<a id="pl.1.3"></a><var>1.3</var>Warming Mitigation Act of 2007, and the Community-Based Development Act <br/>
<a id="pl.1.4"></a><var>1.4</var>of 2007; modifying or adding provisions related to state energy policy goals for <br/>
<a id="pl.1.5"></a><var>1.5</var>fossil fuel-use reduction and renewable energy use, energy efficiency, energy <br/>
<a id="pl.1.6"></a><var>1.6</var>conservation improvement, recovery of energy-related utility costs, energy <br/>
<a id="pl.1.7"></a><var>1.7</var>savings, energy audits, electric utility renewable energy obligations of 25 percent <br/>
<a id="pl.1.8"></a><var>1.8</var>by 2025, community-based energy development, the transition to an energy <br/>
<a id="pl.1.9"></a><var>1.9</var>savings requirement for electric and natural gas utilities, addressing climate <br/>
<a id="pl.1.10"></a><var>1.10</var>change, the reliability administrator, the delegation to counties for permitting <br/>
<a id="pl.1.11"></a><var>1.11</var>wind projects under 25 megawatts, reducing greenhouse gas emissions, and <br/>
<a id="pl.1.12"></a><var>1.12</var>allocation of financial penalties against utilities; requiring studies and reports; <br/>
<a id="pl.1.13"></a><var>1.13</var>making technical and clarifying changes;amending Minnesota Statutes 2006, <br/>
<a id="pl.1.14"></a><var>1.14</var>sections 123B.65, subdivision 2; 216B.16, subdivisions 1, 6b; 216B.1612; <br/>
<a id="pl.1.15"></a><var>1.15</var>216B.1645, by adding subdivisions; 216B.169; 216B.1691, subdivisions 5, <br/>
<a id="pl.1.16"></a><var>1.16</var>as amended, 7, as added; 216B.241; 216C.05; 216C.052; 216C.31; 471.345, <br/>
<a id="pl.1.17"></a><var>1.17</var>subdivision 13; 500.30, subdivision 2; 504B.161, subdivision 1; proposing <br/>
<a id="pl.1.18"></a><var>1.18</var>coding for new law in Minnesota Statutes, chapters 216B; 216F; proposing <br/>
<a id="pl.1.19"></a><var>1.19</var>coding for new law as Minnesota Statutes, chapter 216H; repealing Minnesota <br/>
<a id="pl.1.20"></a><var>1.20</var>Statutes 2006, sections 216B.165; 216C.27; 216C.30, subdivision 5; Laws 2007, <br/>
<a id="pl.1.21"></a><var>1.21</var>chapter 3, section 3; Minnesota Rules, parts 7635.0100; 7635.0110; 7635.0120; <br/>
<a id="pl.1.22"></a><var>1.22</var>7635.0130; 7635.0140; 7635.0150; 7635.0160; 7635.0170; 7635.0180; <br/>
<a id="pl.1.23"></a><var>1.23</var>7635.0200; 7635.0210; 7635.0220; 7635.0230; 7635.0240; 7635.0250; <br/>
<a id="pl.1.24"></a><var>1.24</var>7635.0260; 7635.0300; 7635.0310; 7635.0320; 7635.0330; 7635.0340; <br/>
<a id="pl.1.25"></a><var>1.25</var>7635.0400; 7635.0410; 7635.0420; 7635.0500; 7635.0510; 7635.0520; <br/>
<a id="pl.1.26"></a><var>1.26</var>7635.0530; 7635.0600; 7635.0610; 7635.0620; 7635.0630; 7635.0640; <br/>
<a id="pl.1.27"></a><var>1.27</var>7635.1000; 7635.1010; 7635.1020; 7635.1030; 7655.0100; 7655.0120; <br/>
<a id="pl.1.28"></a><var>1.28</var>7655.0200; 7655.0210; 7655.0220; 7655.0230; 7655.0240; 7655.0250; <br/>
<a id="pl.1.29"></a><var>1.29</var>7655.0260; 7655.0270; 7655.0280; 7655.0290; 7655.0300; 7655.0310; <br/>
<a id="pl.1.30"></a><var>1.30</var>7655.0320; 7655.0330; 7655.0400; 7655.0410; 7655.0420.<br/>
<a id="pl.1.31"></a><var>1.31</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.1.0.0"></a>

<a id="bill.1.1.0"></a><a id="pl.1.34"></a><var>1.34</var>    Section 1. <b>TITLE.</b><br/>
<a id="pl.2.1"></a><var>2.1</var>    This act may be cited as the Next Generation Energy Act of 2007.<br/>
<br/>
<a id="bill.1.2.0"></a><a id="pl.2.2"></a><var>2.2</var>    Sec. 2. Minnesota Statutes 2006, section 216C.05, is amended to read:<br/>
<a id="pl.2.3"></a><var>2.3</var><b>216C.05 FINDINGS AND PURPOSE.</b><br/>
<a id="pl.2.4"></a><var>2.4</var>    Subdivision 1. <b>Energy planning.</b> The legislature finds and declares that continued <br/>
<a id="pl.2.5"></a><var>2.5</var>growth in demand for energy will cause severe social and economic dislocations, and that <br/>
<a id="pl.2.6"></a><var>2.6</var>the state has a vital interest in providing for: increased efficiency in energy consumption, <br/>
<a id="pl.2.7"></a><var>2.7</var>the development and use of renewable energy resources wherever possible, and the <br/>
<a id="pl.2.8"></a><var>2.8</var>creation of an effective energy forecasting, planning, and education program.<br/>
<a id="pl.2.9"></a><var>2.9</var>    The legislature further finds and declares that the protection of life, safety, and <br/>
<a id="pl.2.10"></a><var>2.10</var>financial security for citizens during an energy crisis is of paramount importance.<br/>
<a id="pl.2.11"></a><var>2.11</var>    Therefore, the legislature finds that it is in the public interest to review, analyze, and <br/>
<a id="pl.2.12"></a><var>2.12</var>encourage those energy programs that will minimize the need for annual increases in <br/>
<a id="pl.2.13"></a><var>2.13</var>fossil fuel consumption by 1990 and the need for additional electrical generating plants, <br/>
<a id="pl.2.14"></a><var>2.14</var>and provide for an optimum combination of energy sources consistent with environmental <br/>
<a id="pl.2.15"></a><var>2.15</var>protection and the protection of citizens.<br/>
<a id="pl.2.16"></a><var>2.16</var>    The legislature intends to monitor, through energy policy planning and <br/>
<a id="pl.2.17"></a><var>2.17</var>implementation, the transition from historic growth in energy demand to a period when <br/>
<a id="pl.2.18"></a><var>2.18</var>demand for traditional fuels becomes stable and the supply of renewable energy resources <br/>
<a id="pl.2.19"></a><var>2.19</var>is readily available and adequately utilized.<br/>
<a id="pl.2.20"></a><var>2.20</var>    Subd. 2. <b>Energy policy goals.</b> It is the energy policy of the state of Minnesota that:<br/>
<a id="pl.2.21"></a><var>2.21</var>    (1) the per capita use of fossil fuel as an energy input be reduced by 15 percent by <br/>
<a id="pl.2.22"></a><var>2.22</var>the year 2015, through increased reliance on energy efficiency and renewable energy <br/>
<a id="pl.2.23"></a><var>2.23</var>alternatives; and<br/>
<a id="pl.2.24"></a><var>2.24</var>    (2) 25 percent of the total energy used in the state be derived from renewable energy <br/>
<a id="pl.2.25"></a><var>2.25</var>resources by the year 2025.<br/>
<br/>
<a id="bill.2.0.0"></a>

<a id="bill.2.1.0"></a><a id="pl.2.28"></a><var>2.28</var>    Section 1. Minnesota Statutes 2006, section 216B.16, subdivision 1, is amended to read:<br/>
<a id="pl.2.29"></a><var>2.29</var>    Subdivision 1. <b>Notice.</b> Unless the commission otherwise orders, no public utility <br/>
<a id="pl.2.30"></a><var>2.30</var>shall change a rate which has been duly established under this chapter, except upon 60 <br/>
<a id="pl.2.31"></a><var>2.31</var>days' notice to the commission. The notice shall include statements of facts, expert <br/>
<a id="pl.2.32"></a><var>2.32</var>opinions, substantiating documents, and exhibits, supporting the change requested, and <br/>
<a id="pl.2.33"></a><var>2.33</var>state the change proposed to be made in the rates then in force and the time when the <br/>
<a id="pl.2.34"></a><var>2.34</var>modified rates will go into effect. If the filing utility does not have an approved energy <br/>
<a id="pl.3.1"></a><var>3.1</var>conservation improvement plan on file with the department, it shall also include in its <br/>
<a id="pl.3.2"></a><var>3.2</var>notice an energy conservation plan pursuant to section 
         <statute_ref>216B.241</statute_ref>. A filing utility subject to <br/>
<a id="pl.3.3"></a><var>3.3</var>rate regulation under section 216B.026 shall reference in its notice the energy conservation <br/>
<a id="pl.3.4"></a><var>3.4</var>improvement plans of the generation and transmission cooperative providing energy <br/>
<a id="pl.3.5"></a><var>3.5</var>conservation improvement programs to members of the filing utility pursuant to section <br/>
<a id="pl.3.6"></a><var>3.6</var>216B.241. The filing utility shall give written notice, as approved by the commission, of <br/>
<a id="pl.3.7"></a><var>3.7</var>the proposed change to the governing body of each municipality and county in the area <br/>
<a id="pl.3.8"></a><var>3.8</var>affected. All proposed changes shall be shown by filing new schedules or shall be plainly <br/>
<a id="pl.3.9"></a><var>3.9</var>indicated upon schedules on file and in force at the time. <br/>
<br/>
<a id="bill.2.2.0"></a><a id="pl.3.10"></a><var>3.10</var>    Sec. 2. Minnesota Statutes 2006, section 216B.16, subdivision 6b, is amended to read:<br/>
<a id="pl.3.11"></a><var>3.11</var>    Subd. 6b. <b>Energy conservation improvement.</b> (a) Except as otherwise provided <br/>
<a id="pl.3.12"></a><var>3.12</var>in this subdivision, all investments and expenses of a public utility as defined in <br/>
<a id="pl.3.13"></a><var>3.13</var>section 
         <statute_ref>216B.241, subdivision 1</statute_ref>, paragraph (e) (i), incurred in connection with energy <br/>
<a id="pl.3.14"></a><var>3.14</var>conservation improvements shall be recognized and included by the commission in the <br/>
<a id="pl.3.15"></a><var>3.15</var>determination of just and reasonable rates as if the investments and expenses were directly <br/>
<a id="pl.3.16"></a><var>3.16</var>made or incurred by the utility in furnishing utility service. <br/>
<a id="pl.3.17"></a><var>3.17</var>    (b) After December 31, 1999, Investments and expenses for energy conservation <br/>
<a id="pl.3.18"></a><var>3.18</var>improvements shall not be included by the commission in the determination of (i) just and <br/>
<a id="pl.3.19"></a><var>3.19</var>reasonable electric and gas rates for retail electric and gas service provided to large electric <br/>
<a id="pl.3.20"></a><var>3.20</var>customer facilities that have been exempted by the commissioner of the department <br/>
<a id="pl.3.21"></a><var>3.21</var>pursuant to section 
         <statute_ref>216B.241, subdivision 1a</statute_ref>, paragraph (b); or (ii) just and reasonable <br/>
<a id="pl.3.22"></a><var>3.22</var>gas rates for large energy facilities. However, no public utility shall be prevented from <br/>
<a id="pl.3.23"></a><var>3.23</var>recovering its investment in energy conservation improvements from all customers that <br/>
<a id="pl.3.24"></a><var>3.24</var>were made on or before December 31, 1999, in compliance with the requirements of <br/>
<a id="pl.3.25"></a><var>3.25</var>section 
<statute_ref>216B.241</statute_ref>. <br/>
<a id="pl.3.26"></a><var>3.26</var>    (c) The commission may permit a public utility to file rate schedules providing for <br/>
<a id="pl.3.27"></a><var>3.27</var>annual recovery of the costs of energy conservation improvements. These rate schedules <br/>
<a id="pl.3.28"></a><var>3.28</var>may be applicable to less than all the customers in a class of retail customers if necessary to <br/>
<a id="pl.3.29"></a><var>3.29</var>reflect the differing minimum spending requirements of section 
         <statute_ref>216B.241, subdivision 1a</statute_ref>. <br/>
<a id="pl.3.30"></a><var>3.30</var>After December 31, 1999,. The commission shall allow a public utility, without requiring <br/>
<a id="pl.3.31"></a><var>3.31</var>a general rate filing under this section, to reduce the electric and gas rates applicable to <br/>
<a id="pl.3.32"></a><var>3.32</var>large electric customer facilities that have been exempted by the commissioner of the <br/>
<a id="pl.3.33"></a><var>3.33</var>department pursuant to section 
         <statute_ref>216B.241, subdivision 1a</statute_ref>, paragraph (b), and to reduce the <br/>
<a id="pl.3.34"></a><var>3.34</var>gas rate applicable to a large energy facility by an amount that reflects the elimination <br/>
<a id="pl.3.35"></a><var>3.35</var>of energy conservation improvement investments or expenditures for those facilities <br/>
<a id="pl.4.1"></a><var>4.1</var>required on or before December 31, 1999. In the event that the commission has set <br/>
<a id="pl.4.2"></a><var>4.2</var>electric or gas rates based on the use of an accounting methodology that results in the cost <br/>
<a id="pl.4.3"></a><var>4.3</var>of conservation improvements being recovered from utility customers over a period of <br/>
<a id="pl.4.4"></a><var>4.4</var>years, the rate reduction may occur in a series of steps to coincide with the recovery of <br/>
<a id="pl.4.5"></a><var>4.5</var>balances due to the utility for conservation improvements made by the utility on or before <br/>
<a id="pl.4.6"></a><var>4.6</var>December 31, 1999 2007. <br/>
<br/>
<a id="bill.2.3.0"></a><a id="pl.4.7"></a><var>4.7</var>    Sec. 3. <b>[216B.1636] RECOVERY OF ELECTRIC UTILITY INFRASTRUCTURE </b><br/>
<a id="pl.4.8"></a><var>4.8</var><b>COSTS.</b><br/>
<a id="pl.4.9"></a><var>4.9</var>    Subdivision 1. <b>Definitions.</b> (a) "Electric utility" means a public utility as defined in <br/>
<a id="pl.4.10"></a><var>4.10</var>section 216B.02, subdivision 4, that furnishes electric service to retail customers.<br/>
<a id="pl.4.11"></a><var>4.11</var>    (b) "Electric utility infrastructure costs" or "EUIC" means costs for electric utility <br/>
<a id="pl.4.12"></a><var>4.12</var>infrastructure projects that were not included in the electric utility's rate base in its most <br/>
<a id="pl.4.13"></a><var>4.13</var>recent general rate case.<br/>
<a id="pl.4.14"></a><var>4.14</var>    (c) "Electric utility infrastructure projects" means projects that:<br/>
<a id="pl.4.15"></a><var>4.15</var>    (1) replace or modify existing electric utility infrastructure, including utility-owned <br/>
<a id="pl.4.16"></a><var>4.16</var>buildings, if the replacement or modification is shown to conserve energy or use energy <br/>
<a id="pl.4.17"></a><var>4.17</var>more efficiently, consistent with section 216B.241, subdivision 1c; or <br/>
<a id="pl.4.18"></a><var>4.18</var>    (2) conserve energy or use energy more efficiently by using waste heat recovery <br/>
<a id="pl.4.19"></a><var>4.19</var>converted into electricity as defined in section 216B.241, subdivision 1, paragraph (n).<br/>
<a id="pl.4.20"></a><var>4.20</var>    Subd. 2. <b>Filing.</b> (a) The commission may approve an electric utility's petition for <br/>
<a id="pl.4.21"></a><var>4.21</var>a rate schedule to recover EUIC under this section. An electric utility may petition the <br/>
<a id="pl.4.22"></a><var>4.22</var>commission to recover a rate of return, income taxes on the rate of return, incremental <br/>
<a id="pl.4.23"></a><var>4.23</var>property taxes, if any, plus incremental depreciation expense associated with EUIC.<br/>
<a id="pl.4.24"></a><var>4.24</var>    (b) The filing is subject to the following:<br/>
<a id="pl.4.25"></a><var>4.25</var>    (1) an electric utility may submit a filing under this section no more than once <br/>
<a id="pl.4.26"></a><var>4.26</var>per year; and<br/>
<a id="pl.4.27"></a><var>4.27</var>    (2) an electric utility must file sufficient information to satisfy the commission <br/>
<a id="pl.4.28"></a><var>4.28</var>regarding the proposed EUIC or be subject to denial by the commission, which <br/>
<a id="pl.4.29"></a><var>4.29</var>information includes, but is not limited to:<br/>
<a id="pl.4.30"></a><var>4.30</var>    (i) the location, description, and costs associated with the project;<br/>
<a id="pl.4.31"></a><var>4.31</var>    (ii) evidence that the electric utility infrastructure project will conserve energy or use <br/>
<a id="pl.4.32"></a><var>4.32</var>energy more efficiently than similar utility facilities currently used by the electric utility;<br/>
<a id="pl.4.33"></a><var>4.33</var>    (iii) the proposed schedule for implementation;<br/>
<a id="pl.4.34"></a><var>4.34</var>    (iv) a description of the costs, and salvage value, if any, associated with the existing <br/>
<a id="pl.4.35"></a><var>4.35</var>infrastructure replaced or modified as a result of the project;<br/>
<a id="pl.5.1"></a><var>5.1</var>    (v) the proposed rate design and an explanation of why the proposed rate design <br/>
<a id="pl.5.2"></a><var>5.2</var>is in the public interest;<br/>
<a id="pl.5.3"></a><var>5.3</var>    (vi) the magnitude and timing of any known future electric utility projects that the <br/>
<a id="pl.5.4"></a><var>5.4</var>utility may seek to recover under this section;<br/>
<a id="pl.5.5"></a><var>5.5</var>    (vii) the magnitude of EUIC in relation to the electric utility's base revenue as <br/>
<a id="pl.5.6"></a><var>5.6</var>approved by the commission in the electric utility's most recent general rate case, <br/>
<a id="pl.5.7"></a><var>5.7</var>exclusive of fuel cost adjustments; <br/>
<a id="pl.5.8"></a><var>5.8</var>    (viii) the magnitude of EUIC in relation to the electric utility's capital expenditures <br/>
<a id="pl.5.9"></a><var>5.9</var>since its most recent general rate case;<br/>
<a id="pl.5.10"></a><var>5.10</var>    (ix) the amount of time since the utility last filed a general rate case and the utility's <br/>
<a id="pl.5.11"></a><var>5.11</var>reasons for seeking recovery outside of a general rate case; <br/>
<a id="pl.5.12"></a><var>5.12</var>    (x) documentation supporting the calculation of the EUIC; and<br/>
<a id="pl.5.13"></a><var>5.13</var>    (xi) a cost and benefit analysis showing that the electric utility infrastructure project <br/>
<a id="pl.5.14"></a><var>5.14</var>is in the public interest.<br/>
<a id="pl.5.15"></a><var>5.15</var>    (c) Upon approval of the proposed projects and associated EUIC rate schedule, the <br/>
<a id="pl.5.16"></a><var>5.16</var>utility may implement the electric utility infrastructure projects.<br/>
<a id="pl.5.17"></a><var>5.17</var>    Subd. 3. <b>Commission authority; orders.</b> The commission may issue orders <br/>
<a id="pl.5.18"></a><var>5.18</var>necessary to implement and administer this section.<br/>
<br/>
<a id="bill.2.4.0"></a><a id="pl.5.19"></a><var>5.19</var>    Sec. 4. <b>[216B.2401] ENERGY CONSERVATION POLICY GOAL.</b><br/>
<a id="pl.5.20"></a><var>5.20</var>    It is the energy policy of the state of Minnesota to achieve annual energy savings <br/>
<a id="pl.5.21"></a><var>5.21</var>equal to 1.5 percent of annual retail energy sales of electricity and natural gas directly <br/>
<a id="pl.5.22"></a><var>5.22</var>through energy conservation improvement programs and rate design, and indirectly <br/>
<a id="pl.5.23"></a><var>5.23</var>through energy codes and appliance standards, programs designed to transform the market <br/>
<a id="pl.5.24"></a><var>5.24</var>or change consumer behavior, efficiency improvements to the utility infrastructure and <br/>
<a id="pl.5.25"></a><var>5.25</var>system, and other efforts to promote energy efficiency and energy conservation.<br/>
<br/>
<a id="bill.2.5.0"></a><a id="pl.5.26"></a><var>5.26</var>    Sec. 5. Minnesota Statutes 2006, section 216B.241, is amended to read:<br/>
<a id="pl.5.27"></a><var>5.27</var><b>216B.241 ENERGY CONSERVATION IMPROVEMENT.</b><br/>
<a id="pl.5.28"></a><var>5.28</var>    Subdivision 1. <b>Definitions.</b> For purposes of this section and section 
         <statute_ref>216B.16, <br/>
<a id="pl.5.29"></a><var>5.29</var>subdivision 6b
         </statute_ref>, the terms defined in this subdivision have the meanings given them. <br/>
<a id="pl.5.30"></a><var>5.30</var>    (a) "Commission" means the Public Utilities Commission.<br/>
<a id="pl.5.31"></a><var>5.31</var>    (b) "Commissioner" means the commissioner of commerce.<br/>
<a id="pl.5.32"></a><var>5.32</var>    (c) "Customer facility" means all buildings, structures, equipment, and installations <br/>
