basis of 
14.28 	cost-effectiveness and the reliability of technologies employed. The commissioner's order 
14.29 	must provide to the extent practicable for a free choice, by consumers participating in the 
14.30 	program, of the device, method, material, or project constituting the energy conservation 
14.31 	improvement and for a free choice of the seller, installer, or contractor of the energy 
14.32 	conservation improvement, provided that the device, method, material, or project seller, 
14.33 	installer, or contractor is duly licensed, certified, approved, or qualified, including under 
14.34 	the residential conservation services program, where applicable.
15.1 	(b) The commissioner may require a utility to make an energy conservation 
15.2 	improvement investment or expenditure whenever the commissioner finds that the 
15.3 	improvement will result in energy savings at a total cost to the utility less than the cost 
15.4 	to the utility to produce or purchase an equivalent amount of new supply of energy. The 
15.5 	commissioner shall nevertheless ensure that every public utility operate one or more 
15.6 	programs under periodic review by the department.
15.7 	(c) Each public utility subject to subdivision 1a may spend and invest annually up to 
15.8 	ten percent of the total amount required to be spent and invested on energy conservation 
15.9 	improvements under this section by the utility on research and development projects 
15.10 	that meet the definition of energy conservation improvement in subdivision 1 and that 
15.11 	are funded directly by the public utility.
15.12 	(d) A public utility may not spend for or invest in energy conservation improvements 
15.13 	that directly benefit a large electric customer facility for which the commissioner has 
15.14 	issued an exemption pursuant to subdivision 1a, paragraph (b). The commissioner shall 
15.15 	consider and may require a utility to undertake a program suggested by an outside source, 
15.16 	including a political subdivision or a nonprofit or community organization.
15.17 	(e) The commissioner may, by order, establish a list of programs that may be 
15.18 	offered as energy conservation improvements by a public utility, municipal utility, 
15.19 	cooperative electric association, or other entity providing conservation services pursuant 
15.20 	to this section. The list of programs may include rebates for high-efficiency appliances, 
15.21 	rebates or subsidies for high-efficiency lamps, small business energy audits, and building 
15.22 	recommissioning. The commissioner may, by order, change this list to add or subtract 
15.23 	programs as the commissioner determines is necessary to promote efficient and effective 
15.24 	conservation programs.
15.25 	(f) The commissioner shall ensure that a portion of the money spent on residential 
15.26 	conservation improvement programs is devoted to programs that directly address the 
15.27 	needs of renters and low-income persons, in proportion to the amount the utility has 
15.28 	historically spent on such programs based on the most recent three-year average relative to 
15.29 	the utility's total conservation spending under this section, unless an insufficient number 
15.30 	of appropriate programs are available including low-income renters. When approving 
15.31 	spending and energy savings goals for low-income conservation improvement programs, 
15.32 	the commissioner shall consider historic spending, participation and energy savings for 
15.33 	low-income programs, and the number of low-income persons residing in the utility's 
15.34 	service territory. A utility that furnishes gas service must spend at least 0.2 percent 
15.35 	of its gross operating revenue from residential customers on low-income conservation 
15.36 	improvement programs.
16.1 	(g) A utility, a political subdivision, or a nonprofit or community organization 
16.2 	that has suggested a program, the attorney general acting on behalf of consumers and 
16.3 	small business interests, or a utility customer that has suggested a program and is not 
16.4 	represented by the attorney general under section 8.33 may petition the commission to 
16.5 	modify or revoke a department decision under this section, and the commission may do 
16.6 	so if it determines that the program is not cost-effective, does not adequately address the 
16.7 	residential conservation improvement needs of low-income persons, has a long-range 
16.8 	negative effect on one or more classes of customers, or is otherwise not in the public 
16.9 	interest. The commission shall reject a petition that, on its face, fails to make a reasonable 
16.10 	argument that a program is not in the public interest.
16.11 	(h) The commissioner may order a public utility to include, with the filing of the 
16.12 	utility's proposed conservation improvement plan under paragraph (a), the results of an 
16.13 	independent audit of the utility's conservation improvement programs and expenditures 
16.14 	performed by the department or an auditor with experience in the provision of energy 
16.15 	conservation and energy efficiency services approved by the commissioner and chosen by 
16.16 	the utility. The audit must specify the energy savings or increased efficiency in the use 
16.17 	of energy within the service territory of the utility that is the result of the spending and 
16.18 	investments. The audit must evaluate the cost-effectiveness of the utility's conservation 
16.19 	programs.
16.20 	(i) Up to three percent of a utility's conservation spending obligation under this 
16.21 	section may be used for program pre-evaluation, testing, and monitoring and program 
16.22 	audit and evaluation.

16.23 	Sec. 11. Minnesota Statutes 2004, section 216B.241, subdivision 6, is amended to read:
16.24 		Subd. 6.Renewable energy research. (a) A public utility that owns a nuclear 
16.25 	generation facility in the state shall spend five percent of the total amount that utility 
16.26 	is required to spend under this section to support basic and applied research and 
16.27 	demonstration activities at the University of Minnesota Initiative for Renewable Energy 
16.28 	and the Environment for the development of renewable energy sources and technologies. 
16.29 	The utility shall transfer the required amount to the University of Minnesota on or before 
16.30 	July 1 of each year and that annual amount shall be deducted from the amount of money the 
16.31 	utility is required to spend under this section. The University of Minnesota shall transfer 
16.32 	at least ten percent of these funds to at least one rural campus or experiment station.
16.33 	(b) Research funded under this subdivision shall include:
16.34 	(1) development of environmentally sound production, distribution, and use of 
16.35 	energy, chemicals, and materials from renewable sources;
17.1 	(2) processing and utilization of agricultural and forestry plant products and other 
17.2 	bio-based, renewable sources as a substitute for fossil-fuel-based energy, chemicals, and 
17.3 	materials using a variety of means including biocatalysis, biorefining, and fermentation;
17.4 	(3) conversion of state wind resources to hydrogen for energy storage and 
17.5 	transportation to areas of energy demand;
17.6 	(4) improvements in scalable hydrogen fuel cell technologies; and
17.7 	(5) production of hydrogen from bio-based, renewable sources; and sequestration 
17.8 	of carbon.
17.9 	(c) Notwithstanding other law to the contrary, the utility may, but is not required to, 
17.10 	spend more than two percent of its gross operating revenues from service provided in this 
17.11 	state under this section or section  216B.2411.
17.12 	(d) This subdivision expires June 30, 2008.

17.13 	Sec. 12. [216B.8121] MINNESOTA RENEWABLE HYDROGEN INITIATIVE.
17.14 	The Department of Commerce must coordinate and administer, directly or by 
17.15 	contract, the Minnesota Renewable Hydrogen Initiative. The initiative may be run 
17.16 	as a public-private partnership representing business, academic, governmental, and 
17.17 	nongovernmental organizations, and is charged with achieving the hydrogen goal set in 
17.18 	section 216B.013. The initiative's main responsibility is to oversee the development and 
17.19 	implementation of a hydrogen road map that capitalizes on Minnesota's strengths and 
17.20 	establishes a vision, goals, and measurable milestones for achieving those hydrogen goals. 
17.21 	The Department of Commerce shall report to the legislature on the initiative's progress 
17.22 	every two years as part of its existing reporting requirements under section 216B.812, 
17.23 	subdivision 2.

17.24 	Sec. 13. Minnesota Statutes 2005 Supplement, section 216C.052, subdivision 3, 
17.25 	is amended to read:
17.26 		Subd. 3.Assessment and appropriation. In addition to the amount noted in 
17.27 	subdivision 2, the commission may assess utilities, using the mechanism specified in that 
17.28 	subdivision, up to an additional $500,000 annually through June 30, 2006 2008. The 
17.29 	amounts assessed under this subdivision are appropriated to the commission, and some or 
17.30 	all of the amounts assessed may be transferred to the commissioner of administration, for 
17.31 	the purposes specified in section 16B.325 and Laws 2001, chapter 212, article 1, section 
17.32 	3, as needed to implement those sections.

18.1 	Sec. 14. Minnesota Statutes 2005 Supplement, section 216C.052, subdivision 4, 
18.2 	is amended to read:
18.3 		Subd. 4.Expiration. This section expiresSubdivisions 1 and 2 expire June 30, 
18.4 	2007. Subdivision 3 expires June 30, 2008.