<a id="pl.5.33"></a><var>5.33</var>at a single site.<br/>
<a id="pl.5.34"></a><var>5.34</var>    (d) "Department" means the Department of Commerce.<br/>
<a id="pl.6.1"></a><var>6.1</var>    (e) "Energy conservation" means demand-side management of energy supplies <br/>
<a id="pl.6.2"></a><var>6.2</var>resulting in a net reduction in energy use. Load management that reduces overall energy <br/>
<a id="pl.6.3"></a><var>6.3</var>use is energy conservation.<br/>
<a id="pl.6.4"></a><var>6.4</var>    (f) "Energy conservation improvement" means a project that results in energy <br/>
<a id="pl.6.5"></a><var>6.5</var>efficiency or energy conservation. Energy conservation improvement does not include <br/>
<a id="pl.6.6"></a><var>6.6</var>waste heat recovery converted into electricity or electric utility infrastructure projects <br/>
<a id="pl.6.7"></a><var>6.7</var>approved by the commission under section 216B.1636.<br/>
<a id="pl.6.8"></a><var>6.8</var>    (g) "Energy efficiency" refers to measures or programs, including energy <br/>
<a id="pl.6.9"></a><var>6.9</var>conservation measures or programs, that target consumer behavior, equipment, processes, <br/>
<a id="pl.6.10"></a><var>6.10</var>or devices designed to produce either an absolute decrease in consumption of electric <br/>
<a id="pl.6.11"></a><var>6.11</var>energy or natural gas or a decrease in consumption of electric energy or natural gas on a <br/>
<a id="pl.6.12"></a><var>6.12</var>per unit of production basis without a reduction in the quality or level of service provided <br/>
<a id="pl.6.13"></a><var>6.13</var>to the energy consumer.<br/>
<a id="pl.6.14"></a><var>6.14</var>    (g) (h) "Gross annual retail energy sales" means annual electric sales to all retail <br/>
<a id="pl.6.15"></a><var>6.15</var>customers in a utility's or association's Minnesota service territory or natural gas <br/>
<a id="pl.6.16"></a><var>6.16</var>throughput to all retail customers, including natural gas transportation customers, on a <br/>
<a id="pl.6.17"></a><var>6.17</var>utility's distribution system in Minnesota. For purposes of this section, gross annual <br/>
<a id="pl.6.18"></a><var>6.18</var>retail energy sales exclude gas sales to a large energy facility and gas and electric sales <br/>
<a id="pl.6.19"></a><var>6.19</var>to a large electric customer facility exempted by the commissioner under subdivision <br/>
<a id="pl.6.20"></a><var>6.20</var>1a, paragraph (b).<br/>
<a id="pl.6.21"></a><var>6.21</var>    (i)  "Investments and expenses of a public utility" includes the investments and <br/>
<a id="pl.6.22"></a><var>6.22</var>expenses incurred by a public utility in connection with an energy conservation <br/>
<a id="pl.6.23"></a><var>6.23</var>improvement, including but not limited to:<br/>
<a id="pl.6.24"></a><var>6.24</var>    (1) the differential in interest cost between the market rate and the rate charged on a <br/>
<a id="pl.6.25"></a><var>6.25</var>no-interest or below-market interest loan made by a public utility to a customer for the <br/>
<a id="pl.6.26"></a><var>6.26</var>purchase or installation of an energy conservation improvement;<br/>
<a id="pl.6.27"></a><var>6.27</var>    (2) the difference between the utility's cost of purchase or installation of energy <br/>
<a id="pl.6.28"></a><var>6.28</var>conservation improvements and any price charged by a public utility to a customer for <br/>
<a id="pl.6.29"></a><var>6.29</var>such improvements.<br/>
<a id="pl.6.30"></a><var>6.30</var>    (h) (j) "Large electric customer facility" means a customer facility that imposes a <br/>
<a id="pl.6.31"></a><var>6.31</var>peak electrical demand on an electric utility's system of not less than 20,000 kilowatts, <br/>
<a id="pl.6.32"></a><var>6.32</var>measured in the same way as the utility that serves the customer facility measures <br/>
<a id="pl.6.33"></a><var>6.33</var>electrical demand for billing purposes, and for which electric services are provided at <br/>
<a id="pl.6.34"></a><var>6.34</var>retail on a single bill by a utility operating in the state.<br/>
<a id="pl.6.35"></a><var>6.35</var>    (i) (k) "Large energy facility" has the meaning given it in section 216B.2421, <br/>
<a id="pl.6.36"></a><var>6.36</var>subdivision 2, clause (1).<br/>
<a id="pl.7.1"></a><var>7.1</var>    (l) "Load management" means an activity, service, or technology to change the <br/>
<a id="pl.7.2"></a><var>7.2</var>timing or the efficiency of a customer's use of energy that allows a utility or a customer <br/>
<a id="pl.7.3"></a><var>7.3</var>to respond to wholesale market fluctuations or to reduce the overall peak demand for <br/>
<a id="pl.7.4"></a><var>7.4</var>energy or capacity.<br/>
<a id="pl.7.5"></a><var>7.5</var>    (m) "Low-income programs" means energy conservation improvement programs <br/>
<a id="pl.7.6"></a><var>7.6</var>that directly serve the needs of low-income persons, including low-income renters.<br/>
<a id="pl.7.7"></a><var>7.7</var>    (n) "Waste heat recovery converted into electricity" means an energy recovery <br/>
<a id="pl.7.8"></a><var>7.8</var>process that converts otherwise lost energy from the heat of exhaust stacks or pipes used <br/>
<a id="pl.7.9"></a><var>7.9</var>for engines or manufacturing or industrial processes, or the reduction of high pressure <br/>
<a id="pl.7.10"></a><var>7.10</var>in water or gas pipelines.<br/>
<a id="pl.7.11"></a><var>7.11</var>    Subd. 1a. <b>Investment, expenditure, and contribution; public utility.</b> (a) For <br/>
<a id="pl.7.12"></a><var>7.12</var>purposes of this subdivision and subdivision 2, "public utility" has the meaning given it <br/>
<a id="pl.7.13"></a><var>7.13</var>in section 
         <statute_ref>216B.02, subdivision 4</statute_ref>. Each public utility shall spend and invest for energy <br/>
<a id="pl.7.14"></a><var>7.14</var>conservation improvements under this subdivision and subdivision 2 the following <br/>
<a id="pl.7.15"></a><var>7.15</var>amounts: <br/>
<a id="pl.7.16"></a><var>7.16</var>    (1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues <br/>
<a id="pl.7.17"></a><var>7.17</var>from service provided in the state;<br/>
<a id="pl.7.18"></a><var>7.18</var>    (2) for a utility that furnishes electric service, 1.5 percent of its gross operating <br/>
<a id="pl.7.19"></a><var>7.19</var>revenues from service provided in the state; and<br/>
<a id="pl.7.20"></a><var>7.20</var>    (3) for a utility that furnishes electric service and that operates a nuclear-powered <br/>
<a id="pl.7.21"></a><var>7.21</var>electric generating plant within the state, two percent of its gross operating revenues <br/>
<a id="pl.7.22"></a><var>7.22</var>from service provided in the state.<br/>
<a id="pl.7.23"></a><var>7.23</var>    For purposes of this paragraph (a), "gross operating revenues" do not include <br/>
<a id="pl.7.24"></a><var>7.24</var>revenues from large electric customer facilities exempted by the commissioner under <br/>
<a id="pl.7.25"></a><var>7.25</var>paragraph (b).<br/>
<a id="pl.7.26"></a><var>7.26</var>    (b) The owner of a large electric customer facility may petition the commissioner <br/>
<a id="pl.7.27"></a><var>7.27</var>to exempt both electric and gas utilities serving the large energy customer facility from <br/>
<a id="pl.7.28"></a><var>7.28</var>the investment and expenditure requirements of paragraph (a) with respect to retail <br/>
<a id="pl.7.29"></a><var>7.29</var>revenues attributable to the facility. At a minimum, the petition must be supported by <br/>
<a id="pl.7.30"></a><var>7.30</var>evidence relating to competitive or economic pressures on the customer and a showing <br/>
<a id="pl.7.31"></a><var>7.31</var>by the customer of reasonable efforts to identify, evaluate, and implement cost-effective <br/>
<a id="pl.7.32"></a><var>7.32</var>conservation improvements at the facility. If a petition is filed on or before October 1 of <br/>
<a id="pl.7.33"></a><var>7.33</var>any year, the order of the commissioner to exempt revenues attributable to the facility can <br/>
<a id="pl.7.34"></a><var>7.34</var>be effective no earlier than January 1 of the following year. The commissioner shall <br/>
<a id="pl.7.35"></a><var>7.35</var>not grant an exemption if the commissioner determines that granting the exemption is <br/>
<a id="pl.7.36"></a><var>7.36</var>contrary to the public interest. The commissioner may, after investigation, rescind any <br/>
<a id="pl.8.1"></a><var>8.1</var>exemption granted under this paragraph upon a determination that cost-effective the <br/>
<a id="pl.8.2"></a><var>8.2</var>customer is not continuing to make reasonable efforts to identify, evaluate, and implement <br/>
<a id="pl.8.3"></a><var>8.3</var>energy conservation improvements are available at the large electric customer facility. <br/>
<a id="pl.8.4"></a><var>8.4</var>For the purposes of this paragraph, "cost-effective" means that the projected total cost of <br/>
<a id="pl.8.5"></a><var>8.5</var>the energy conservation improvement at the large electric customer facility is less than <br/>
<a id="pl.8.6"></a><var>8.6</var>the projected present value of the energy and demand savings resulting from the energy <br/>
<a id="pl.8.7"></a><var>8.7</var>conservation improvement. For the purposes of investigations by the commissioner under <br/>
<a id="pl.8.8"></a><var>8.8</var>this paragraph, the owner of any large electric customer facility shall, upon request, <br/>
<a id="pl.8.9"></a><var>8.9</var>provide the commissioner with updated information comparable to that originally supplied <br/>
<a id="pl.8.10"></a><var>8.10</var>in or with the owner's original petition under this paragraph.<br/>
<a id="pl.8.11"></a><var>8.11</var>    (c) The commissioner may require investments or spending greater than the amounts <br/>
<a id="pl.8.12"></a><var>8.12</var>required under this subdivision for a public utility whose most recent advance forecast <br/>
<a id="pl.8.13"></a><var>8.13</var>required under section 
         <statute_ref>216B.2422</statute_ref> or 
         <statute_ref>216C.17</statute_ref> projects a peak demand deficit of 100 <br/>
<a id="pl.8.14"></a><var>8.14</var>megawatts or greater within five years under midrange forecast assumptions. <br/>
<a id="pl.8.15"></a><var>8.15</var>    (d) A public utility or owner of a large electric customer facility may appeal <br/>
<a id="pl.8.16"></a><var>8.16</var>a decision of the commissioner under paragraph (b) or (c) to the commission under <br/>
<a id="pl.8.17"></a><var>8.17</var>subdivision 2. In reviewing a decision of the commissioner under paragraph (b) or (c), <br/>
<a id="pl.8.18"></a><var>8.18</var>the commission shall rescind the decision if it finds that the required investments or <br/>
<a id="pl.8.19"></a><var>8.19</var>spending will:<br/>
<a id="pl.8.20"></a><var>8.20</var>    (1) not result in cost-effective energy conservation improvements; or<br/>
<a id="pl.8.21"></a><var>8.21</var>    (2) otherwise not be in the public interest.<br/>
<a id="pl.8.22"></a><var>8.22</var>    (e) Each utility shall determine what portion of the amount it sets aside for <br/>
<a id="pl.8.23"></a><var>8.23</var>conservation improvement will be used for conservation improvements under subdivision <br/>
<a id="pl.8.24"></a><var>8.24</var>2 and what portion it will contribute to the energy and conservation account established in <br/>
<a id="pl.8.25"></a><var>8.25</var>subdivision 2a. A public utility may propose to the commissioner to designate that all <br/>
<a id="pl.8.26"></a><var>8.26</var>or a portion of funds contributed to the account established in subdivision 2a be used <br/>
<a id="pl.8.27"></a><var>8.27</var>for research and development projects that can best be implemented on a statewide <br/>
<a id="pl.8.28"></a><var>8.28</var>basis. Contributions must be remitted to the commissioner by February 1 of each year. <br/>
<a id="pl.8.29"></a><var>8.29</var>Nothing in this subdivision prohibits a public utility from spending or investing for energy <br/>
<a id="pl.8.30"></a><var>8.30</var>conservation improvement more than required in this subdivision.<br/>
<a id="pl.8.31"></a><var>8.31</var>    Subd. 1b. <b>Conservation improvement by cooperative association or </b><br/>
<a id="pl.8.32"></a><var>8.32</var><b>municipality.</b> (a) This subdivision applies to:<br/>
<a id="pl.8.33"></a><var>8.33</var>    (1) a cooperative electric association that provides retail service to its members;<br/>
<a id="pl.8.34"></a><var>8.34</var>    (2) a municipality that provides electric service to retail customers; and<br/>
<a id="pl.9.1"></a><var>9.1</var>    (3) a municipality with gross operating revenues in excess of $5,000,000 from <br/>
<a id="pl.9.2"></a><var>9.2</var>sales of more than 1,000,000,000 cubic feet in annual throughput sales to natural gas <br/>
<a id="pl.9.3"></a><var>9.3</var>to retail customers.<br/>
<a id="pl.9.4"></a><var>9.4</var>    (b) Each cooperative electric association and municipality subject to this subdivision <br/>
<a id="pl.9.5"></a><var>9.5</var>shall spend and invest for energy conservation improvements under this subdivision <br/>
<a id="pl.9.6"></a><var>9.6</var>the following amounts:<br/>
<a id="pl.9.7"></a><var>9.7</var>    (1) for a municipality, 0.5 percent of its gross operating revenues from the sale of <br/>
<a id="pl.9.8"></a><var>9.8</var>gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding <br/>
<a id="pl.9.9"></a><var>9.9</var>gross operating revenues from electric and gas service provided in the state to large <br/>
<a id="pl.9.10"></a><var>9.10</var>electric customer facilities; and<br/>
<a id="pl.9.11"></a><var>9.11</var>    (2) for a cooperative electric association, 1.5 percent of its gross operating revenues <br/>
<a id="pl.9.12"></a><var>9.12</var>from service provided in the state, excluding gross operating revenues from service <br/>
<a id="pl.9.13"></a><var>9.13</var>provided in the state to large electric customer facilities indirectly through a distribution <br/>
<a id="pl.9.14"></a><var>9.14</var>cooperative electric association.<br/>
<a id="pl.9.15"></a><var>9.15</var>    (c) Each municipality and cooperative electric association subject to this subdivision <br/>
<a id="pl.9.16"></a><var>9.16</var>shall identify and implement energy conservation improvement spending and investments <br/>
<a id="pl.9.17"></a><var>9.17</var>that are appropriate for the municipality or association, except that a municipality <br/>
<a id="pl.9.18"></a><var>9.18</var>or association may not spend or invest for energy conservation improvements that <br/>
<a id="pl.9.19"></a><var>9.19</var>directly benefit a large energy facility or a large electric customer facility for which the <br/>
<a id="pl.9.20"></a><var>9.20</var>commissioner has issued an exemption under subdivision 1a, paragraph (b).<br/>
<a id="pl.9.21"></a><var>9.21</var>    (d) Each municipality and cooperative electric association subject to this subdivision <br/>
<a id="pl.9.22"></a><var>9.22</var>may spend and invest annually up to ten percent of the total amount required to be spent <br/>
<a id="pl.9.23"></a><var>9.23</var>and invested on energy conservation improvements under this subdivision on research <br/>
<a id="pl.9.24"></a><var>9.24</var>and development projects that meet the definition of energy conservation improvement <br/>
<a id="pl.9.25"></a><var>9.25</var>in subdivision 1 and that are funded directly by the municipality or cooperative electric <br/>
<a id="pl.9.26"></a><var>9.26</var>association.<br/>
<a id="pl.9.27"></a><var>9.27</var>    (e) Load-management activities that do not reduce energy use but that increase the <br/>
<a id="pl.9.28"></a><var>9.28</var>efficiency of the electric system may be used to meet 50 percent of the conservation <br/>
<a id="pl.9.29"></a><var>9.29</var>investment and spending requirements of this subdivision.<br/>
<a id="pl.9.30"></a><var>9.30</var>    (f) A generation and transmission cooperative electric association that provides <br/>
<a id="pl.9.31"></a><var>9.31</var>energy services to cooperative electric associations that provide electric service at retail to <br/>
<a id="pl.9.32"></a><var>9.32</var>consumers may invest in energy conservation improvements on behalf of the associations <br/>
<a id="pl.9.33"></a><var>9.33</var>it serves and may fulfill the conservation, spending, reporting, and energy savings goals on <br/>
<a id="pl.9.34"></a><var>9.34</var>an aggregate basis. A municipal power agency or other not-for-profit entity that provides <br/>
<a id="pl.9.35"></a><var>9.35</var>energy service to municipal utilities that provide electric service at retail may invest in <br/>
<a id="pl.9.36"></a><var>9.36</var>energy conservation improvements on behalf of the municipal utilities it serves and may <br/>
<a id="pl.10.1"></a><var>10.1</var>fulfill the conservation, spending, reporting, and energy savings goals on an aggregate <br/>
<a id="pl.10.2"></a><var>10.2</var>basis, under an agreement between the municipal power agency or not-for-profit entity <br/>
<a id="pl.10.3"></a><var>10.3</var>and each municipal utility for funding the investments.<br/>
<a id="pl.10.4"></a><var>10.4</var>    (g) At least every four years, on a schedule determined by the commissioner, each <br/>
<a id="pl.10.5"></a><var>10.5</var>municipality or cooperative shall file an overview of its conservation improvement plan <br/>
<a id="pl.10.6"></a><var>10.6</var>with the commissioner. With this overview, Each municipality or cooperative shall file <br/>
<a id="pl.10.7"></a><var>10.7</var>energy  conservation improvement plans by June 1 on a schedule determined by order <br/>
<a id="pl.10.8"></a><var>10.8</var>of the commissioner, but at least every three years. Plans received by June 1 must be <br/>
<a id="pl.10.9"></a><var>10.9</var>approved or approved as modified by the commissioner by December 1 of the same year. <br/>
<a id="pl.10.10"></a><var>10.10</var>The municipality or cooperative shall also provide an evaluation to the commissioner <br/>
<a id="pl.10.11"></a><var>10.11</var>detailing its energy conservation improvement spending and investments for the previous <br/>
<a id="pl.10.12"></a><var>10.12</var>period. The evaluation must briefly describe each conservation program and must specify <br/>
<a id="pl.10.13"></a><var>10.13</var>the energy savings or increased efficiency in the use of energy within the service territory <br/>
<a id="pl.10.14"></a><var>10.14</var>of the utility or association that is the result of the spending and investments. The <br/>
<a id="pl.10.15"></a><var>10.15</var>evaluation must analyze the cost-effectiveness of the utility's or association's conservation <br/>
<a id="pl.10.16"></a><var>10.16</var>programs, using a list of baseline energy and capacity savings assumptions developed <br/>
<a id="pl.10.17"></a><var>10.17</var>in consultation with the department. The commissioner shall review each evaluation <br/>
<a id="pl.10.18"></a><var>10.18</var>and make recommendations, where appropriate, to the municipality or association to <br/>
<a id="pl.10.19"></a><var>10.19</var>increase the effectiveness of conservation improvement activities. Up to three percent of <br/>
<a id="pl.10.20"></a><var>10.20</var>a utility's conservation spending obligation under this section may be used for program <br/>
<a id="pl.10.21"></a><var>10.21</var>pre-evaluation, testing, and monitoring and program evaluation. The overview and <br/>