18.5 	Sec. 15. Minnesota Statutes 2004, section 216C.37, subdivision 1, is amended to read:
18.6 		Subdivision 1.Definitions. In this section:
18.7 	(a) "Commissioner" means the commissioner of commerce.
18.8 	(b) "Energy conservation investments" means all capital expenditures that are 
18.9 	associated with conservation measures identified in an energy project study, including 
18.10 	renewable energy measures, and that have a ten-year or less payback period.
18.11 	(c) "Municipality" means any county, statutory or home rule charter city, town, 
18.12 	school district, or any combination of those units operating under an agreement to jointly 
18.13 	undertake projects authorized in this section.
18.14 	(d) "Energy project study" means a study of one or more energy-related capital 
18.15 	improvement projects analyzed in sufficient detail to support a financing application. At a 
18.16 	minimum, it must include one year of energy consumption and cost data, a description 
18.17 	of existing conditions, a description of proposed conditions, a detailed description of the 
18.18 	costs of the project, and calculations sufficient to document the proposed energy savings.

18.19 	Sec. 16. Minnesota Statutes 2005 Supplement, section 216C.41, subdivision 3, is 
18.20 	amended to read:
18.21 		Subd. 3.Eligibility window. Payments may be made under this section only for 
18.22 	electricity generated:
18.23 	(1) from a qualified hydroelectric facility that is operational and generating 
18.24 	electricity before December 31, 2007 2009;
18.25 	(2) from a qualified wind energy conversion facility that is operational and 
18.26 	generating electricity before January 1, 2007 2008; or
18.27 	(3) from a qualified on-farm biogas recovery facility from July 1, 2001, through 
18.28 	December 31, 2017.

18.29 	Sec. 17. Minnesota Statutes 2004, section 216C.41, subdivision 4, is amended to read:
18.30 		Subd. 4.Payment period. (a) A facility may receive payments under this section for 
18.31 	a ten-year period. No payment under this section may be made for electricity generated:
18.32 	(1) by a qualified hydroelectric facility after December 31, 2017 2019;
18.33 	(2) by a qualified wind energy conversion facility after December 31, 2017 2018; or
19.1 	(3) by a qualified on-farm biogas recovery facility after December 31, 2015.
19.2 	(b) The payment period begins and runs consecutively from the date the facility 
19.3 	begins generating electricity or, in the case of refurbishment of a hydropower facility, after 
19.4 	substantial repairs to the hydropower facility dam funded by the incentive payments are 
19.5 	initiated.

19.6 	Sec. 18. [325E.027] LOW-INCOME CUSTOMERS; DELIVERED HEATING 
19.7 	FUEL VENDOR'S OBLIGATION.
19.8 	A dealer or distributor of liquid propane gas or number 1 or number 2 fuel oil may 
19.9 	not refuse to deliver liquid propane gas or number 1 or number 2 fuel oil within their 
19.10 	normal delivery area to any person who receives direct grants under the low-income home 
19.11 	energy assistance program if that person has requested delivery, the dealer or distributor 
19.12 	has product available and the person requesting delivery is capable of making full payment 
19.13 	at the time of delivery, and is not in arrears regarding any previous fuel purchase from that 
19.14 	dealer or distributor. A distributor or dealer making delivery to a person receiving direct 
19.15 	grants from the low-income home energy assistance program may not charge that person 
19.16 	any additional costs or fees that would not be charged to any other customer and shall 
19.17 	make available to that person any discount programs on the same basis as the dealer or 
19.18 	distributor makes available to any other customer.

19.19 	Sec. 19. Laws 2005, chapter 97, article 13, section 4, is amended to read:
19.20 	Sec. 4. HYDROGEN REFUELING STATIONS; GRANTS.
19.21 	
19.22 	The commissioner of commerce shall make assessments under  Minnesota Statutes, 
19.23 	section 216C.052, of $300,000 in fiscal year  2006 and $300,000 in fiscal year 2007 for 
19.24 	the purpose of  matching federal and private investments in three multifuel  hydrogen 
19.25 	refueling stations in any of the following cities: Duluth, Moorhead, Alexandria, Morris, 
19.26 	and the  Twin Cities respectively.  The assessments are subject to the  assessment caps 
19.27 	specified in Minnesota Statutes, section  216C.052.  Sums assessed under this section 
19.28 	are appropriated to  the commissioner of commerce for the purpose of this section.  The 
19.29 	assessments and grants are contingent upon securing the  balance of the total project costs 
19.30 	from nonstate sources.  