<a id="pl.10.22"></a><var>10.22</var>evaluation filed by a municipality with less than 60,000,000 kilowatt-hours in annual <br/>
<a id="pl.10.23"></a><var>10.23</var>retail sales of electric service may consist of a letter from the governing board of the <br/>
<a id="pl.10.24"></a><var>10.24</var>municipal utility to the department providing the amount of annual conservation spending <br/>
<a id="pl.10.25"></a><var>10.25</var>required of that municipality and certifying that the required amount has been spent on <br/>
<a id="pl.10.26"></a><var>10.26</var>conservation programs pursuant to this subdivision.<br/>
<a id="pl.10.27"></a><var>10.27</var>    (h) The commissioner shall also review each evaluation for whether a portion of the <br/>
<a id="pl.10.28"></a><var>10.28</var>money spent on residential conservation improvement programs is devoted to programs <br/>
<a id="pl.10.29"></a><var>10.29</var>that directly address the needs of renters and low-income persons unless an insufficient <br/>
<a id="pl.10.30"></a><var>10.30</var>number of appropriate programs are available. For the purposes of this subdivision and <br/>
<a id="pl.10.31"></a><var>10.31</var>subdivision 2, "low-income" means an income at or below 50 percent of the state median <br/>
<a id="pl.10.32"></a><var>10.32</var>income.<br/>
<a id="pl.10.33"></a><var>10.33</var>    (i) As part of its spending for conservation improvement, a municipality or <br/>
<a id="pl.10.34"></a><var>10.34</var>association may contribute to the energy and conservation account. A municipality or <br/>
<a id="pl.10.35"></a><var>10.35</var>association may propose to the commissioner to designate that all or a portion of funds <br/>
<a id="pl.10.36"></a><var>10.36</var>contributed to the account be used for research and development projects that can best <br/>
<a id="pl.11.1"></a><var>11.1</var>be implemented on a statewide basis. Any amount contributed must be remitted to the <br/>
<a id="pl.11.2"></a><var>11.2</var>commissioner by February 1 of each year.<br/>
<a id="pl.11.3"></a><var>11.3</var>    (j) (h) A municipality may spend up to 50 percent of its required spending under <br/>
<a id="pl.11.4"></a><var>11.4</var>this section to refurbish an existing district heating or cooling system. This paragraph <br/>
<a id="pl.11.5"></a><var>11.5</var>expires until July 1, 2007. From July 1, 2007, through June 30, 2011, expenditures made <br/>
<a id="pl.11.6"></a><var>11.6</var>to refurbish a district heating or cooling system are considered to be load-management <br/>
<a id="pl.11.7"></a><var>11.7</var>activities under paragraph (e). This paragraph expires July 1, 2011.<br/>
<a id="pl.11.8"></a><var>11.8</var>    (i) The commissioner shall consider and may require a utility, association, or <br/>
<a id="pl.11.9"></a><var>11.9</var>other entity providing energy efficiency and conservation services under this section to <br/>
<a id="pl.11.10"></a><var>11.10</var>undertake a program suggested by an outside source, including a political subdivision, <br/>
<a id="pl.11.11"></a><var>11.11</var>nonprofit corporation, or community organization.<br/>
<a id="pl.11.12"></a><var>11.12</var>    Subd. 1c. <b>Energy-saving goals.</b> (a) The commissioner shall establish energy-saving <br/>
<a id="pl.11.13"></a><var>11.13</var>goals for energy conservation improvement expenditures and shall evaluate an energy <br/>
<a id="pl.11.14"></a><var>11.14</var>conservation improvement program on how well it meets the goals set.<br/>
<a id="pl.11.15"></a><var>11.15</var>    (b) Each individual utility and association shall have an annual energy-savings <br/>
<a id="pl.11.16"></a><var>11.16</var>goal equivalent to 1.5 percent of gross annual retail energy sales unless modified by the <br/>
<a id="pl.11.17"></a><var>11.17</var>commissioner under paragraph (d). The savings goals must be calculated based on the <br/>
<a id="pl.11.18"></a><var>11.18</var>most recent three-year weather normalized average.<br/>
<a id="pl.11.19"></a><var>11.19</var>    (c) The commissioner must adopt a filing schedule that is designed to have all <br/>
<a id="pl.11.20"></a><var>11.20</var>utilities and associations operating under an energy savings plan by calendar year 2010.<br/>
<a id="pl.11.21"></a><var>11.21</var>    (d) In its energy conservation improvement plan filing, a utility or association may <br/>
<a id="pl.11.22"></a><var>11.22</var>request the commissioner to adjust its annual energy savings percentage goal based on <br/>
<a id="pl.11.23"></a><var>11.23</var>its historical conservation investment experience, customer class makeup, load growth, <br/>
<a id="pl.11.24"></a><var>11.24</var>a conservation potential study, or other factors the commissioner determines warrants <br/>
<a id="pl.11.25"></a><var>11.25</var>an adjustment. The commissioner may not approve a plan that provides for an annual <br/>
<a id="pl.11.26"></a><var>11.26</var>energy savings goal of less than one percent of gross annual retail energy sales from <br/>
<a id="pl.11.27"></a><var>11.27</var>energy conservation improvements. A utility or association may include in its energy <br/>
<a id="pl.11.28"></a><var>11.28</var>conservation plan energy savings from an electric utility infrastructure project or waste <br/>
<a id="pl.11.29"></a><var>11.29</var>heat recovery converted into electricity project approved by the commission under section <br/>
<a id="pl.11.30"></a><var>11.30</var>216B.1636 that may count as energy savings in addition to the minimum energy savings <br/>
<a id="pl.11.31"></a><var>11.31</var>goal of at least one percent for energy conservation improvements. Electric utility <br/>
<a id="pl.11.32"></a><var>11.32</var>infrastructure projects must result in increased energy efficiency greater than that which <br/>
<a id="pl.11.33"></a><var>11.33</var>would have occurred through normal maintenance activity.<br/>
<a id="pl.11.34"></a><var>11.34</var>    (e) An energy savings goal is not satisfied by attaining the revenue expenditure <br/>
<a id="pl.11.35"></a><var>11.35</var>requirements of subdivisions 1a and 1b, but can only be satisfied by meeting the energy <br/>
<a id="pl.11.36"></a><var>11.36</var>savings goal established in this subdivision.<br/>
<a id="pl.12.1"></a><var>12.1</var>    (f) An association or utility is not required to make energy conservation investments <br/>
<a id="pl.12.2"></a><var>12.2</var>to attain the energy savings goals of this subdivision that are not cost-effective even <br/>
<a id="pl.12.3"></a><var>12.3</var>if the investment is necessary to attain the energy savings goals. For the purpose of <br/>
<a id="pl.12.4"></a><var>12.4</var>this paragraph, in determining cost-effectiveness, the commissioner shall consider the <br/>
<a id="pl.12.5"></a><var>12.5</var>costs and benefits to ratepayers, the utility, participants, and society. In addition, the <br/>
<a id="pl.12.6"></a><var>12.6</var>commissioner shall consider the rate at which an association or municipal utility is <br/>
<a id="pl.12.7"></a><var>12.7</var>increasing its energy savings and its expenditures on energy conservation.<br/>
<a id="pl.12.8"></a><var>12.8</var>    (g) On an annual basis, the commissioner shall produce and make publicly available <br/>
<a id="pl.12.9"></a><var>12.9</var>a report on the annual energy savings and estimated carbon dioxide reductions achieved <br/>
<a id="pl.12.10"></a><var>12.10</var>by the energy conservation improvement programs for the two most recent years for <br/>
<a id="pl.12.11"></a><var>12.11</var>which data is available. The commissioner shall report on program performance both in <br/>
<a id="pl.12.12"></a><var>12.12</var>the aggregate and for each entity filing an energy conservation improvement plan for <br/>
<a id="pl.12.13"></a><var>12.13</var>approval or review by the commissioner.<br/>
<a id="pl.12.14"></a><var>12.14</var>    (h) By January 15, 2010, the commissioner shall report to the legislature whether the <br/>
<a id="pl.12.15"></a><var>12.15</var>spending requirements under subdivisions 1a and 1b are necessary to achieve the energy <br/>
<a id="pl.12.16"></a><var>12.16</var>savings goals established in this subdivision.<br/>
<a id="pl.12.17"></a><var>12.17</var>    Subd. 1d. <b>Cooperative conservation investment increase phase-in</b><b> Technical </b><br/>
<a id="pl.12.18"></a><var>12.18</var><b>assistance</b><b>.</b> The increase in required conservation improvement expenditures by a <br/>
<a id="pl.12.19"></a><var>12.19</var>cooperative electric association that results from the amendments in Laws 2001, chapter <br/>
<a id="pl.12.20"></a><var>12.20</var>212, article 8, section 6, to subdivision 1b, paragraph (a), clause (1), must be phased <br/>
<a id="pl.12.21"></a><var>12.21</var>in as follows:<br/>
<a id="pl.12.22"></a><var>12.22</var>    (1) at least 25 percent shall be effective in year 2002;<br/>
<a id="pl.12.23"></a><var>12.23</var>    (2) at least 50 percent shall be effective in year 2003;<br/>
<a id="pl.12.24"></a><var>12.24</var>    (3) at least 75 percent shall be effective in year 2004; and<br/>
<a id="pl.12.25"></a><var>12.25</var>    (4) all of the increase shall be effective in year 2005 and thereafter.<br/>
<a id="pl.12.26"></a><var>12.26</var>    The commissioner shall evaluate energy conservation improvement programs <br/>
<a id="pl.12.27"></a><var>12.27</var>on the basis of cost-effectiveness and the reliability of the technologies employed. <br/>
<a id="pl.12.28"></a><var>12.28</var>The commissioner shall, by order, establish, maintain, and update energy savings <br/>
<a id="pl.12.29"></a><var>12.29</var>assumptions that must be used when filing energy conservation improvement programs. <br/>
<a id="pl.12.30"></a><var>12.30</var>The commissioner shall establish an inventory of the most effective energy conservation <br/>
<a id="pl.12.31"></a><var>12.31</var>programs, techniques, and technologies, and encourage all Minnesota utilities to <br/>
<a id="pl.12.32"></a><var>12.32</var>implement them, where appropriate, in their service territories. The commissioner shall <br/>
<a id="pl.12.33"></a><var>12.33</var>describe these programs in sufficient detail to provide a utility reasonable guidance <br/>
<a id="pl.12.34"></a><var>12.34</var>concerning implementation. The commissioner shall prioritize the opportunities in <br/>
<a id="pl.12.35"></a><var>12.35</var>order of potential energy savings and in order of cost-effectiveness. The commissioner <br/>
<a id="pl.12.36"></a><var>12.36</var>may contract with a third party to carry out any of the commissioner's duties under <br/>
<a id="pl.13.1"></a><var>13.1</var>this subdivision, and to obtain technical assistance to evaluate the effectiveness of any <br/>
<a id="pl.13.2"></a><var>13.2</var>conservation improvement program. The commissioner may assess up to $800,000 <br/>
<a id="pl.13.3"></a><var>13.3</var>annually until June 30, 2009, and $450,000 annually thereafter for the purposes of this <br/>
<a id="pl.13.4"></a><var>13.4</var>subdivision. The assessments must be deposited into the energy and conservation account <br/>
<a id="pl.13.5"></a><var>13.5</var>created under subdivision 2a. An assessment made under this subdivision is not subject to <br/>
<a id="pl.13.6"></a><var>13.6</var>the cap on assessments provided by section 216B.62, or any other law.<br/>
<a id="pl.13.7"></a><var>13.7</var>    Subd. 1e. <b>Applied research and development grants.</b> The commissioner may, by <br/>
<a id="pl.13.8"></a><var>13.8</var>order, approve and make grants for applied research and development projects of general <br/>
<a id="pl.13.9"></a><var>13.9</var>applicability that identify new technologies or strategies to maximize energy savings, <br/>
<a id="pl.13.10"></a><var>13.10</var>improve the effectiveness of energy conservation programs, or document the carbon <br/>
<a id="pl.13.11"></a><var>13.11</var>dioxide reductions from energy conservation programs. When approving projects, the <br/>
<a id="pl.13.12"></a><var>13.12</var>commissioner shall consider proposals and comments from utilities and other interested <br/>
<a id="pl.13.13"></a><var>13.13</var>parties. The commissioner may assess up to $3,600,000 annually for the purposes of this <br/>
<a id="pl.13.14"></a><var>13.14</var>subdivision. The assessments must be deposited into the energy and conservation account <br/>
<a id="pl.13.15"></a><var>13.15</var>created under subdivision 2a. An assessment made under this subdivision is not subject to <br/>
<a id="pl.13.16"></a><var>13.16</var>the cap on assessments provided by section 216B.62, or any other law.<br/>
<a id="pl.13.17"></a><var>13.17</var>    Subd. 1f. <b>Facilities energy efficiency.</b> (a) The Department of Administration <br/>
<a id="pl.13.18"></a><var>13.18</var>and the Department of Commerce shall maintain and, as needed, revise the sustainable <br/>
<a id="pl.13.19"></a><var>13.19</var>building design guidelines developed under section 16B.325.<br/>
<a id="pl.13.20"></a><var>13.20</var>    (b) The Department of Administration and the Department of Commerce shall <br/>
<a id="pl.13.21"></a><var>13.21</var>maintain and update the benchmarking tool developed under Laws 2001, chapter 212, <br/>
<a id="pl.13.22"></a><var>13.22</var>article 1, section 3, so that all public buildings can use the benchmarking tool to maintain <br/>
<a id="pl.13.23"></a><var>13.23</var>energy use information for the purposes of establishing energy efficiency benchmarks, <br/>
<a id="pl.13.24"></a><var>13.24</var>tracking building performance, and measuring the results of energy efficiency and <br/>
<a id="pl.13.25"></a><var>13.25</var>conservation improvements.<br/>
<a id="pl.13.26"></a><var>13.26</var>    (c) The commissioner shall require that utilities include in their conservation <br/>
<a id="pl.13.27"></a><var>13.27</var>improvement plans programs that facilitate professional engineering verification to qualify <br/>
<a id="pl.13.28"></a><var>13.28</var>a building as Energy Star-labeled or as Leadership in Energy and Environmental Design <br/>
<a id="pl.13.29"></a><var>13.29</var>(LEED) certified. The state goal is to achieve certification of 1,000 commercial buildings <br/>
<a id="pl.13.30"></a><var>13.30</var>as Energy Star-labeled, and 100 commercial buildings as LEED-certified by December <br/>
<a id="pl.13.31"></a><var>13.31</var>31, 2010.<br/>
<a id="pl.13.32"></a><var>13.32</var>    (d) The commissioner may assess up to $500,000 annually for the purposes of this <br/>
<a id="pl.13.33"></a><var>13.33</var>subdivision. The assessments must be deposited into the energy and conservation account <br/>
<a id="pl.13.34"></a><var>13.34</var>created under subdivision 2a. An assessment made under this subdivision is not subject to <br/>
<a id="pl.13.35"></a><var>13.35</var>the cap on assessments provided by section 216B.62, or any other law.<br/>
<a id="pl.14.1"></a><var>14.1</var>    Subd. 2. <b>Programs.</b> (a) The commissioner may require public utilities to make <br/>
<a id="pl.14.2"></a><var>14.2</var>investments and expenditures in energy conservation improvements, explicitly setting <br/>
<a id="pl.14.3"></a><var>14.3</var>forth the interest rates, prices, and terms under which the improvements must be offered to <br/>
<a id="pl.14.4"></a><var>14.4</var>the customers. The required programs must cover no more than a four-year three-year <br/>
<a id="pl.14.5"></a><var>14.5</var>period. Public utilities shall file conservation improvement plans by June 1, on a schedule <br/>
<a id="pl.14.6"></a><var>14.6</var>determined by order of the commissioner, but at least every four three years. Plans <br/>
<a id="pl.14.7"></a><var>14.7</var>received by a public utility by June 1 must be approved or approved as modified by the <br/>
<a id="pl.14.8"></a><var>14.8</var>commissioner by December 1 of that same year. The commissioner shall give special <br/>
<a id="pl.14.9"></a><var>14.9</var>consideration and encouragement to programs that bring about significant net savings <br/>
<a id="pl.14.10"></a><var>14.10</var>through the use of energy-efficient lighting. The commissioner shall evaluate the program <br/>
<a id="pl.14.11"></a><var>14.11</var>on the basis of cost-effectiveness and the reliability of technologies employed. The <br/>
<a id="pl.14.12"></a><var>14.12</var>commissioner's order must provide to the extent practicable for a free choice, by consumers <br/>
<a id="pl.14.13"></a><var>14.13</var>participating in the program, of the device, method, material, or project constituting the <br/>
<a id="pl.14.14"></a><var>14.14</var>energy conservation improvement and for a free choice of the seller, installer, or contractor <br/>
<a id="pl.14.15"></a><var>14.15</var>of the energy conservation improvement, provided that the device, method, material, or <br/>
<a id="pl.14.16"></a><var>14.16</var>project seller, installer, or contractor is duly licensed, certified, approved, or qualified, <br/>
<a id="pl.14.17"></a><var>14.17</var>including under the residential conservation services program, where applicable.<br/>
<a id="pl.14.18"></a><var>14.18</var>    (b) The commissioner may require a utility to make an energy conservation <br/>
<a id="pl.14.19"></a><var>14.19</var>improvement investment or expenditure whenever the commissioner finds that the <br/>
<a id="pl.14.20"></a><var>14.20</var>improvement will result in energy savings at a total cost to the utility less than the cost <br/>
<a id="pl.14.21"></a><var>14.21</var>to the utility to produce or purchase an equivalent amount of new supply of energy. The <br/>
<a id="pl.14.22"></a><var>14.22</var>commissioner shall nevertheless ensure that every public utility operate one or more <br/>
<a id="pl.14.23"></a><var>14.23</var>programs under periodic review by the department.<br/>
<a id="pl.14.24"></a><var>14.24</var>    (c) Each public utility subject to subdivision 1a may spend and invest annually up to <br/>
<a id="pl.14.25"></a><var>14.25</var>ten percent of the total amount required to be spent and invested on energy conservation <br/>
<a id="pl.14.26"></a><var>14.26</var>improvements under this section by the utility on research and development projects <br/>
<a id="pl.14.27"></a><var>14.27</var>that meet the definition of energy conservation improvement in subdivision 1 and that <br/>
<a id="pl.14.28"></a><var>14.28</var>are funded directly by the public utility.<br/>
<a id="pl.14.29"></a><var>14.29</var>    (d) A public utility may not spend for or invest in energy conservation improvements <br/>
<a id="pl.14.30"></a><var>14.30</var>that directly benefit a large energy facility or a large electric customer facility for which <br/>
<a id="pl.14.31"></a><var>14.31</var>the commissioner has issued an exemption pursuant to subdivision 1a, paragraph (b). The <br/>
<a id="pl.14.32"></a><var>14.32</var>commissioner shall consider and may require a utility to undertake a program suggested <br/>
<a id="pl.14.33"></a><var>14.33</var>by an outside source, including a political subdivision or, a nonprofit corporation, or <br/>
<a id="pl.14.34"></a><var>14.34</var>community organization.<br/>
<a id="pl.14.35"></a><var>14.35</var>    (e) The commissioner may, by order, establish a list of programs that may be <br/>
<a id="pl.14.36"></a><var>14.36</var>offered as energy conservation improvements by a public utility, municipal utility, <br/>