19.31 	Sec. 20. UNIFORM CODES AND STANDARDS FOR HYDROGEN, FUEL 
19.32 	CELLS, AND RELATED TECHNOLOGIES.
 20.1 	The Department of Labor and Industry shall, in consultation with the Department 
20.2 	of Commerce, develop recommendations regarding the adoption of uniform codes and 
20.3 	standards for hydrogen infrastructure, fuel cells, and related technologies, and report 
20.4 	those recommendations to the legislature by December 31, 2006. The report must, at a 
20.5 	minimum, examine the following:
20.6 	(1) codes and standards that already exist for hydrogen, fuel cell, and related 
20.7 	technologies;
20.8 	(2) codes and standards under development by various official standard-making 
20.9 	bodies;
20.10 	(3) gaps between existing codes and standards, those under development, and those 
20.11 	that may still be needed but are not yet being developed; and
20.12 	(4) additional education and training for code officials regarding hydrogen, fuel cell, 
20.13 	and related technologies.

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

20.15 	Sec. 21. BIOMASS GENERATION FACILITY CLARIFICATION.
 20.16 	Consistent with Minnesota Statutes, section 216B.02, subdivision 4, that no person 
20.17 	shall be deemed a public utility if it produces or furnishes service to less than 25 persons, 
20.18 	the owner and operator of an up-to-15-megawatt, biomass-fueled, electric generation 
20.19 	facility located in Scott County, adjacent to an agricultural product processing plant that 
20.20 	uses the heat from the biomass facility in its production process, is not a public utility if 
20.21 	the electricity produced by the biomass facility is used solely for the operations of the 
20.22 	owners of the biomass facility and for wholesale sales. The providing of electric service 
20.23 	by the biomass facility to the owners of the facility does not require the consent of the 
20.24 	public utility in whose service area the agricultural product processing plant is located.

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

20.26 	Sec. 22. PETROLEUM VIOLATION ESCROW FUNDS.
 20.27 	Petroleum violation escrow funds appropriated to the commissioner of commerce by 
20.28 	Laws 1988, chapter 686, article 1, section 38, for state energy loan programs for schools, 
20.29 	hospitals, and public buildings may also be used for energy grants to those entities.

20.30 	Sec. 23. PROMOTING CONSERVATION THROUGH UTILITY RATES; 
20.31 	STUDY.
 21.1 	The Legislative Electric Energy Task Force must study the issue of the use of 
21.2 	utility rates as an incentive to conservation, including the separation of utility revenues 
21.3 	from sales. The study may include both gas and electric utility rates. The task force may 
21.4 	contract for all or part of the study, including contracting with other state agencies. The 
21.5 	study must be completed by January 15, 2007.

21.6 	Sec. 24. STATE PURCHASING OF PLUG-IN HYBRID ELECTRIC VEHICLES.
 21.7 		Subdivision 1.Definition. (a) As used in sections 25 and 26, "plug-in hybrid 
21.8 	electric vehicle (PHEV)" means a vehicle containing an internal combustion engine that 
21.9 	also allows power to be delivered to the drive wheels by a battery-powered electric motor 
21.10 	and that meets applicable federal motor vehicle safety standards. When connected to the 
21.11 	electrical grid via an electrical outlet, the vehicle must be able to recharge its battery. The 
21.12 	vehicle must have the ability to travel at least 20 miles, powered substantially by electricity.
21.13 	(b) As used in this section, "neighborhood electric vehicle" means an electrically 
21.14 	powered motor vehicle that has four wheels and has a speed attainable in one mile of at 
21.15 	least 20 miles per hour but not more than 25 miles per hour on a paved level surface.
21.16 		Subd. 2.Notice of state procurement policy in bid documents. All solicitation 
21.17 	documents for the purchase of a passenger automobile, as defined in Minnesota Statutes, 
21.18 	section 168.011, subdivision 7; pickup truck, as defined in Minnesota Statutes, section 
21.19 	168.011, subdivision 29; or van, as defined in Minnesota Statutes, section 168.011, 
21.20 	subdivision 28, issued under the jurisdiction of the Department of Administration after 
21.21 	June 30, 2006, must contain the following language: "It is the intention of the state of 
21.22 	Minnesota to begin purchasing plug-in hybrid electric vehicles and neighborhood electric 
21.23 	vehicles as soon as they become commercially available, meet the state's performance 
21.24 	specifications, and are priced no more than ten percent above the price for comparable 
21.25 	gasoline-powered vehicles. It is the intention of the state to purchase plug-in hybrid 
21.26 	electric vehicles and neighborhood electric vehicles whenever practicable after these 
21.27 	conditions have been met and as fleet needs dictate for at least five years  after these 
21.28 	conditions have been met."