<a id="pl.15.1"></a><var>15.1</var>cooperative electric association, or other entity providing conservation services pursuant <br/>
<a id="pl.15.2"></a><var>15.2</var>to this section. The list of programs may include rebates for high-efficiency appliances, <br/>
<a id="pl.15.3"></a><var>15.3</var>rebates or subsidies for high-efficiency lamps, small business energy audits, and building <br/>
<a id="pl.15.4"></a><var>15.4</var>recommissioning. The commissioner may, by order, change this list to add or subtract <br/>
<a id="pl.15.5"></a><var>15.5</var>programs as the commissioner determines is necessary to promote efficient and effective <br/>
<a id="pl.15.6"></a><var>15.6</var>conservation programs.<br/>
<a id="pl.15.7"></a><var>15.7</var>    (f) The commissioner shall ensure that a portion of the money spent on residential <br/>
<a id="pl.15.8"></a><var>15.8</var>conservation improvement programs is devoted to programs that directly address the <br/>
<a id="pl.15.9"></a><var>15.9</var>needs of renters and low-income persons, in proportion to the amount the utility has <br/>
<a id="pl.15.10"></a><var>15.10</var>historically spent on such programs based on the most recent three-year average relative to <br/>
<a id="pl.15.11"></a><var>15.11</var>the utility's total conservation spending under this section, unless an insufficient number of <br/>
<a id="pl.15.12"></a><var>15.12</var>appropriate programs are available.<br/>
<a id="pl.15.13"></a><var>15.13</var>    (g) (e) A utility, a political subdivision, or a nonprofit or community organization <br/>
<a id="pl.15.14"></a><var>15.14</var>that has suggested a program, the attorney general acting on behalf of consumers and <br/>
<a id="pl.15.15"></a><var>15.15</var>small business interests, or a utility customer that has suggested a program and is not <br/>
<a id="pl.15.16"></a><var>15.16</var>represented by the attorney general under section 
         <statute_ref>8.33</statute_ref> may petition the commission to <br/>
<a id="pl.15.17"></a><var>15.17</var>modify or revoke a department decision under this section, and the commission may do <br/>
<a id="pl.15.18"></a><var>15.18</var>so if it determines that the program is not cost-effective, does not adequately address the <br/>
<a id="pl.15.19"></a><var>15.19</var>residential conservation improvement needs of low-income persons, has a long-range <br/>
<a id="pl.15.20"></a><var>15.20</var>negative effect on one or more classes of customers, or is otherwise not in the public <br/>
<a id="pl.15.21"></a><var>15.21</var>interest. The commission shall reject a petition that, on its face, fails to make a reasonable <br/>
<a id="pl.15.22"></a><var>15.22</var>argument that a program is not in the public interest.<br/>
<a id="pl.15.23"></a><var>15.23</var>    (h) (f) The commissioner may order a public utility to include, with the filing of the <br/>
<a id="pl.15.24"></a><var>15.24</var>utility's proposed conservation improvement plan under paragraph (a), the results of an <br/>
<a id="pl.15.25"></a><var>15.25</var>independent audit of the utility's conservation improvement programs and expenditures <br/>
<a id="pl.15.26"></a><var>15.26</var>performed by the department or an auditor with experience in the provision of energy <br/>
<a id="pl.15.27"></a><var>15.27</var>conservation and energy efficiency services approved by the commissioner and chosen by <br/>
<a id="pl.15.28"></a><var>15.28</var>the utility. The audit must specify the energy savings or increased efficiency in the use <br/>
<a id="pl.15.29"></a><var>15.29</var>of energy within the service territory of the utility that is the result of the spending and <br/>
<a id="pl.15.30"></a><var>15.30</var>investments. The audit must evaluate the cost-effectiveness of the utility's conservation <br/>
<a id="pl.15.31"></a><var>15.31</var>programs.<br/>
<a id="pl.15.32"></a><var>15.32</var>    (i) Up to three percent of a utility's conservation spending obligation under this <br/>
<a id="pl.15.33"></a><var>15.33</var>section may be used for program pre-evaluation, testing, and monitoring and program <br/>
<a id="pl.15.34"></a><var>15.34</var>audit and evaluation.<br/>
<a id="pl.15.35"></a><var>15.35</var>    Subd. 2a. <b>Energy and conservation account.</b> The energy and conservation <br/>
<a id="pl.15.36"></a><var>15.36</var>account is established in the special revenue fund in the state treasury. The commissioner <br/>
<a id="pl.16.1"></a><var>16.1</var>must deposit money contributed under subdivisions 1a and 1b assessed or contributed <br/>
<a id="pl.16.2"></a><var>16.2</var>under subdivisions 1d, 1e, 1f, and 7 in the energy and conservation account in the <br/>
<a id="pl.16.3"></a><var>16.3</var>general special revenue fund. Money in the account is appropriated to the department <br/>
<a id="pl.16.4"></a><var>16.4</var>for programs designed to meet the energy conservation needs of low-income persons <br/>
<a id="pl.16.5"></a><var>16.5</var>and to make energy conservation improvements in areas not adequately served under <br/>
<a id="pl.16.6"></a><var>16.6</var>subdivision 2, including research and development projects included in the definition of <br/>
<a id="pl.16.7"></a><var>16.7</var>energy conservation improvement in subdivision 1 the purposes of subdivisions 1d, 1e, <br/>
<a id="pl.16.8"></a><var>16.8</var>1f, and 7. Interest on money in the account accrues to the account. Using information <br/>
<a id="pl.16.9"></a><var>16.9</var>collected under section 
<statute_ref>216C.02, subdivision 1, paragraph (b)</statute_ref>, the commissioner must, <br/>
<a id="pl.16.10"></a><var>16.10</var>to the extent possible, allocate enough money to programs for low-income persons to <br/>
<a id="pl.16.11"></a><var>16.11</var>assure that their needs are being adequately addressed. The commissioner must request <br/>
<a id="pl.16.12"></a><var>16.12</var>the commissioner of finance to transfer money from the account to the commissioner of <br/>
<a id="pl.16.13"></a><var>16.13</var>education for an energy conservation program for low-income persons. In establishing <br/>
<a id="pl.16.14"></a><var>16.14</var>programs, the commissioner must consult political subdivisions and nonprofit and <br/>
<a id="pl.16.15"></a><var>16.15</var>community organizations, especially organizations engaged in providing energy and <br/>
<a id="pl.16.16"></a><var>16.16</var>weatherization assistance to low-income persons. At least one program must address <br/>
<a id="pl.16.17"></a><var>16.17</var>the need for energy conservation improvements in areas in which a high percentage of <br/>
<a id="pl.16.18"></a><var>16.18</var>residents use fuel oil or propane to fuel their source of home heating. The commissioner <br/>
<a id="pl.16.19"></a><var>16.19</var>may contract with a political subdivision, a nonprofit or community organization, a public <br/>
<a id="pl.16.20"></a><var>16.20</var>utility, a municipality, or a cooperative electric association to implement its programs. The <br/>
<a id="pl.16.21"></a><var>16.21</var>commissioner may provide grants to any person to conduct research and development <br/>
<a id="pl.16.22"></a><var>16.22</var>projects in accordance with this section. <br/>
<a id="pl.16.23"></a><var>16.23</var>    Subd. 2b. <b>Recovery of expenses.</b> The commission shall allow a utility to recover <br/>
<a id="pl.16.24"></a><var>16.24</var>expenses resulting from a conservation improvement program required by the department <br/>
<a id="pl.16.25"></a><var>16.25</var>and contributions and assessments to the energy and conservation account, unless the <br/>
<a id="pl.16.26"></a><var>16.26</var>recovery would be inconsistent with a financial incentive proposal approved by the <br/>
<a id="pl.16.27"></a><var>16.27</var>commission. The commission shall allow a cooperative electric association subject <br/>
<a id="pl.16.28"></a><var>16.28</var>to rate regulation under section 216B.026, to recover expenses resulting from energy <br/>
<a id="pl.16.29"></a><var>16.29</var>conservation improvement programs, load management programs, and assessments <br/>
<a id="pl.16.30"></a><var>16.30</var>and contributions to the energy and conservation account unless the recovery would be <br/>
<a id="pl.16.31"></a><var>16.31</var>inconsistent with a financial incentive proposal approved by the commission. In addition, <br/>
<a id="pl.16.32"></a><var>16.32</var>a utility may file annually, or the Public Utilities Commission may require the utility <br/>
<a id="pl.16.33"></a><var>16.33</var>to file, and the commission may approve, rate schedules containing provisions for the <br/>
<a id="pl.16.34"></a><var>16.34</var>automatic adjustment of charges for utility service in direct relation to changes in the <br/>
<a id="pl.16.35"></a><var>16.35</var>expenses of the utility for real and personal property taxes, fees, and permits, the amounts <br/>
<a id="pl.16.36"></a><var>16.36</var>of which the utility cannot control. A public utility is eligible to file for adjustment for real <br/>
<a id="pl.17.1"></a><var>17.1</var>and personal property taxes, fees, and permits under this subdivision only if, in the year <br/>
<a id="pl.17.2"></a><var>17.2</var>previous to the year in which it files for adjustment, it has spent or invested at least 1.75 <br/>
<a id="pl.17.3"></a><var>17.3</var>percent of its gross revenues from provision of electric service, excluding gross operating <br/>
<a id="pl.17.4"></a><var>17.4</var>revenues from electric service provided in the state to large electric customer facilities for <br/>
<a id="pl.17.5"></a><var>17.5</var>which the commissioner has issued an exemption under subdivision 1a, paragraph (b), and <br/>
<a id="pl.17.6"></a><var>17.6</var>0.6 percent of its gross revenues from provision of gas service, excluding gross operating <br/>
<a id="pl.17.7"></a><var>17.7</var>revenues from gas services provided in the state to large electric customer facilities for <br/>
<a id="pl.17.8"></a><var>17.8</var>which the commissioner has issued an exemption under subdivision 1a, paragraph (b), for <br/>
<a id="pl.17.9"></a><var>17.9</var>that year for energy conservation improvements under this section. <br/>
<a id="pl.17.10"></a><var>17.10</var>    Subd. 2c. <b>Performance incentives.</b> By December 31, 2008, the commission <br/>
<a id="pl.17.11"></a><var>17.11</var>shall review any incentive plan for energy conservation improvement it has approved <br/>
<a id="pl.17.12"></a><var>17.12</var>under section 216B.16, subdivision 6c, and adjust the utility performance incentives to <br/>
<a id="pl.17.13"></a><var>17.13</var>recognize making progress toward and meeting the energy savings goals established <br/>
<a id="pl.17.14"></a><var>17.14</var>in subdivision 1c.<br/>
<a id="pl.17.15"></a><var>17.15</var>    Subd. 3. <b>Ownership of energy conservation improvement.</b> An energy <br/>
<a id="pl.17.16"></a><var>17.16</var>conservation improvement made to or installed in a building in accordance with this <br/>
<a id="pl.17.17"></a><var>17.17</var>section, except systems owned by the utility and designed to turn off, limit, or vary the <br/>
<a id="pl.17.18"></a><var>17.18</var>delivery of energy, are the exclusive property of the owner of the building except to the <br/>
<a id="pl.17.19"></a><var>17.19</var>extent that the improvement is subjected to a security interest in favor of the utility in case <br/>
<a id="pl.17.20"></a><var>17.20</var>of a loan to the building owner. The utility has no liability for loss, damage or injury <br/>
<a id="pl.17.21"></a><var>17.21</var>caused directly or indirectly by an energy conservation improvement except for negligence <br/>
<a id="pl.17.22"></a><var>17.22</var>by the utility in purchase, installation, or modification of the product.<br/>
<a id="pl.17.23"></a><var>17.23</var>    Subd. 4. <b>Federal law prohibitions.</b> If investments by public utilities in energy <br/>
<a id="pl.17.24"></a><var>17.24</var>conservation improvements are in any manner prohibited or restricted by federal law <br/>
<a id="pl.17.25"></a><var>17.25</var>and there is a provision under which the prohibition or restriction may be waived, then <br/>
<a id="pl.17.26"></a><var>17.26</var>the commission, the governor, or any other necessary state agency or officer shall take <br/>
<a id="pl.17.27"></a><var>17.27</var>all necessary and appropriate steps to secure a waiver with respect to those public utility <br/>
<a id="pl.17.28"></a><var>17.28</var>investments in energy conservation improvements included in this section.<br/>
<a id="pl.17.29"></a><var>17.29</var>    Subd. 5. <b>Efficient lighting program.</b> (a) Each public utility, cooperative electric <br/>
<a id="pl.17.30"></a><var>17.30</var>association, and municipal utility that provides electric service to retail customers shall <br/>
<a id="pl.17.31"></a><var>17.31</var>include as part of its conservation improvement activities a program to strongly encourage <br/>
<a id="pl.17.32"></a><var>17.32</var>the use of fluorescent and high-intensity discharge lamps. The program must include at <br/>
<a id="pl.17.33"></a><var>17.33</var>least a public information campaign to encourage use of the lamps and proper management <br/>
<a id="pl.17.34"></a><var>17.34</var>of spent lamps by all customer classifications.<br/>
<a id="pl.17.35"></a><var>17.35</var>    (b) A public utility that provides electric service at retail to 200,000 or more <br/>
<a id="pl.17.36"></a><var>17.36</var>customers shall establish, either directly or through contracts with other persons, including <br/>
<a id="pl.18.1"></a><var>18.1</var>lamp manufacturers, distributors, wholesalers, and retailers and local government units, a <br/>
<a id="pl.18.2"></a><var>18.2</var>system to collect for delivery to a reclamation or recycling facility spent fluorescent and <br/>
<a id="pl.18.3"></a><var>18.3</var>high-intensity discharge lamps from households and from small businesses as defined in <br/>
<a id="pl.18.4"></a><var>18.4</var>section 
         <statute_ref>645.445</statute_ref> that generate an average of fewer than ten spent lamps per year. <br/>
<a id="pl.18.5"></a><var>18.5</var>    (c) A collection system must include establishing reasonably convenient locations <br/>
<a id="pl.18.6"></a><var>18.6</var>for collecting spent lamps from households and financial incentives sufficient to encourage <br/>
<a id="pl.18.7"></a><var>18.7</var>spent lamp generators to take the lamps to the collection locations. Financial incentives <br/>
<a id="pl.18.8"></a><var>18.8</var>may include coupons for purchase of new fluorescent or high-intensity discharge lamps, <br/>
<a id="pl.18.9"></a><var>18.9</var>a cash back system, or any other financial incentive or group of incentives designed to <br/>
<a id="pl.18.10"></a><var>18.10</var>collect the maximum number of spent lamps from households and small businesses that is <br/>
<a id="pl.18.11"></a><var>18.11</var>reasonably feasible.<br/>
<a id="pl.18.12"></a><var>18.12</var>    (d) A public utility that provides electric service at retail to fewer than 200,000 <br/>
<a id="pl.18.13"></a><var>18.13</var>customers, a cooperative electric association, or a municipal utility that provides electric <br/>
<a id="pl.18.14"></a><var>18.14</var>service at retail to customers may establish a collection system under paragraphs (b) and <br/>
<a id="pl.18.15"></a><var>18.15</var>(c) as part of conservation improvement activities required under this section.<br/>
<a id="pl.18.16"></a><var>18.16</var>    (e) The commissioner of the Pollution Control Agency may not, unless clearly <br/>
<a id="pl.18.17"></a><var>18.17</var>required by federal law, require a public utility, cooperative electric association, or <br/>
<a id="pl.18.18"></a><var>18.18</var>municipality that establishes a household fluorescent and high-intensity discharge lamp <br/>
<a id="pl.18.19"></a><var>18.19</var>collection system under this section to manage the lamps as hazardous waste as long as <br/>
<a id="pl.18.20"></a><var>18.20</var>the lamps are managed to avoid breakage and are delivered to a recycling or reclamation <br/>
<a id="pl.18.21"></a><var>18.21</var>facility that removes mercury and other toxic materials contained in the lamps prior to <br/>
<a id="pl.18.22"></a><var>18.22</var>placement of the lamps in solid waste.<br/>
<a id="pl.18.23"></a><var>18.23</var>    (f) If a public utility, cooperative electric association, or municipal utility contracts <br/>
<a id="pl.18.24"></a><var>18.24</var>with a local government unit to provide a collection system under this subdivision, <br/>
<a id="pl.18.25"></a><var>18.25</var>the contract must provide for payment to the local government unit of all the unit's <br/>
<a id="pl.18.26"></a><var>18.26</var>incremental costs of collecting and managing spent lamps.<br/>
<a id="pl.18.27"></a><var>18.27</var>    (g) All the costs incurred by a public utility, cooperative electric association, or <br/>
<a id="pl.18.28"></a><var>18.28</var>municipal utility for promotion and collection of fluorescent and high-intensity discharge <br/>
<a id="pl.18.29"></a><var>18.29</var>lamps under this subdivision are conservation improvement spending under this section.<br/>
<a id="pl.18.30"></a><var>18.30</var>    Subd. 6. <b>Renewable energy research.</b> (a) A public utility that owns a nuclear <br/>
<a id="pl.18.31"></a><var>18.31</var>generation facility in the state shall spend five percent of the total amount that utility <br/>
<a id="pl.18.32"></a><var>18.32</var>is required to spend under this section to support basic and applied research and <br/>
<a id="pl.18.33"></a><var>18.33</var>demonstration activities at the University of Minnesota Initiative for Renewable Energy <br/>
<a id="pl.18.34"></a><var>18.34</var>and the Environment for the development of renewable energy sources and technologies. <br/>
<a id="pl.18.35"></a><var>18.35</var>The utility shall transfer the required amount to the University of Minnesota on or before <br/>
<a id="pl.18.36"></a><var>18.36</var>July 1 of each year and that annual amount shall be deducted from the amount of money the <br/>
<a id="pl.19.1"></a><var>19.1</var>utility is required to spend under this section. The University of Minnesota shall transfer <br/>
<a id="pl.19.2"></a><var>19.2</var>at least ten percent of these funds to at least one rural campus or experiment station.<br/>
<a id="pl.19.3"></a><var>19.3</var>    (b) Research funded under this subdivision shall include:<br/>
<a id="pl.19.4"></a><var>19.4</var>    (1) development of environmentally sound production, distribution, and use of <br/>
<a id="pl.19.5"></a><var>19.5</var>energy, chemicals, and materials from renewable sources;<br/>
<a id="pl.19.6"></a><var>19.6</var>    (2) processing and utilization of agricultural and forestry plant products and other <br/>
<a id="pl.19.7"></a><var>19.7</var>bio-based, renewable sources as a substitute for fossil-fuel-based energy, chemicals, and <br/>
<a id="pl.19.8"></a><var>19.8</var>materials using a variety of means including biocatalysis, biorefining, and fermentation;<br/>
<a id="pl.19.9"></a><var>19.9</var>    (3) conversion of state wind resources to hydrogen for energy storage and <br/>
<a id="pl.19.10"></a><var>19.10</var>transportation to areas of energy demand;<br/>
<a id="pl.19.11"></a><var>19.11</var>    (4) improvements in scalable hydrogen fuel cell technologies; and<br/>
<a id="pl.19.12"></a><var>19.12</var>    (5) production of hydrogen from bio-based, renewable sources; and sequestration <br/>
<a id="pl.19.13"></a><var>19.13</var>of carbon.<br/>
<a id="pl.19.14"></a><var>19.14</var>    (c) Notwithstanding other law to the contrary, the utility may, but is not required to, <br/>
<a id="pl.19.15"></a><var>19.15</var>spend more than two percent of its gross operating revenues from service provided in this <br/>
<a id="pl.19.16"></a><var>19.16</var>state under this section or section 
         <statute_ref>216B.2411</statute_ref>. <br/>
<a id="pl.19.17"></a><var>19.17</var>    (d) This subdivision expires June 30, 2008.<br/>
<a id="pl.19.18"></a><var>19.18</var>    Subd. 7. <b>Low-income programs.</b> (a) The commissioner shall ensure that each <br/>
<a id="pl.19.19"></a><var>19.19</var>utility and association provides low-income programs. When approving spending and <br/>
<a id="pl.19.20"></a><var>19.20</var>energy savings goals for low-income programs, the commissioner shall consider historic <br/>
<a id="pl.19.21"></a><var>19.21</var>spending and participation levels, energy savings for low-income programs, and the <br/>
<a id="pl.19.22"></a><var>19.22</var>number of low-income persons residing in the utility's service territory. A utility that <br/>
<a id="pl.19.23"></a><var>19.23</var>furnishes gas service must spend at least 0.2 percent of its gross operating revenue from <br/>
<a id="pl.19.24"></a><var>19.24</var>residential customers in the state on low-income programs. A utility or association that <br/>
<a id="pl.19.25"></a><var>19.25</var>furnishes electric service must spend at least 0.1 percent of its gross operating revenue <br/>
<a id="pl.19.26"></a><var>19.26</var>from residential customers in the state on low-income programs. For a generation and <br/>
<a id="pl.19.27"></a><var>19.27</var>transmission cooperative association, this requirement shall apply to each association's <br/>
<a id="pl.19.28"></a><var>19.28</var>members' aggregate gross operating revenue from sale of electricity to residential <br/>
<a id="pl.19.29"></a><var>19.29</var>customers in the state. Beginning in 2010, a utility or association that furnishes electric <br/>
<a id="pl.19.30"></a><var>19.30</var>service must spend 0.2 percent of its gross operating revenue from residential customers <br/>
<a id="pl.19.31"></a><var>19.31</var>in the state on low-income programs.<br/>
<a id="pl.19.32"></a><var>19.32</var>    (b) To meet the requirements of paragraph (a), a utility or association may contribute <br/>
<a id="pl.19.33"></a><var>19.33</var>funds to the energy and conservation account. An energy conservation improvement plan <br/>
<a id="pl.19.34"></a><var>19.34</var>must state the amount, if any, of low-income energy conservation improvement funds the <br/>
<a id="pl.19.35"></a><var>19.35</var>utility or association will contribute to the energy and conservation account. Contributions <br/>
<a id="pl.19.36"></a><var>19.36</var>must be remitted to the commissioner by February 1 of each year.<br/>
<a id="pl.20.1"></a><var>20.1</var>    (c) The commissioner shall establish low-income programs to utilize funds <br/>
<a id="pl.20.2"></a><var>20.2</var>contributed to the energy and conservation account under paragraph (b). In establishing <br/>
<a id="pl.20.3"></a><var>20.3</var>low-income programs, the commissioner shall consult political subdivisions, utilities, and <br/>
<a id="pl.20.4"></a><var>20.4</var>nonprofit and community organizations, especially organizations engaged in providing <br/>
<a id="pl.20.5"></a><var>20.5</var>energy and weatherization assistance to low-income persons. Money contributed to <br/>
<a id="pl.20.6"></a><var>20.6</var>the energy and conservation account under paragraph (b) must provide programs for <br/>
<a id="pl.20.7"></a><var>20.7</var>low-income persons, including low-income renters, in the service territory of the utility or <br/>
<a id="pl.20.8"></a><var>20.8</var>association providing the funds. The commissioner shall record and report expenditures <br/>
<a id="pl.20.9"></a><var>20.9</var>and energy savings achieved as a result of low-income programs funded through the <br/>
<a id="pl.20.10"></a><var>20.10</var>energy and conservation account in the report required under subdivision 1c, paragraph <br/>
<a id="pl.20.11"></a><var>20.11</var>(g). The commissioner may contract with a political subdivision, nonprofit or community <br/>
<a id="pl.20.12"></a><var>20.12</var>organization, public utility, municipality, or cooperative electric association to implement <br/>
<a id="pl.20.13"></a><var>20.13</var>low-income programs funded through the energy and conservation account.<br/>
<a id="pl.20.14"></a><var>20.14</var>    (d) A utility or association may petition the commissioner to modify its required <br/>
<a id="pl.20.15"></a><var>20.15</var>spending under paragraph (a) if the utility or association and the commissioner have been <br/>
<a id="pl.20.16"></a><var>20.16</var>unable to expend the amount required under paragraph (a) for three consecutive years.<br/>
<a id="pl.20.17"></a><var>20.17</var>    Subd. 8. <b>Assessment.</b> The commission or department may assess utilities subject to <br/>
<a id="pl.20.18"></a><var>20.18</var>this section in proportion to their respective gross operating revenue from sales of gas or <br/>
<a id="pl.20.19"></a><var>20.19</var>electric service within the state during the last calendar year to carry out the purposes of <br/>
<a id="pl.20.20"></a><var>20.20</var>subdivisions 1d, 1e, and 1f. Those assessments are not subject to the cap on assessments <br/>
<a id="pl.20.21"></a><var>20.21</var>provided by section 216B.62, or any other law.<br/>
<br/>
<a id="bill.2.6.0"></a><a id="pl.20.22"></a><var>20.22</var>    Sec. 6. <b>[216B.2412] DECOUPLING OF ENERGY SALES FROM REVENUES.</b><br/>
<a id="pl.20.23"></a><var>20.23</var>    Subdivision 1. <b>Definition and purpose.</b> For the purpose of this section, <br/>
<a id="pl.20.24"></a><var>20.24</var>"decoupling" means a regulatory tool designed to separate a utility's revenue from changes <br/>
<a id="pl.20.25"></a><var>20.25</var>in energy sales. The purpose of decoupling is to reduce a utility's disincentive to promote <br/>
<a id="pl.20.26"></a><var>20.26</var>energy efficiency.<br/>
<a id="pl.20.27"></a><var>20.27</var>    Subd. 2. <b>Decoupling criteria.</b> The commission shall, by order, establish criteria <br/>
<a id="pl.20.28"></a><var>20.28</var>and standards for decoupling. The commission shall design the criteria and standards to <br/>
<a id="pl.20.29"></a><var>20.29</var>mitigate the impact on public utilities of the energy savings goals under section 216B.241 <br/>
<a id="pl.20.30"></a><var>20.30</var>without adversely affecting utility ratepayers.  In designing the criteria, the commission <br/>
<a id="pl.20.31"></a><var>20.31</var>shall consider energy efficiency, weather, and cost of capital, among other factors.<br/>
<a id="pl.20.32"></a><var>20.32</var>    Subd. 3. <b>Pilot programs.</b> The commission shall allow one or more rate-regulated <br/>
<a id="pl.20.33"></a><var>20.33</var>utilities to participate in a pilot program to assess the merits of a rate-decoupling strategy <br/>
<a id="pl.20.34"></a><var>20.34</var>to promote energy efficiency and conservation. Each pilot program must utilize the <br/>
<a id="pl.20.35"></a><var>20.35</var>criteria and standards established in subdivision 2 and be designed to determine whether <br/>
<a id="pl.21.1"></a><var>21.1</var>a rate-decoupling strategy achieves energy savings. On or before a date established by <br/>
<a id="pl.21.2"></a><var>21.2</var>the commission, the commission shall require electric and gas utilities that intend to <br/>
<a id="pl.21.3"></a><var>21.3</var>implement a decoupling program to file a decoupling pilot plan which shall be approved <br/>
<a id="pl.21.4"></a><var>21.4</var>or approved as modified by the commission. A pilot program may not exceed three years <br/>
<a id="pl.21.5"></a><var>21.5</var>in length. Any extension beyond three years can only be approved in a general rate case, <br/>
<a id="pl.21.6"></a><var>21.6</var>unless that decoupling program was previously approved as part of a general rate case. <br/>
<a id="pl.21.7"></a><var>21.7</var>The commission shall report on the programs annually to the chairs of the house of <br/>
<a id="pl.21.8"></a><var>21.8</var>representatives and senate committees with primary jurisdiction over energy policy.<br/>
<br/>
<a id="bill.2.7.0"></a><a id="pl.21.9"></a><var>21.9</var>    Sec. 7. <b>REVISOR'S INSTRUCTION.</b><br/>
<a id="pl.21.10"></a><var>21.10</var>    The revisor of statutes shall change the reference to "section 216B.241, subdivision <br/>
<a id="pl.21.11"></a><var>21.11</var>1, paragraph (i)" found in section 216B.2411, subdivision 1, to read "section 216B.241, <br/>
<a id="pl.21.12"></a><var>21.12</var>subdivision 1."<br/>
<br/>
<a id="bill.2.8.0"></a><a id="pl.21.13"></a><var>21.13</var>    Sec. 8. <b>EFFECTIVE DATE.</b><br/>
<a id="pl.21.14"></a><var>21.14</var>    This article is effective July 1, 2007.<br/>
<br/>
<a id="bill.3.0.0"></a>

<a id="bill.3.1.0"></a><a id="pl.21.17"></a><var>21.17</var>    Section 1. Minnesota Statutes 2006, section 123B.65, subdivision 2, is amended to read:<br/>
<a id="pl.21.18"></a><var>21.18</var>    Subd. 2. <b>Energy efficiency contract.</b> (a) Notwithstanding any law to the contrary, <br/>
<a id="pl.21.19"></a><var>21.19</var>a school district may enter into a guaranteed energy savings contract with a qualified <br/>
<a id="pl.21.20"></a><var>21.20</var>provider to significantly reduce energy or operating costs.<br/>
<a id="pl.21.21"></a><var>21.21</var>    (b) Before entering into a contract under this subdivision, the board shall comply <br/>
<a id="pl.21.22"></a><var>21.22</var>with clauses (1) to (5).<br/>
<a id="pl.21.23"></a><var>21.23</var>    (1) The board must seek proposals from multiple qualified providers by publishing <br/>
<a id="pl.21.24"></a><var>21.24</var>notice of the proposed guaranteed energy savings contract in the board's official newspaper <br/>
<a id="pl.21.25"></a><var>21.25</var>and in other publications if the board determines that additional publication is necessary to <br/>
<a id="pl.21.26"></a><var>21.26</var>notify multiple qualified providers.<br/>
<a id="pl.21.27"></a><var>21.27</var>    (2) The school board must select the qualified provider that best meets the needs of <br/>
<a id="pl.21.28"></a><var>21.28</var>the board. The board must provide public notice of the meeting at which it will select the <br/>
<a id="pl.21.29"></a><var>21.29</var>qualified provider.<br/>
<a id="pl.21.30"></a><var>21.30</var>    (3) The contract between the board and the qualified provider must describe the <br/>
<a id="pl.21.31"></a><var>21.31</var>methods that will be used to calculate the costs of the contract and the operational and <br/>
<a id="pl.21.32"></a><var>21.32</var>energy savings attributable to the contract.<br/>
<a id="pl.22.1"></a><var>22.1</var>    (4) The qualified provider shall issue a report to the board giving a description of all <br/>
<a id="pl.22.2"></a><var>22.2</var>costs of installations, modifications, or remodeling, including costs of design, engineering, <br/>
<a id="pl.22.3"></a><var>22.3</var>installation, maintenance, repairs, or debt service, and giving detailed calculations of the <br/>
<a id="pl.22.4"></a><var>22.4</var>amounts by which energy or operating costs will be reduced and the projected payback <br/>
<a id="pl.22.5"></a><var>22.5</var>schedule in years.<br/>
<a id="pl.22.6"></a><var>22.6</var>    (5) The board must provide published notice of the meeting in which it proposes to <br/>
<a id="pl.22.7"></a><var>22.7</var>award the contract, the names of the parties to the proposed contract, and the contract's <br/>
<a id="pl.22.8"></a><var>22.8</var>purpose.<br/>
<a id="pl.22.9"></a><var>22.9</var>    (c) The board must provide a copy of any contract entered into under paragraph (a) <br/>
<a id="pl.22.10"></a><var>22.10</var>and the report provided under paragraph (b), clause (4), to the commissioner of commerce <br/>
<a id="pl.22.11"></a><var>22.11</var>within 30 days of the effective date of the contract.<br/>
<br/>
<a id="bill.3.2.0"></a><a id="pl.22.12"></a><var>22.12</var>    Sec. 2. Minnesota Statutes 2006, section 216C.31, is amended to read:<br/>
<a id="pl.22.13"></a><var>22.13</var><b>216C.31 ENERGY AUDIT PROGRAMS.</b><br/>
<a id="pl.22.14"></a><var>22.14</var>    The commissioner shall develop and administer state programs of energy audits of <br/>
<a id="pl.22.15"></a><var>22.15</var>residential and commercial buildings including those required by United States Code, title <br/>
<a id="pl.22.16"></a><var>22.16</var>42, sections 8211 to 8222 and sections 8281 to 8284. The commissioner shall continue <br/>
<a id="pl.22.17"></a><var>22.17</var>to administer the residential energy audit program as originally established under the <br/>
<a id="pl.22.18"></a><var>22.18</var>provisions of United States Code, title 42, sections 8211 to 8222; through July 1, 1986 <br/>
<a id="pl.22.19"></a><var>22.19</var>irrespective of any prior expiration date provided in United States Code, title 42, section <br/>
<a id="pl.22.20"></a><var>22.20</var>8216. The commissioner may approve temporary programs if they are likely to result <br/>
<a id="pl.22.21"></a><var>22.21</var>in the installation of as many conservation measures as would have been installed had <br/>
<a id="pl.22.22"></a><var>22.22</var>the utility met the requirements of United States Code, title 42, sections 8211 to 8222. <br/>
<a id="pl.22.23"></a><var>22.23</var>The Consumer Services Division and the attorney general may release information on <br/>
<a id="pl.22.24"></a><var>22.24</var>consumer comments about the operation of the program to the commissioner the training <br/>
<a id="pl.22.25"></a><var>22.25</var>and qualifications necessary for the auditing of residential and commercial buildings under <br/>
<a id="pl.22.26"></a><var>22.26</var>the auspices of a program created under section 216B.2412.<br/>
<br/>
<a id="bill.3.3.0"></a><a id="pl.22.27"></a><var>22.27</var>    Sec. 3. Minnesota Statutes 2006, section 471.345, subdivision 13, is amended to read:<br/>
<a id="pl.22.28"></a><var>22.28</var>    Subd. 13. <b>Energy efficiency projects.</b> The following definitions apply to this <br/>
<a id="pl.22.29"></a><var>22.29</var>subdivision.<br/>
<a id="pl.22.30"></a><var>22.30</var>    (a) "Energy conservation measure" means a training program or facility alteration <br/>
<a id="pl.22.31"></a><var>22.31</var>designed to reduce energy consumption or operating costs and includes:<br/>
<a id="pl.22.32"></a><var>22.32</var>    (1) insulation of the building structure and systems within the building;<br/>
<a id="pl.22.33"></a><var>22.33</var>    (2) storm windows and doors, caulking or weatherstripping, multiglazed windows <br/>
<a id="pl.22.34"></a><var>22.34</var>and doors, heat absorbing or heat reflective glazed and coated window and door <br/>
<a id="pl.23.1"></a><var>23.1</var>systems, additional glazing, reductions in glass area, and other window and door system <br/>
<a id="pl.23.2"></a><var>23.2</var>modifications that reduce energy consumption;<br/>
<a id="pl.23.3"></a><var>23.3</var>    (3) automatic energy control systems;<br/>
<a id="pl.23.4"></a><var>23.4</var>    (4) heating, ventilating, or air conditioning system modifications or replacements;<br/>
<a id="pl.23.5"></a><var>23.5</var>    (5) replacement or modifications of lighting fixtures to increase the energy efficiency <br/>
<a id="pl.23.6"></a><var>23.6</var>of the lighting system without increasing the overall illumination of a facility, unless an <br/>
<a id="pl.23.7"></a><var>23.7</var>increase in illumination is necessary to conform to the applicable state or local building <br/>
<a id="pl.23.8"></a><var>23.8</var>code for the lighting system after the proposed modifications are made;<br/>
<a id="pl.23.9"></a><var>23.9</var>    (6) energy recovery systems;<br/>
<a id="pl.23.10"></a><var>23.10</var>    (7) cogeneration systems that produce steam or forms of energy such as heat, as well <br/>
<a id="pl.23.11"></a><var>23.11</var>as electricity, for use primarily within a building or complex of buildings;<br/>
<a id="pl.23.12"></a><var>23.12</var>    (8) energy conservation measures that provide long-term operating cost reductions.<br/>
<a id="pl.23.13"></a><var>23.13</var>    (b) "Guaranteed energy savings contract" means a contract for the evaluation <br/>
<a id="pl.23.14"></a><var>23.14</var>and recommendations of energy conservation measures, and for one or more energy <br/>
<a id="pl.23.15"></a><var>23.15</var>conservation measures. The contract must provide that all payments, except obligations <br/>
<a id="pl.23.16"></a><var>23.16</var>on termination of the contract before its expiration, are to be made over time, but not to <br/>
<a id="pl.23.17"></a><var>23.17</var>exceed 15 years from the date of final installation, and the savings are guaranteed to the <br/>
<a id="pl.23.18"></a><var>23.18</var>extent necessary to make payments for the systems.<br/>
<a id="pl.23.19"></a><var>23.19</var>    (c) "Qualified provider" means a person or business experienced in the design, <br/>
<a id="pl.23.20"></a><var>23.20</var>implementation, and installation of energy conservation measures. A qualified provider <br/>
<a id="pl.23.21"></a><var>23.21</var>to whom the contract is awarded shall give a sufficient bond to the municipality for its <br/>
<a id="pl.23.22"></a><var>23.22</var>faithful performance.<br/>
<a id="pl.23.23"></a><var>23.23</var>    Notwithstanding any law to the contrary, a municipality may enter into a guaranteed <br/>
<a id="pl.23.24"></a><var>23.24</var>energy savings contract with a qualified provider to significantly reduce energy or <br/>
<a id="pl.23.25"></a><var>23.25</var>operating costs.<br/>
<a id="pl.23.26"></a><var>23.26</var>    Before entering into a contract under this subdivision, the municipality shall provide <br/>
<a id="pl.23.27"></a><var>23.27</var>published notice of the meeting in which it proposes to award the contract, the names of <br/>
<a id="pl.23.28"></a><var>23.28</var>the parties to the proposed contract, and the contract's purpose.<br/>
<a id="pl.23.29"></a><var>23.29</var>    Before installation of equipment, modification, or remodeling, the qualified provider <br/>
<a id="pl.23.30"></a><var>23.30</var>shall first issue a report, summarizing estimates of all costs of installations, modifications, <br/>
<a id="pl.23.31"></a><var>23.31</var>or remodeling, including costs of design, engineering, installation, maintenance, repairs, <br/>
<a id="pl.23.32"></a><var>23.32</var>or debt service, and estimates of the amounts by which energy or operating costs will be <br/>
<a id="pl.23.33"></a><var>23.33</var>reduced.<br/>
<a id="pl.23.34"></a><var>23.34</var>    A guaranteed energy savings contract that includes a written guarantee that savings <br/>
<a id="pl.23.35"></a><var>23.35</var>will meet or exceed the cost of energy conservation measures is not subject to competitive <br/>
<a id="pl.24.1"></a><var>24.1</var>bidding requirements of section 
         <statute_ref>471.345</statute_ref> or other law or city charter. The contract is <br/>
<a id="pl.24.2"></a><var>24.2</var>not subject to section 
         <statute_ref>123B.52</statute_ref>. <br/>
<a id="pl.24.3"></a><var>24.3</var>    A municipality may enter into a guaranteed energy savings contract with a qualified <br/>