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

21.30 	Sec. 25. PLUG-IN HYBRID ELECTRIC VEHICLE RETROFIT PROJECT.
 21.31 	The automotive engineering program at Minnesota State University - Mankato 
21.32 	is strongly encouraged to retrofit two flexible fuel vehicles to also operate as plug-in 
21.33 	hybrid electric vehicles (PHEV's). If the legislature does not appropriate funds for this 
21.34 	purpose, the Department of Administration and Minnesota State University - Mankato 
22.1 	may accept donations and work cooperatively with nonprofit agencies, higher education 
22.2 	institutions, and public agencies to procure vehicles and obtain other necessary funds to 
22.3 	conduct the retrofit. 

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

22.5 	Sec. 26. PLUG-IN HYBRID ELECTRIC VEHICLE TASK FORCE.
 22.6 		Subdivision 1.Establishment; membership. The plug-in hybrid electric vehicle 
22.7 	task force is established. The task force shall consist of 14 members as follows: 
22.8 	(1) one representative each from Xcel Energy and Great River Energy;
22.9 	(2) one representative each from the Minnesota Department of Commerce, the 
22.10 	Minnesota Department of Transportation, and the Minnesota Pollution Control Agency;
22.11 	(3) the director of the Travel Management Division of the Minnesota Department of 
22.12 	Administration, or the director's designee;
22.13 	(4) a representative from the University of Minnesota Department of Electrical 
22.14 	Engineering;
22.15 	(5) one representative each from Minnesota-based manufacturers of electric 
22.16 	batteries, automotive parts, and power electronics;
22.17 	(6) a representative from an environmental advocacy organization active in 
22.18 	electricity issues;
22.19 	(7) a representative of United Auto Workers Local 879; 
22.20 	(8) a representative of the Ford Motor Company; and
22.21 	(9) a representative of a Minnesota-based manufacturer of electric vehicles.
22.22 		Subd. 2.Appointment. The chairs of the senate and house of representatives 
22.23 	committees with primary jurisdiction over energy policy shall jointly appoint the task 
22.24 	force members.
22.25 		Subd. 3.Cochairs. The task force shall have two cochairs, one appointed by each 
22.26 	of the appointing authorities established in subdivision 2.
22.27 		Subd. 4.Charge. (a) The plug-in hybrid electric vehicle task force shall identify 
22.28 	barriers to the adoption of plug-in hybrid electric vehicles by state agencies, small 
22.29 	and large private fleets, and Minnesota drivers at-large and develop strategies to be 
22.30 	implemented over one-, three-, and five-year time frames to overcome those barriers. 
22.31 	Included in the analysis should be possible financial incentives to encourage Ford Motor 
22.32 	Company to produce plug-in hybrid, flexible-fueled vehicles at its St. Paul plant.
22.33 	(b) The task force shall consider and evaluate the data and information presented to 
22.34 	it under subdivision 5 in presenting its findings and recommendations.
23.1 		Subd. 5.Data and analysis. The commissioner of the Minnesota Pollution Control 
23.2 	Agency shall analyze and report to the task force the environmental impacts of purchasing 
23.3 	plug-in hybrid electric vehicles for the state-owned vehicle fleet and at penetration rates of 
23.4 	ten percent, 25 percent, and 50 percent of all motor vehicles registered in this state. The 
23.5 	analysis must compare, for plug-in hybrid electric vehicles and current fleet vehicles, air 
23.6 	emissions of sulfur dioxide, nitrogen oxides, particulate matter less than 2.5 microns in 
23.7 	width, volatile organic compounds, and carbon dioxide.
23.8 		Subd. 6.Expenses. Members of the task force are entitled to reimbursement 
23.9 	for expenses under Minnesota Statutes, section 15.059, subdivision 6. Member 
23.10 	reimbursements shall be paid for by the commissioner of commerce.
23.11 		Subd. 7.Staff. The state agencies represented on the commission shall provide 
23.12 	staff support.
23.13 		Subd. 8.Report. The task force shall present its findings and recommendations in a 
23.14 	report to the chairs of the senate and house of representatives committees with primary 
23.15 	jurisdiction over energy policy and state government operations by April 1, 2007.
23.16 		Subd. 9.Expiration. The task force expires on June 30, 2008.

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