<a id="pl.24.4"></a><var>24.4</var>provider if, after review of the report, it finds that the amount it would spend on the energy <br/>
<a id="pl.24.5"></a><var>24.5</var>conservation measures recommended in the report is not likely to exceed the amount <br/>
<a id="pl.24.6"></a><var>24.6</var>to be saved in energy and operation costs over 15 years from the date of installation if <br/>
<a id="pl.24.7"></a><var>24.7</var>the recommendations in the report were followed, and the qualified provider provides a <br/>
<a id="pl.24.8"></a><var>24.8</var>written guarantee that the energy or operating cost savings will meet or exceed the costs <br/>
<a id="pl.24.9"></a><var>24.9</var>of the system. The guaranteed energy savings contract may provide for payments over <br/>
<a id="pl.24.10"></a><var>24.10</var>a period of time, not to exceed 15 years.<br/>
<a id="pl.24.11"></a><var>24.11</var>    A municipality may enter into an installment payment contract for the purchase and <br/>
<a id="pl.24.12"></a><var>24.12</var>installation of energy conservation measures. The contract must provide for payments <br/>
<a id="pl.24.13"></a><var>24.13</var>of not less than 1/15 of the price to be paid within two years from the date of the first <br/>
<a id="pl.24.14"></a><var>24.14</var>operation, and the remaining costs to be paid monthly, not to exceed a 15-year term from <br/>
<a id="pl.24.15"></a><var>24.15</var>the date of the first operation.<br/>
<a id="pl.24.16"></a><var>24.16</var>    A municipality entering into a guaranteed energy savings contract shall provide a <br/>
<a id="pl.24.17"></a><var>24.17</var>copy of the contract and the report from the qualified provider to the commissioner of <br/>
<a id="pl.24.18"></a><var>24.18</var>commerce within 30 days of the effective date of the contract.<br/>
<a id="pl.24.19"></a><var>24.19</var>    Guaranteed energy savings contracts may extend beyond the fiscal year in which <br/>
<a id="pl.24.20"></a><var>24.20</var>they become effective. The municipality shall include in its annual appropriations measure <br/>
<a id="pl.24.21"></a><var>24.21</var>for each later fiscal year any amounts payable under guaranteed energy savings contracts <br/>
<a id="pl.24.22"></a><var>24.22</var>during the year. Failure of a municipality to make such an appropriation does not affect <br/>
<a id="pl.24.23"></a><var>24.23</var>the validity of the guaranteed energy savings contract or the municipality's obligations <br/>
<a id="pl.24.24"></a><var>24.24</var>under the contracts.<br/>
<br/>
<a id="bill.3.4.0"></a><a id="pl.24.25"></a><var>24.25</var>    Sec. 4. Minnesota Statutes 2006, section 504B.161, subdivision 1, is amended to read:<br/>
<a id="pl.24.26"></a><var>24.26</var>    Subdivision 1. <b>Requirements.</b> (a) In every lease or license of residential premises, <br/>
<a id="pl.24.27"></a><var>24.27</var>the landlord or licensor covenants:<br/>
<a id="pl.24.28"></a><var>24.28</var>    (1) that the premises and all common areas are fit for the use intended by the parties;<br/>
<a id="pl.24.29"></a><var>24.29</var>    (2) to keep the premises in reasonable repair during the term of the lease or license, <br/>
<a id="pl.24.30"></a><var>24.30</var>except when the disrepair has been caused by the willful, malicious, or irresponsible <br/>
<a id="pl.24.31"></a><var>24.31</var>conduct of the tenant or licensee or a person under the direction or control of the tenant or <br/>
<a id="pl.24.32"></a><var>24.32</var>licensee; and<br/>
<a id="pl.24.33"></a><var>24.33</var>    (3) to make the premises reasonably energy efficient by installing weatherstripping, <br/>
<a id="pl.24.34"></a><var>24.34</var>caulking, storm windows, and storm doors when any such measure will result in energy <br/>
<a id="pl.24.35"></a><var>24.35</var>procurement cost savings, based on current and projected average residential energy costs <br/>
<a id="pl.25.1"></a><var>25.1</var>in Minnesota, that will exceed the cost of implementing that measure, including interest, <br/>
<a id="pl.25.2"></a><var>25.2</var>amortized over the ten-year period following the incurring of the cost; and <br/>
<a id="pl.25.3"></a><var>25.3</var>    (4) to maintain the premises in compliance with the applicable health and safety <br/>
<a id="pl.25.4"></a><var>25.4</var>laws of the state, including the weatherstripping, caulking, storm window, and storm door <br/>
<a id="pl.25.5"></a><var>25.5</var>energy efficiency standards for renter-occupied residences prescribed by section 
<statute_ref>216C.27, <br/>
<a id="pl.25.6"></a><var>25.6</var>subdivisions 1 and 3
</statute_ref>, and of the local units of government where the premises are located <br/>
<a id="pl.25.7"></a><var>25.7</var>during the term of the lease or license, except when violation of the health and safety <br/>
<a id="pl.25.8"></a><var>25.8</var>laws has been caused by the willful, malicious, or irresponsible conduct of the tenant or <br/>
<a id="pl.25.9"></a><var>25.9</var>licensee or a person under the direction or control of the tenant or licensee. <br/>
<a id="pl.25.10"></a><var>25.10</var>    (b) The parties to a lease or license of residential premises may not waive or modify <br/>
<a id="pl.25.11"></a><var>25.11</var>the covenants imposed by this section.<br/>
<br/>
<a id="bill.3.5.0"></a><a id="pl.25.12"></a><var>25.12</var>    Sec. 5. <b> REPEALER.</b><br/>
<a id="pl.25.13"></a><var>25.13</var>Minnesota Statutes 2006, sections 216B.165; 216C.27; and 216C.30, subdivision 5, <br/>
<a id="pl.25.14"></a><var>25.14</var>and Minnesota Rules, parts 7635.0100; 7635.0110; 7635.0120; 7635.0130; 7635.0140; <br/>
<a id="pl.25.15"></a><var>25.15</var>7635.0150; 7635.0160; 7635.0170; 7635.0180; 7635.0200; 7635.0210; 7635.0220; <br/>
<a id="pl.25.16"></a><var>25.16</var>7635.0230; 7635.0240; 7635.0250; 7635.0260; 7635.0300; 7635.0310; 7635.0320; <br/>
<a id="pl.25.17"></a><var>25.17</var>7635.0330; 7635.0340; 7635.0400; 7635.0410; 7635.0420; 7635.0500; 7635.0510; <br/>
<a id="pl.25.18"></a><var>25.18</var>7635.0520; 7635.0530; 7635.0600; 7635.0610; 7635.0620; 7635.0630; 7635.0640; <br/>
<a id="pl.25.19"></a><var>25.19</var>7635.1000; 7635.1010; 7635.1020; 7635.1030; 7655.0100; 7655.0120; 7655.0200; <br/>
<a id="pl.25.20"></a><var>25.20</var>7655.0210; 7655.0220; 7655.0230; 7655.0240; 7655.0250; 7655.0260; 7655.0270; <br/>
<a id="pl.25.21"></a><var>25.21</var>7655.0280; 7655.0290; 7655.0300; 7655.0310; 7655.0320; 7655.0330; 7655.0400; <br/>
<a id="pl.25.22"></a><var>25.22</var>7655.0410; and 7655.0420, are repealed, effective July 1, 2007.<br/>
<br/>
<a id="bill.3.6.0"></a><a id="pl.25.23"></a><var>25.23</var>    Sec. 6. <b>EFFECTIVE DATE.</b><br/>
<a id="pl.25.24"></a><var>25.24</var>    This article is effective July 1, 2007.<br/>
<br/>
<a id="bill.4.0.0"></a>

<a id="bill.4.1.0"></a><a id="pl.25.27"></a><var>25.27</var>    Section 1. <b>CITATION.</b><br/>
<a id="pl.25.28"></a><var>25.28</var>    This article may be cited as the Community-Based Energy Development Act of 2007.<br/>
<br/>
<a id="bill.4.2.0"></a><a id="pl.25.29"></a><var>25.29</var>    Sec. 2. Minnesota Statutes 2006, section 216B.1612, is amended to read:<br/>
<a id="pl.25.30"></a><var>25.30</var><b>216B.1612 COMMUNITY-BASED ENERGY DEVELOPMENT; TARIFF.</b><br/>
<a id="pl.25.31"></a><var>25.31</var>    Subdivision 1. <b>Tariff establishment.</b> A tariff shall be established to optimize local, <br/>
<a id="pl.25.32"></a><var>25.32</var>regional, and state benefits from wind renewable energy development and to facilitate <br/>
<a id="pl.26.1"></a><var>26.1</var>widespread development of community-based wind renewable energy projects throughout <br/>
<a id="pl.26.2"></a><var>26.2</var>Minnesota.<br/>
<a id="pl.26.3"></a><var>26.3</var>    Subd. 2. <b>Definitions.</b> (a) The terms used in this section have the meanings given <br/>
<a id="pl.26.4"></a><var>26.4</var>them in this subdivision.<br/>
<a id="pl.26.5"></a><var>26.5</var>    (b) "C-BED tariff" or "tariff" means a community-based energy development tariff.<br/>
<a id="pl.26.6"></a><var>26.6</var>    (c) "Qualifying owner" means:<br/>
<a id="pl.26.7"></a><var>26.7</var>    (1) a Minnesota resident;<br/>
<a id="pl.26.8"></a><var>26.8</var>    (2) a limited liability  company that is organized under the laws of this state chapter <br/>
<a id="pl.26.9"></a><var>26.9</var>322B and that is made up of members who are Minnesota residents;<br/>
<a id="pl.26.10"></a><var>26.10</var>    (3) a Minnesota nonprofit organization organized under chapter 317A;<br/>
<a id="pl.26.11"></a><var>26.11</var>    (4) a Minnesota cooperative association organized under chapter 308A or 308B, <br/>
<a id="pl.26.12"></a><var>26.12</var>other than including a rural electric cooperative association or a generation and <br/>
<a id="pl.26.13"></a><var>26.13</var>transmission cooperative on behalf of and at the request of a member distribution utility;<br/>
<a id="pl.26.14"></a><var>26.14</var>    (5) a Minnesota political subdivision or local government other than including, <br/>
<a id="pl.26.15"></a><var>26.15</var>but not limited to, a municipal electric utility or a municipal power agency on behalf <br/>
<a id="pl.26.16"></a><var>26.16</var>of and at the request of a member distribution utility, including, but not limited to, a <br/>
<a id="pl.26.17"></a><var>26.17</var>county, statutory or home rule charter city, town, school district, or public or private <br/>
<a id="pl.26.18"></a><var>26.18</var>higher education institution or any other local or regional governmental organization such <br/>
<a id="pl.26.19"></a><var>26.19</var>as a board, commission, or association; or<br/>
<a id="pl.26.20"></a><var>26.20</var>    (6) a tribal council.<br/>
<a id="pl.26.21"></a><var>26.21</var>    (d) "Net present value rate" means a rate equal to the net present value of the <br/>
<a id="pl.26.22"></a><var>26.22</var>nominal payments to a project divided by the total expected energy production of the <br/>
<a id="pl.26.23"></a><var>26.23</var>project over the life of its power purchase agreement.<br/>
<a id="pl.26.24"></a><var>26.24</var>    (e) "Standard reliability criteria" means:<br/>
<a id="pl.26.25"></a><var>26.25</var>    (1) can be safely integrated into and operated within the utility's grid without causing <br/>
<a id="pl.26.26"></a><var>26.26</var>any adverse or unsafe consequences; and<br/>
<a id="pl.26.27"></a><var>26.27</var>    (2) is consistent with the utility's resource needs as identified in its most recent <br/>
<a id="pl.26.28"></a><var>26.28</var>resource plan submitted under section 
         <statute_ref>216B.2422</statute_ref>.<br/>
<a id="pl.26.29"></a><var>26.29</var>    (f) "Renewable" means a technology listed in section 216B.1691, subdivision 1, <br/>
<a id="pl.26.30"></a><var>26.30</var>paragraph (a).<br/>
<a id="pl.26.31"></a><var>26.31</var>    (g) "Community-based energy project" or "C-BED project" means a new wind <br/>
<a id="pl.26.32"></a><var>26.32</var>renewable energy project that:<br/>
<a id="pl.26.33"></a><var>26.33</var>    (1) has no single qualifying owner owning more than 15 percent of a C-BED project <br/>
<a id="pl.26.34"></a><var>26.34</var>that consists of more than two turbines; or<br/>
<a id="pl.27.1"></a><var>27.1</var>    (2) for C-BED projects of one or two turbines, is owned entirely by one or more <br/>
<a id="pl.27.2"></a><var>27.2</var>qualifying owners, with at least 51 percent of the total financial benefits over the life of the <br/>
<a id="pl.27.3"></a><var>27.3</var>project flowing to qualifying owners; and<br/>
<a id="pl.27.4"></a><var>27.4</var>    (1) provides that at least 51 percent of the total payments made as a direct result of a <br/>
<a id="pl.27.5"></a><var>27.5</var>power purchase agreement or similar agreement with a utility accrue to: <br/>
<a id="pl.27.6"></a><var>27.6</var>    (i) qualifying owners, in the form of net cash payments under the power purchase <br/>
<a id="pl.27.7"></a><var>27.7</var>agreement that amount to no less than 35 percent made over the term of the power <br/>
<a id="pl.27.8"></a><var>27.8</var>purchase agreement; <br/>
<a id="pl.27.9"></a><var>27.9</var>    (ii) owners of land upon which a project is sited, in the form of easement or lease <br/>
<a id="pl.27.10"></a><var>27.10</var>payments; <br/>
<a id="pl.27.11"></a><var>27.11</var>    (iii) local units of government, in the form of taxes paid under section 272.029; and <br/>
<a id="pl.27.12"></a><var>27.12</var>    (iv) lenders chartered under section 46.044, in the form of interest paid on C-BED <br/>
<a id="pl.27.13"></a><var>27.13</var>project debt financed by a lender; <br/>
<a id="pl.27.14"></a><var>27.14</var>    (2) allows, if the project is a wind energy project consisting of more than two <br/>
<a id="pl.27.15"></a><var>27.15</var>turbines, no single qualifying owner to own more than 15 percent of the project; <br/>
<a id="pl.27.16"></a><var>27.16</var>    (3) allows, if the project is a wind energy project, a public entity listed in paragraph <br/>
<a id="pl.27.17"></a><var>27.17</var>(b), clause (5), except for a municipal utility, to own more than 15 percent of the project; <br/>
<a id="pl.27.18"></a><var>27.18</var>and <br/>
<a id="pl.27.19"></a><var>27.19</var>    (3) (4) has a resolution of support adopted by the county board of each county in <br/>
<a id="pl.27.20"></a><var>27.20</var>which the project is to be located, or in the case of a project located within the boundaries <br/>
<a id="pl.27.21"></a><var>27.21</var>of a reservation, the tribal council for that reservation.<br/>
<a id="pl.27.22"></a><var>27.22</var>    Subd. 3. <b>Tariff rate.</b> (a) The tariff described in subdivision 4 must have a rate <br/>
<a id="pl.27.23"></a><var>27.23</var>schedule that allows for a rate up to a 2.7 cents per kilowatt-hour net present value rate <br/>
<a id="pl.27.24"></a><var>27.24</var>over the 20-year life of the power purchase agreement. The tariff must provide for a rate <br/>
<a id="pl.27.25"></a><var>27.25</var>that is higher in the first ten years of the power purchase agreement than in the last ten <br/>
<a id="pl.27.26"></a><var>27.26</var>years. The discount rate required to calculate the net present value must be the utility's <br/>
<a id="pl.27.27"></a><var>27.27</var>normal discount rate used for its other business purposes.<br/>
<a id="pl.27.28"></a><var>27.28</var>    (b) The commission shall consider mechanisms to encourage the aggregation <br/>
<a id="pl.27.29"></a><var>27.29</var>of C-BED projects.<br/>
<a id="pl.27.30"></a><var>27.30</var>    (c) The commission shall require that qualifying and nonqualifying owners provide <br/>
<a id="pl.27.31"></a><var>27.31</var>sufficient security to secure performance under the power purchase agreement, and shall <br/>
<a id="pl.27.32"></a><var>27.32</var>prohibit the transfer of the C-BED project to a nonqualifying owner during the initial <br/>
<a id="pl.27.33"></a><var>27.33</var>20 years of the contract.<br/>
<a id="pl.27.34"></a><var>27.34</var>    Subd. 4. <b>Utilities to offer tariff.</b> By December 1, 2005 2007, each public utility <br/>
<a id="pl.27.35"></a><var>27.35</var>providing electric service at retail shall file for commission approval a community-based <br/>
<a id="pl.27.36"></a><var>27.36</var>energy development tariff consistent with subdivision 3. Within 90 days of the <br/>
<a id="pl.28.1"></a><var>28.1</var>first commission approval order under this subdivision, each municipal power <br/>
<a id="pl.28.2"></a><var>28.2</var>agency and generation and transmission cooperative electric association shall adopt a <br/>
<a id="pl.28.3"></a><var>28.3</var>community-based energy development tariff as consistent as possible with subdivision 3.<br/>
<a id="pl.28.4"></a><var>28.4</var>    Subd. 5. <b>Priority for C-BED projects.</b> (a) A utility subject to section 
         <statute_ref>216B.1691</statute_ref> <br/>
<a id="pl.28.5"></a><var>28.5</var>that needs to construct new generation, or purchase the output from new generation, as <br/>
<a id="pl.28.6"></a><var>28.6</var>part of its plan to satisfy its good faith objective and standard under that section should <br/>
<a id="pl.28.7"></a><var>28.7</var>must take reasonable steps to determine if one or more C-BED projects are available that <br/>
<a id="pl.28.8"></a><var>28.8</var>meet the utility's cost and reliability requirements, applying standard reliability criteria, to <br/>
<a id="pl.28.9"></a><var>28.9</var>fulfill some or all of the identified need at minimal impact to customer rates.<br/>
<a id="pl.28.10"></a><var>28.10</var>    Nothing in this section shall be construed to obligate a utility to enter into a power <br/>
<a id="pl.28.11"></a><var>28.11</var>purchase agreement under a C-BED tariff developed under this section. A utility whose <br/>
<a id="pl.28.12"></a><var>28.12</var>renewable energy plan has been approved by the commission under section 216B.1645, <br/>
<a id="pl.28.13"></a><var>28.13</var>subdivision 2a, must negotiate in good faith with developers of C-BED projects that meet <br/>
<a id="pl.28.14"></a><var>28.14</var>the specifications of this paragraph and whose aggregated capacity is equal to the capacity <br/>
<a id="pl.28.15"></a><var>28.15</var>of C-BED projects identified in the plan from which the utility intends to purchase energy.<br/>
<a id="pl.28.16"></a><var>28.16</var>    (b) Each utility shall include in its resource plan submitted under section 
         <statute_ref>216B.2422</statute_ref> <br/>
<a id="pl.28.17"></a><var>28.17</var>a description of its efforts to purchase energy from C-BED projects, including a list of the <br/>
<a id="pl.28.18"></a><var>28.18</var>projects under contract and the amount of C-BED energy purchased.<br/>
<a id="pl.28.19"></a><var>28.19</var>    (c) The commission shall consider the efforts and activities of a utility to purchase <br/>
<a id="pl.28.20"></a><var>28.20</var>energy from C-BED projects when evaluating its good faith effort towards meeting the <br/>
<a id="pl.28.21"></a><var>28.21</var>renewable energy objective under section 
         <statute_ref>216B.1691</statute_ref>.<br/>
<a id="pl.28.22"></a><var>28.22</var>    (d) A municipal power agency or generation and transmission cooperative shall, <br/>
<a id="pl.28.23"></a><var>28.23</var>when issuing a request for proposals for C-BED projects to satisfy its standard obligation <br/>
<a id="pl.28.24"></a><var>28.24</var>under section 216B.1691, provide notice to its member distribution utilities that they <br/>
<a id="pl.28.25"></a><var>28.25</var>may propose, in partnership with other qualifying owners, a C-BED project for the <br/>
<a id="pl.28.26"></a><var>28.26</var>consideration of the municipal power agency or generation and transmission cooperative.<br/>
<a id="pl.28.27"></a><var>28.27</var>    Subd. 6. <b>Property owner participation.</b> To the extent feasible, a developer of a <br/>
<a id="pl.28.28"></a><var>28.28</var>C-BED project must provide, in writing, an opportunity to invest in the C-BED project to <br/>
<a id="pl.28.29"></a><var>28.29</var>each property owner on whose property a high-voltage transmission line is constructed <br/>
<a id="pl.28.30"></a><var>28.30</var>that will transmit the energy generated by the C-BED project to market. This subdivision <br/>
<a id="pl.28.31"></a><var>28.31</var>applies if the property is located and the owner resides in the county where the C-BED <br/>
<a id="pl.28.32"></a><var>28.32</var>project is located.<br/>
<a id="pl.28.33"></a><var>28.33</var>    Subd. 7. <b>Other C-BED tariff issues.</b> (a) A community-based project developer <br/>
<a id="pl.28.34"></a><var>28.34</var>and a utility shall negotiate the rate and power purchase agreement terms consistent with <br/>
<a id="pl.28.35"></a><var>28.35</var>the tariff established under subdivision 4.<br/>
<a id="pl.29.1"></a><var>29.1</var>    (b) At the discretion of the developer, a community-based project developer and <br/>
<a id="pl.29.2"></a><var>29.2</var>a utility may negotiate a power purchase agreement with terms different from the tariff <br/>
<a id="pl.29.3"></a><var>29.3</var>established under subdivision 4.<br/>
<a id="pl.29.4"></a><var>29.4</var>    (c) A qualifying owner, or any combination of qualifying owners, may develop a <br/>
<a id="pl.29.5"></a><var>29.5</var>joint venture project with a nonqualifying wind renewable energy project developer. <br/>
<a id="pl.29.6"></a><var>29.6</var>However, the terms of the C-BED tariff may only apply to the portion of the energy <br/>
<a id="pl.29.7"></a><var>29.7</var>production of the total project that is directly proportional to the equity share of the project <br/>
<a id="pl.29.8"></a><var>29.8</var>owned by the qualifying owners.<br/>
<a id="pl.29.9"></a><var>29.9</var>    (d) A project that is operating under a power purchase agreement under a C-BED <br/>
<a id="pl.29.10"></a><var>29.10</var>tariff is not eligible for net energy billing under section 
         <statute_ref>216B.164, subdivision 3</statute_ref>, or for <br/>
<a id="pl.29.11"></a><var>29.11</var>production incentives under section 
         <statute_ref>216C.41</statute_ref>.<br/>
<a id="pl.29.12"></a><var>29.12</var>    (e) A public utility must receive commission approval of a power purchase <br/>
<a id="pl.29.13"></a><var>29.13</var>agreement for a C-BED tariffed project. The commission shall provide the utility's <br/>
<a id="pl.29.14"></a><var>29.14</var>ratepayers an opportunity to address the reasonableness of the proposed power purchase <br/>
<a id="pl.29.15"></a><var>29.15</var>agreement. Unless a party objects to a contract within 30 days of submission of the <br/>
<a id="pl.29.16"></a><var>29.16</var>contract to the commission the contract is deemed approved.<br/>
<a id="pl.29.17"></a><var>29.17</var>    Subd. 8. <b>Community energy partnerships.</b> A utility providing electric service <br/>
<a id="pl.29.18"></a><var>29.18</var>to retail or wholesale customers in Minnesota and an independent power producer may <br/>
<a id="pl.29.19"></a><var>29.19</var>participate, and are encouraged to participate, in a community-based energy project, as <br/>
<a id="pl.29.20"></a><var>29.20</var>owner, equity partner, or provider of technical or financial assistance, subject to the limits <br/>
<a id="pl.29.21"></a><var>29.21</var>specified in this section.<br/>
<a id="pl.29.22"></a><var>29.22</var>    Subd. 9. <b>C-BED advisory determination.</b> A developer of a proposed project may <br/>
<a id="pl.29.23"></a><var>29.23</var>request the commissioner of commerce to issue an advisory determination as to whether <br/>
<a id="pl.29.24"></a><var>29.24</var>the proposed project qualifies as a C-BED project under this section. The request must <br/>
<a id="pl.29.25"></a><var>29.25</var>be made on a form and under a procedure approved by the commissioner. A positive <br/>
<a id="pl.29.26"></a><var>29.26</var>advisory determination of the commissioner under this subdivision establishes a rebuttable <br/>
<a id="pl.29.27"></a><var>29.27</var>presumption that the project qualifies as a C-BED project.<br/>
<br/>
<a id="bill.4.3.0"></a><a id="pl.29.28"></a><var>29.28</var>    Sec. 3. Minnesota Statutes 2006, section 216B.1645, is amended by adding a <br/>
<a id="pl.29.29"></a><var>29.29</var>subdivision to read:<br/>
<a id="pl.29.30"></a><var>29.30</var>    Subd. 2a. <b>Utility ownership of renewable resources.</b> (a) A utility may construct, <br/>
<a id="pl.29.31"></a><var>29.31</var>own, and operate generation facilities used to satisfy the requirements of section <br/>
<a id="pl.29.32"></a><var>29.32</var>216B.1691, notwithstanding any competitive resource acquisition process established <br/>
<a id="pl.29.33"></a><var>29.33</var>under section 216B.2422, subdivision 5. <br/>
<a id="pl.29.34"></a><var>29.34</var>    (b) In lieu of any competitive resource acquisition process, a utility that owns a <br/>
<a id="pl.29.35"></a><var>29.35</var>nuclear generation facility and intends to construct, own, or operate facilities under this <br/>
<a id="pl.30.1"></a><var>30.1</var>section shall file with the commission on or before March 1, 2008, a renewable energy <br/>
<a id="pl.30.2"></a><var>30.2</var>plan setting forth the manner in which the utility proposes to meet the requirements of <br/>
<a id="pl.30.3"></a><var>30.3</var>section 216B.1691, including a proposed schedule for purchasing renewable energy from <br/>
<a id="pl.30.4"></a><var>30.4</var>C-BED and non-C-BED projects, a proposed schedule of acquisition and construction <br/>
<a id="pl.30.5"></a><var>30.5</var>of generation facilities and their expected in-service dates, and proposed transmission <br/>
<a id="pl.30.6"></a><var>30.6</var>resources associated with the facilities, including a proposed construction schedule and <br/>
<a id="pl.30.7"></a><var>30.7</var>expected in-service date for any transmission sources that need to be constructed to <br/>
<a id="pl.30.8"></a><var>30.8</var>deliver the electricity generated by the facilities. The plan must also contain alternative <br/>
<a id="pl.30.9"></a><var>30.9</var>means of providing the energy generated by the facilities described in the plan, and <br/>
<a id="pl.30.10"></a><var>30.10</var>must compare the costs of delivering energy from these alternative means and from the <br/>
<a id="pl.30.11"></a><var>30.11</var>facilities identified in the plan. The utility shall update the plan as necessary in its filing <br/>
<a id="pl.30.12"></a><var>30.12</var>under section 216B.2422. <br/>
<a id="pl.30.13"></a><var>30.13</var>    (c) The commission shall approve the plan unless it determines, after public hearing <br/>
<a id="pl.30.14"></a><var>30.14</var>and comment, that the plan: <br/>
<a id="pl.30.15"></a><var>30.15</var>    (1) imposes excessive costs on ratepayers; <br/>
<a id="pl.30.16"></a><var>30.16</var>    (2) does not reasonably allocate resources among utility-owned generation facilities, <br/>
<a id="pl.30.17"></a><var>30.17</var>energy purchased from C-BED and non-C-BED projects, and generation facilities selected <br/>
<a id="pl.30.18"></a><var>30.18</var>in a competitive selection process under section 216B.2422, subdivision 5; or <br/>
<a id="pl.30.19"></a><var>30.19</var>    (3) does not maximize benefits to Minnesota citizens, as required by section <br/>
<a id="pl.30.20"></a><var>30.20</var>216B.1691, subdivision 9. <br/>
<a id="pl.30.21"></a><var>30.21</var>Nothing in this section prohibits a utility from seeking and securing approval from the <br/>
<a id="pl.30.22"></a><var>30.22</var>commission to implement projects prior to submission of the plan required under this <br/>
<a id="pl.30.23"></a><var>30.23</var>section.<br/>
<br/>
<a id="bill.4.4.0"></a><a id="pl.30.24"></a><var>30.24</var>    Sec. 4. Minnesota Statutes 2006, section 216B.1645, is amended by adding a <br/>
<a id="pl.30.25"></a><var>30.25</var>subdivision to read:<br/>
<a id="pl.30.26"></a><var>30.26</var>    Subd. 2b. <b>Cost recovery for owned renewable facilities.</b> (a) A utility may petition <br/>
<a id="pl.30.27"></a><var>30.27</var>the commission to approve a rate schedule that provides for the automatic adjustment of <br/>
<a id="pl.30.28"></a><var>30.28</var>charges to recover prudently incurred investments, expenses, or costs associated with <br/>
<a id="pl.30.29"></a><var>30.29</var>facilities constructed, owned, or operated by a utility to satisfy the requirements of section <br/>
<a id="pl.30.30"></a><var>30.30</var>216B.1691, provided those facilities were previously approved by the commission under <br/>
<a id="pl.30.31"></a><var>30.31</var>section 216B.2422 or 216B.243. The commission may approve, or approve as modified, a <br/>
<a id="pl.30.32"></a><var>30.32</var>rate schedule that: <br/>
<a id="pl.30.33"></a><var>30.33</var>    (1) allows a utility to recover directly from customers on a timely basis the costs of <br/>
<a id="pl.30.34"></a><var>30.34</var>qualifying renewable energy projects, including: <br/>
<a id="pl.30.35"></a><var>30.35</var>    (i) return on investment; <br/>
<a id="pl.31.1"></a><var>31.1</var>    (ii) depreciation; <br/>
<a id="pl.31.2"></a><var>31.2</var>    (iii) ongoing operation and maintenance costs; <br/>
<a id="pl.31.3"></a><var>31.3</var>    (iv) taxes; and <br/>
<a id="pl.31.4"></a><var>31.4</var>    (v) costs of transmission and other ancillary expenses directly allocable to <br/>
<a id="pl.31.5"></a><var>31.5</var>transmitting electricity generated from a project meeting the specifications of this <br/>
<a id="pl.31.6"></a><var>31.6</var>paragraph; <br/>
<a id="pl.31.7"></a><var>31.7</var>    (2) provides a current return on construction work in progress, provided that recovery <br/>
<a id="pl.31.8"></a><var>31.8</var>of these costs from Minnesota ratepayers is not sought through any other mechanism; <br/>
<a id="pl.31.9"></a><var>31.9</var>    (3) allows recovery of other expenses incurred that are directly related to a renewable <br/>
<a id="pl.31.10"></a><var>31.10</var>energy project, provided that the utility demonstrates to the commission's satisfaction that <br/>
<a id="pl.31.11"></a><var>31.11</var>the expenses improve project economics, ensure project implementation, or facilitate <br/>
<a id="pl.31.12"></a><var>31.12</var>coordination with the development of transmission necessary to transport energy produced <br/>
<a id="pl.31.13"></a><var>31.13</var>by the project to market; <br/>
<a id="pl.31.14"></a><var>31.14</var>    (4) allocates recoverable costs appropriately between wholesale and retail customers; <br/>
<a id="pl.31.15"></a><var>31.15</var>    (5) terminates recovery when costs have been fully recovered or have otherwise <br/>
<a id="pl.31.16"></a><var>31.16</var>been reflected in a utility's rates. <br/>
<a id="pl.31.17"></a><var>31.17</var>    (b) A petition filed under this subdivision must include: <br/>
<a id="pl.31.18"></a><var>31.18</var>    (1) a description of the facilities for which costs are to be recovered; <br/>
<a id="pl.31.19"></a><var>31.19</var>    (2) an implementation schedule for the facilities; <br/>
<a id="pl.31.20"></a><var>31.20</var>    (3) the utility's costs for the facilities; <br/>
<a id="pl.31.21"></a><var>31.21</var>    (4) a description of the utility's efforts to ensure that costs of the facilities are <br/>
<a id="pl.31.22"></a><var>31.22</var>reasonable and were prudently incurred; and <br/>
<a id="pl.31.23"></a><var>31.23</var>    (5) a description of the benefits of the project in promoting the development of <br/>
<a id="pl.31.24"></a><var>31.24</var>renewable energy in a manner consistent with this chapter.<br/>
<br/>
<a id="bill.4.5.0"></a><a id="pl.31.25"></a><var>31.25</var>    Sec. 5. <b>[216B.1681] CURTAILMENT PAYMENTS.</b><br/>
<a id="pl.31.26"></a><var>31.26</var>    The commission shall, by September 1, 2007, initiate a review of curtailment <br/>
<a id="pl.31.27"></a><var>31.27</var>payments for wind energy projects to assess whether utilities are unduly discriminating <br/>
<a id="pl.31.28"></a><var>31.28</var>among project ownership structures in regard to the contractual availability of curtailment <br/>
<a id="pl.31.29"></a><var>31.29</var>payments.<br/>
<br/>
<a id="bill.4.6.0"></a><a id="pl.31.30"></a><var>31.30</var>    Sec. 6. Minnesota Statutes 2006, section 216B.169, is amended to read:<br/>
<a id="pl.31.31"></a><var>31.31</var><b>216B.169 </b><b>RENEWABLE AND HIGH-EFFICIENCY ENERGY RATE </b><br/>
<a id="pl.31.32"></a><var>31.32</var><b>OPTIONS</b><b> COMMUNITY-BASED ENERGY DEVELOPMENT GREEN PRICING </b><br/>
<a id="pl.31.33"></a><var>31.33</var><b>OPTION</b><b>.</b><br/>
<a id="pl.32.1"></a><var>32.1</var>    Subdivision 1. <b>Definitions.</b> For the purposes of this section, the following terms <br/>
<a id="pl.32.2"></a><var>32.2</var>have the meanings given them.<br/>
<a id="pl.32.3"></a><var>32.3</var>    (a) "Utility" means a public utility, municipal utility, or cooperative electric <br/>
<a id="pl.32.4"></a><var>32.4</var>association providing electric service at retail to Minnesota consumers.<br/>
<a id="pl.32.5"></a><var>32.5</var>    (b) "Renewable energy" has the meaning given in section 
<statute_ref>216B.2422, subdivision 1</statute_ref>, <br/>
<a id="pl.32.6"></a><var>32.6</var>paragraph (c) "Eligible energy technology" has the meaning given in section 216B.1691, <br/>
<a id="pl.32.7"></a><var>32.7</var>subdivision 1. <br/>
<a id="pl.32.8"></a><var>32.8</var>    (c) "High-efficiency, low-emissions, distributed generation" means a distributed <br/>
<a id="pl.32.9"></a><var>32.9</var>generation facility of no more than ten megawatts of interconnected capacity that is <br/>
<a id="pl.32.10"></a><var>32.10</var>certified by the commissioner under subdivision 3 as a high-efficiency, low-emissions <br/>
<a id="pl.32.11"></a><var>32.11</var>facility "Community-based energy development project" or "C-BED project" has the <br/>
<a id="pl.32.12"></a><var>32.12</var>meaning given in section 216B.1612, subdivision 2, paragraph (g).<br/>
<a id="pl.32.13"></a><var>32.13</var>    Subd. 2. <b>Renewable and high-efficiency energy rate options</b><b> C-BED green </b><br/>
<a id="pl.32.14"></a><var>32.14</var><b>pricing programs</b><b>.</b> (a) Each utility shall offer its customers, and shall advertise <br/>
<a id="pl.32.15"></a><var>32.15</var>the offer at least annually quarterly, one or more options that allow a customer to <br/>
<a id="pl.32.16"></a><var>32.16</var>determine that a certain amount of the electricity generated or purchased on behalf of the <br/>
<a id="pl.32.17"></a><var>32.17</var>customer is renewable energy or energy generated by high-efficiency, low-emissions, <br/>
<a id="pl.32.18"></a><var>32.18</var>distributed generation such as fuel cells and microturbines fueled by a renewable fuel a <br/>
<a id="pl.32.19"></a><var>32.19</var>community-based energy development project or is provided through the purchase of <br/>
<a id="pl.32.20"></a><var>32.20</var>renewable energy credits from a C-BED project.<br/>
<a id="pl.32.21"></a><var>32.21</var>    (b) Each public utility shall file an implementation plan within 90 days of July 1, <br/>
<a id="pl.32.22"></a><var>32.22</var>2001 2007, to implement paragraph (a).<br/>
<a id="pl.32.23"></a><var>32.23</var>    (c) Rates charged to customers must be calculated using the utility's cost of acquiring <br/>
<a id="pl.32.24"></a><var>32.24</var>the energy for the customer and must:<br/>
<a id="pl.32.25"></a><var>32.25</var>    (1) reflect the difference between the cost of generating or purchasing the renewable <br/>
<a id="pl.32.26"></a><var>32.26</var>C-BED energy or credits and the cost of generating or purchasing the same amount of <br/>
<a id="pl.32.27"></a><var>32.27</var>nonrenewable energy or credits from non-C-BED sources; and<br/>
<a id="pl.32.28"></a><var>32.28</var>    (2) be distributed on a per kilowatt-hour basis among all customers who choose to <br/>
<a id="pl.32.29"></a><var>32.29</var>participate in the program.<br/>
<a id="pl.32.30"></a><var>32.30</var>    (d) Implementation of these rate options may reflect a reasonable amount of lead <br/>
<a id="pl.32.31"></a><var>32.31</var>time necessary to arrange acquisition of the energy. The utility may must acquire the <br/>
<a id="pl.32.32"></a><var>32.32</var>energy demanded by customers, in whole or in part, through procuring or generating <br/>
<a id="pl.32.33"></a><var>32.33</var>the renewable C-BED energy directly, or through the purchase of credits from a provider <br/>
<a id="pl.32.34"></a><var>32.34</var>that has received certification of eligible power supply pursuant to subdivision 3 issued <br/>
<a id="pl.32.35"></a><var>32.35</var>under the program established by the commission under section 216B.1691, subdivision <br/>
<a id="pl.32.36"></a><var>32.36</var>4, if available. If a utility is not able to arrange an adequate supply of renewable or <br/>
<a id="pl.33.1"></a><var>33.1</var>high-efficiency C-BED energy or credits to meet its customers' demand under this section, <br/>
<a id="pl.33.2"></a><var>33.2</var>the utility must file a report with the commission detailing its efforts and reasons for <br/>
<a id="pl.33.3"></a><var>33.3</var>its failure.<br/>
<a id="pl.33.4"></a><var>33.4</var>    Subd. 3. <b>Certification </b><b>and tradeable credits</b><b>.</b> (a) The commissioner shall certify a <br/>
<a id="pl.33.5"></a><var>33.5</var>power supply or supplies as eligible to satisfy customer requirements under this section <br/>
<a id="pl.33.6"></a><var>33.6</var>upon finding:<br/>
<a id="pl.33.7"></a><var>33.7</var>    (1) the power supply is renewable energy or energy generated by high-efficiency, <br/>
<a id="pl.33.8"></a><var>33.8</var>low-emissions, distributed generation meets the requirements of section 216B.1612; and<br/>
<a id="pl.33.9"></a><var>33.9</var>    (2) the sales arrangements of energy from the supplies are such that the power <br/>
<a id="pl.33.10"></a><var>33.10</var>supply is only sold once to retail consumers.<br/>
<a id="pl.33.11"></a><var>33.11</var>    (b) To facilitate compliance with this section, the commission may, by order, <br/>
<a id="pl.33.12"></a><var>33.12</var>establish a program for tradeable credits for eligible power supplies.<br/>
<a id="pl.33.13"></a><var>33.13</var>    Subd. 4. <b>C-BED logo.</b> (a) The commissioner of commerce shall design or <br/>
<a id="pl.33.14"></a><var>33.14</var>contract for the design of a logo that qualifying entities may affix to their products and <br/>
<a id="pl.33.15"></a><var>33.15</var>to advertising for their products that contains the words "100% Minnesota Renewable <br/>
<a id="pl.33.16"></a><var>33.16</var>Energy." The logo may also contain a standardized pictorial representation or design. <br/>
<a id="pl.33.17"></a><var>33.17</var>    (b) The commissioner of commerce shall certify in writing that an entity is <br/>
<a id="pl.33.18"></a><var>33.18</var>authorized to use the logo if the commissioner determines that all the electricity consumed <br/>
<a id="pl.33.19"></a><var>33.19</var>by an applicant is purchased directly, or by purchasing credits from a C-BED project. <br/>
<a id="pl.33.20"></a><var>33.20</var>The commissioner of commerce shall develop forms and procedures to govern the <br/>
<a id="pl.33.21"></a><var>33.21</var>application and certification processes and the use of the logo by an entity that receives <br/>
<a id="pl.33.22"></a><var>33.22</var>certification. No person may use the logo without certification from the commissioner. <br/>
<a id="pl.33.23"></a><var>33.23</var>For the purposes of this subdivision, "qualifying entity" means a person or entity that has <br/>
<a id="pl.33.24"></a><var>33.24</var>received certification from the commissioner of commerce granting the entity authority to <br/>
<a id="pl.33.25"></a><var>33.25</var>use the C-BED logo in the manner prescribed by the commissioner.<br/>
<br/>
<a id="bill.4.7.0"></a><a id="pl.33.26"></a><var>33.26</var>    Sec. 7. Minnesota Statutes 2006, section 216C.052, is amended to read:<br/>
<a id="pl.33.27"></a><var>33.27</var><b>216C.052 RELIABILITY ADMINISTRATOR.</b><br/>
<a id="pl.33.28"></a><var>33.28</var>    Subdivision 1. <b>Responsibilities.</b> (a) There is established the position of reliability <br/>
<a id="pl.33.29"></a><var>33.29</var>administrator in the Public Utilities Commission Department of Commerce. The <br/>
<a id="pl.33.30"></a><var>33.30</var>administrator shall act as a source of independent expertise and a technical advisor to <br/>
<a id="pl.33.31"></a><var>33.31</var>the commissioner, the commission and the public on issues related to the reliability of <br/>
<a id="pl.33.32"></a><var>33.32</var>the electric system. In conducting its work, the administrator shall provide assistance <br/>
<a id="pl.33.33"></a><var>33.33</var>to the commission commissioner in administering and implementing the commission's <br/>
<a id="pl.33.34"></a><var>33.34</var>department's duties under sections 216B.1612, 216B.1691,
<statute_ref>216B.2422</statute_ref>, 
         <statute_ref>216B.2425</statute_ref>, and <br/>
<statute_ref><a id="pl.34.1"></a><var>34.1</var>216B.243
         </statute_ref>; chapters 216E, 216F, and 216G; and rules associated with those provisions. <br/>
<a id="pl.34.2"></a><var>34.2</var>Subject to resource constraints, the reliability administrator may also and shall also:<br/>
<a id="pl.34.3"></a><var>34.3</var>    (1) model and monitor the use and operation of the energy infrastructure in the <br/>
<a id="pl.34.4"></a><var>34.4</var>state, including generation facilities, transmission lines, natural gas pipelines, and other <br/>
<a id="pl.34.5"></a><var>34.5</var>energy infrastructure;<br/>
<a id="pl.34.6"></a><var>34.6</var>    (2) develop and present to the commission and parties technical analyses of proposed <br/>
<a id="pl.34.7"></a><var>34.7</var>infrastructure projects, and provide technical advice to the commission;<br/>
<a id="pl.34.8"></a><var>34.8</var>    (3) present independent, factual, expert, and technical information on infrastructure <br/>
<a id="pl.34.9"></a><var>34.9</var>proposals and reliability issues at public meetings hosted by the task force, the <br/>
<a id="pl.34.10"></a><var>34.10</var>Environmental Quality Board, the department, or the commission.<br/>
<a id="pl.34.11"></a><var>34.11</var>    (b) Upon request and subject to resource constraints, the administrator shall <br/>
<a id="pl.34.12"></a><var>34.12</var>provide technical assistance regarding matters unrelated to applications for infrastructure <br/>
<a id="pl.34.13"></a><var>34.13</var>improvements to the task force, the department, or the commission.<br/>
<a id="pl.34.14"></a><var>34.14</var>    (c) The administrator may not advocate for any particular outcome in a commission <br/>
<a id="pl.34.15"></a><var>34.15</var>proceeding, but may give technical advice to the commission as to the impact on the <br/>
<a id="pl.34.16"></a><var>34.16</var>reliability of the energy system of a particular project or projects.<br/>
<a id="pl.34.17"></a><var>34.17</var>    Subd. 2. <b>Administrative issues.</b> (a) The commission commissioner may select the <br/>
<a id="pl.34.18"></a><var>34.18</var>administrator who shall serve for a four-year term. The administrator must demonstrate <br/>
<a id="pl.34.19"></a><var>34.19</var>technical training, expertise, or experience in energy reliability issues, and may not have <br/>
<a id="pl.34.20"></a><var>34.20</var>been a party or a participant in a commission energy proceeding for at least one year <br/>
<a id="pl.34.21"></a><var>34.21</var>prior to selection by the commission commissioner. The commission commissioner <br/>
<a id="pl.34.22"></a><var>34.22</var>shall oversee and direct the work of the administrator, annually review the expenses of <br/>
<a id="pl.34.23"></a><var>34.23</var>the administrator, and annually approve the budget of the administrator. Pursuant to <br/>
<a id="pl.34.24"></a><var>34.24</var>commission approval, The administrator may hire staff and may contract for technical <br/>
<a id="pl.34.25"></a><var>34.25</var>expertise in performing duties when existing state resources are required for other state <br/>
<a id="pl.34.26"></a><var>34.26</var>responsibilities or when special expertise is required. The salary of the administrator is <br/>
<a id="pl.34.27"></a><var>34.27</var>governed by section 
         <statute_ref>15A.0815, subdivision 2</statute_ref>.<br/>
<a id="pl.34.28"></a><var>34.28</var>    (b) Costs relating to a specific proceeding, analysis, or project are not general <br/>
<a id="pl.34.29"></a><var>34.29</var>administrative costs. For purposes of this section, "energy utility" means public utilities, <br/>
<a id="pl.34.30"></a><var>34.30</var>generation and transmission cooperative electric associations, and municipal power <br/>
<a id="pl.34.31"></a><var>34.31</var>agencies providing natural gas or electric service in the state.<br/>
<a id="pl.34.32"></a><var>34.32</var>    (c) The commission Department of Commerce shall pay:<br/>
<a id="pl.34.33"></a><var>34.33</var>    (1) the general administrative costs of the administrator, not to exceed $1,000,000 in <br/>
<a id="pl.34.34"></a><var>34.34</var>a fiscal year, and shall assess energy utilities for those administrative costs. These costs <br/>
<a id="pl.34.35"></a><var>34.35</var>must be consistent with the budget approved by the commission commissioner under <br/>
<a id="pl.34.36"></a><var>34.36</var>paragraph (a). The commission department shall apportion the costs among all energy <br/>
<a id="pl.35.1"></a><var>35.1</var>utilities in proportion to their respective gross operating revenues from sales of gas or <br/>
<a id="pl.35.2"></a><var>35.2</var>electric service within the state during the last calendar year, and shall then render a <br/>
<a id="pl.35.3"></a><var>35.3</var>bill to each utility on a regular basis; and<br/>
<a id="pl.35.4"></a><var>35.4</var>    (2) costs relating to a specific proceeding analysis or project and shall render a bill to <br/>
<a id="pl.35.5"></a><var>35.5</var>the specific energy utility or utilities participating in the proceeding, analysis, or project <br/>
<a id="pl.35.6"></a><var>35.6</var>directly, either at the conclusion of a particular proceeding, analysis, or project, or from <br/>
<a id="pl.35.7"></a><var>35.7</var>time to time during the course of the proceeding, analysis, or project.<br/>
<a id="pl.35.8"></a><var>35.8</var>    (d) For purposes of administrative efficiency, the commission department shall <br/>
<a id="pl.35.9"></a><var>35.9</var>assess energy utilities and issue bills in accordance with the billing and assessment <br/>
<a id="pl.35.10"></a><var>35.10</var>procedures provided in section 
         <statute_ref>216B.62</statute_ref>, to the extent that these procedures do not <br/>
<a id="pl.35.11"></a><var>35.11</var>conflict with this subdivision. The amount of the bills rendered by the commission <br/>
<a id="pl.35.12"></a><var>35.12</var>department under paragraph (c) must be paid by the energy utility into an account in the <br/>
<a id="pl.35.13"></a><var>35.13</var>special revenue fund in the state treasury within 30 days from the date of billing and is <br/>
<a id="pl.35.14"></a><var>35.14</var>appropriated to the commission department for the purposes provided in this section. <br/>
<a id="pl.35.15"></a><var>35.15</var>The commission shall approve or approve as modified a rate schedule providing for the <br/>
<a id="pl.35.16"></a><var>35.16</var>automatic adjustment of charges to recover amounts paid by utilities under this section. <br/>
<a id="pl.35.17"></a><var>35.17</var>All amounts assessed under this section are in addition to amounts appropriated to the <br/>
<a id="pl.35.18"></a><var>35.18</var>commission and the department by other law.<br/>
<a id="pl.35.19"></a><var>35.19</var>    Subd. 3. <b>Assessment and appropriation.</b> In addition to the amount noted in <br/>
<a id="pl.35.20"></a><var>35.20</var>subdivision 2, the commission commissioner may assess utilities, using the mechanism <br/>
<a id="pl.35.21"></a><var>35.21</var>specified in that subdivision, up to an additional $500,000 annually through June 30, <br/>
<a id="pl.35.22"></a><var>35.22</var>2008. The amounts assessed under this subdivision are appropriated to the commission <br/>
<a id="pl.35.23"></a><var>35.23</var>commissioner, and some or all of the amounts assessed may be transferred to the <br/>
<a id="pl.35.24"></a><var>35.24</var>commissioner of administration, for the purposes specified in section 
         <statute_ref>16B.325</statute_ref> and Laws <br/>
<a id="pl.35.25"></a><var>35.25</var>2001, chapter 212, article 1, section 3, as needed to implement those sections.<br/>
<a id="pl.35.26"></a><var>35.26</var>    Subd. 4. <b>Expiration.</b>  Subdivisions 1 and 2 expire June 30, 2007 2012. Subdivision <br/>
<a id="pl.35.27"></a><var>35.27</var>3 expires June 30, 2008.<br/>
<br/>
<a id="bill.4.8.0"></a><a id="pl.35.28"></a><var>35.28</var>    Sec. 8. <b>[216F.011] SIZE DETERMINATION.</b><br/>
<a id="pl.35.29"></a><var>35.29</var>    (a) The total size of a combination of wind energy conversion systems for the <br/>
<a id="pl.35.30"></a><var>35.30</var>purpose of determining jurisdictional siting authority under sections 216F.01 to 216F.07 <br/>
<a id="pl.35.31"></a><var>35.31</var>must be determined according to this section. The nameplate capacity of one wind energy <br/>
<a id="pl.35.32"></a><var>35.32</var>conversion system must be combined with the nameplate capacity of any other wind <br/>
<a id="pl.35.33"></a><var>35.33</var>energy conversion system that: <br/>
<a id="pl.35.34"></a><var>35.34</var>    (1) is located within five miles of the wind energy conversion system; <br/>
<a id="pl.36.1"></a><var>36.1</var>    (2) is constructed within the same 12-month period as the wind energy conversion <br/>
<a id="pl.36.2"></a><var>36.2</var>system; and <br/>
<a id="pl.36.3"></a><var>36.3</var>    (3) exhibits characteristics of being a single development, including but not limited <br/>
<a id="pl.36.4"></a><var>36.4</var>to ownership structure, an umbrella sales arrangement, shared interconnection, revenue <br/>
<a id="pl.36.5"></a><var>36.5</var>sharing arrangements, and common debt or equity financing. <br/>
<a id="pl.36.6"></a><var>36.6</var>    (b) The commissioner shall prepare and make available the necessary forms and <br/>
<a id="pl.36.7"></a><var>36.7</var>guidance for project developers to make a request for determination. Upon written <br/>
<a id="pl.36.8"></a><var>36.8</var>request of a project developer, the commissioner of commerce shall provide a written <br/>
<a id="pl.36.9"></a><var>36.9</var>determination under this section within 30 days of receipt of the request and information <br/>
<a id="pl.36.10"></a><var>36.10</var>necessary to make a determination. In the case of a dispute, the chair of the Public Utilities <br/>
<a id="pl.36.11"></a><var>36.11</var>Commission shall determine the total size of the system and shall draw all reasonable <br/>
<a id="pl.36.12"></a><var>36.12</var>inferences in favor of combining the systems. <br/>
<a id="pl.36.13"></a><var>36.13</var>    (c) An application to a county for a permit for a wind energy conversion system is <br/>
<a id="pl.36.14"></a><var>36.14</var>not complete without a jurisdictional determination made under this section.<br/>
<br/>
<a id="bill.4.9.0"></a><a id="pl.36.15"></a><var>36.15</var>    Sec. 9. <b>[216F.08] PERMIT AUTHORITY; ASSUMPTION BY COUNTIES.</b><br/>
<a id="pl.36.16"></a><var>36.16</var>    Subdivision 1. <b>Definition.</b> For the purposes of this subdivision, the term <br/>
<a id="pl.36.17"></a><var>36.17</var>"processing" means: <br/>
<a id="pl.36.18"></a><var>36.18</var>    (1) the distribution to applicants of application and determination forms provided <br/>
<a id="pl.36.19"></a><var>36.19</var>by the commission; <br/>
<a id="pl.36.20"></a><var>36.20</var>    (2) the receipt and examination of completed application forms, and the certification, <br/>
<a id="pl.36.21"></a><var>36.21</var>in writing, to the commission either that the LWECS for which a permit was issued by the <br/>
<a id="pl.36.22"></a><var>36.22</var>county will comply with applicable rules and standards or, if the facility will not comply, <br/>
<a id="pl.36.23"></a><var>36.23</var>the respects in which a variance is required for the issuance of a permit; and <br/>
<a id="pl.36.24"></a><var>36.24</var>    (3) rendering to applicants, upon request, assistance for the proper completion of <br/>
<a id="pl.36.25"></a><var>36.25</var>an application.<br/>
<a id="pl.36.26"></a><var>36.26</var>    Subd. 2. <b>Counties; processing applications for LWECS site permits.</b> (a) Any <br/>
<a id="pl.36.27"></a><var>36.27</var>Minnesota county board may, by resolution and upon written notice to the Public Utilities <br/>
<a id="pl.36.28"></a><var>36.28</var>Commission, assume responsibility for processing applications for permits required <br/>
<a id="pl.36.29"></a><var>36.29</var>under this chapter for LWECS with a combined nameplate capacity of less than 25,000 <br/>
<a id="pl.36.30"></a><var>36.30</var>kilowatts. The responsibility for permit application processing, if assumed by a county, <br/>
<a id="pl.36.31"></a><var>36.31</var>may be delegated by the county board to an appropriate county officer or employee. <br/>
<a id="pl.36.32"></a><var>36.32</var>Processing by a county must be done in accordance with procedures and processes <br/>
<a id="pl.36.33"></a><var>36.33</var>established under chapter 394. <br/>
<a id="pl.36.34"></a><var>36.34</var>    (b) A county board that exercises its option under paragraph (a) and assumes <br/>
<a id="pl.36.35"></a><var>36.35</var>responsibility for processing applications for permits for LWECS within its borders <br/>
<a id="pl.37.1"></a><var>37.1</var>is responsible for issuing, denying, modifying, imposing conditions upon, or revoking <br/>
<a id="pl.37.2"></a><var>37.2</var>permits under this section or rules adopted pursuant to it. The action of the county board <br/>
<a id="pl.37.3"></a><var>37.3</var>with regard to a permit application is final, subject to appeal as provided in section 394.27. <br/>
<a id="pl.37.4"></a><var>37.4</var>    (c) In adopting and enforcing rules or standards under this subdivision, the <br/>
<a id="pl.37.5"></a><var>37.5</var>commission shall cooperate closely with counties and other governmental agencies.<br/>
<a id="pl.37.6"></a><var>37.6</var>    (d) The commission shall work with counties and wind developers to notify and <br/>
<a id="pl.37.7"></a><var>37.7</var>educate stakeholders with regard to rules or standards under this section at the time the <br/>
<a id="pl.37.8"></a><var>37.8</var>rules or standards are being developed and adopted and at least every two years thereafter. <br/>
<a id="pl.37.9"></a><var>37.9</var>    (e) The commission shall, by order, establish general permit standards governing site <br/>
<a id="pl.37.10"></a><var>37.10</var>permits for LWECS under this section. These general permit standards must apply both to <br/>
<a id="pl.37.11"></a><var>37.11</var>permits issued by counties and to permits issued by the commission directly for LWECS <br/>
<a id="pl.37.12"></a><var>37.12</var>with a combined nameplate capacity of less than 25,000 kilowatts. The order must contain <br/>
<a id="pl.37.13"></a><var>37.13</var>minimum standards necessary to ensure the protection of human health and safety and <br/>
<a id="pl.37.14"></a><var>37.14</var>wind resources on adjacent land and must be consistent with the general provisions of wind <br/>
<a id="pl.37.15"></a><var>37.15</var>permits issued by the commission in the five years prior to enactment of this provision. <br/>
<a id="pl.37.16"></a><var>37.16</var>    (f) The commission and the commissioner of commerce shall provide technical <br/>
<a id="pl.37.17"></a><var>37.17</var>assistance to a county with respect to the processing of LWECS site permit applications <br/>
<a id="pl.37.18"></a><var>37.18</var>by the county. <br/>
<a id="pl.37.19"></a><var>37.19</var>    (g) A county may adopt by ordinance standards for LWECS that are more stringent <br/>
<a id="pl.37.20"></a><var>37.20</var>than standards in commission rules or in the commission's permit standards. The <br/>
<a id="pl.37.21"></a><var>37.21</var>commission, in considering a permit for LWECS in a county that has adopted more <br/>
<a id="pl.37.22"></a><var>37.22</var>stringent standards, shall incorporate and apply those more stringent standards, unless the <br/>
<a id="pl.37.23"></a><var>37.23</var>commission finds there is good cause not to do so.<br/>
<br/>
<a id="bill.4.10.0"></a><a id="pl.37.24"></a><var>37.24</var>    Sec. 10. Minnesota Statutes 2006, section 500.30, subdivision 2, is amended to read:<br/>
<a id="pl.37.25"></a><var>37.25</var>    Subd. 2. <b>Like any conveyance.</b> Any property owner may grant a solar or wind <br/>
<a id="pl.37.26"></a><var>37.26</var>easement in the same manner and with the same effect as a conveyance of an interest in <br/>
<a id="pl.37.27"></a><var>37.27</var>real property. The easements shall be created in writing and shall be filed, duly recorded, <br/>
<a id="pl.37.28"></a><var>37.28</var>and indexed in the office of the recorder of the county in which the easement is granted. <br/>
<a id="pl.37.29"></a><var>37.29</var>No duly recorded easement shall be unenforceable on account of lack of privity of estate or <br/>
<a id="pl.37.30"></a><var>37.30</var>privity of contract; such easements shall run with the land or lands benefited and burdened <br/>
<a id="pl.37.31"></a><var>37.31</var>and shall constitute a perpetual easement, except that an easement may terminate upon the <br/>
<a id="pl.37.32"></a><var>37.32</var>conditions stated therein or pursuant to the provisions of section 
         <statute_ref>500.20</statute_ref>. A wind easement <br/>
<a id="pl.37.33"></a><var>37.33</var>or lease of wind rights shall also terminate after five years from the date the easement is <br/>
<a id="pl.37.34"></a><var>37.34</var>created or lease is entered into, if a wind energy project on the property to which the <br/>
<a id="pl.37.35"></a><var>37.35</var>easement or lease applies does not begin commercial operation within the five-year period.<br/>
<a id="pl.38.1"></a><var>38.1</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment, <br/>
<a id="pl.38.2"></a><var>38.2</var>and applies to wind easements created and wind rights leases entered into on and after <br/>
<a id="pl.38.3"></a><var>38.3</var>the effective date of this section.<br/>
<br/>
<a id="bill.4.11.0"></a><a id="pl.38.4"></a><var>38.4</var>    Sec. 11. <b>STATEWIDE STUDY OF DISPERSED GENERATION POTENTIAL.</b><br/>
<a id="pl.38.5"></a><var>38.5</var>    Subdivision 1. <b>Definition.</b> "Dispersed generation" means an electric generation <br/>
<a id="pl.38.6"></a><var>38.6</var>project with a generating capacity between ten and 40 megawatts that utilizes an eligible <br/>
<a id="pl.38.7"></a><var>38.7</var>energy technology, as defined in Minnesota Statutes, section 216B.1691, subdivision 1, <br/>
<a id="pl.38.8"></a><var>38.8</var>paragraph (a).<br/>
<a id="pl.38.9"></a><var>38.9</var>    Subd. 2. <b>Study participants.</b> Each electric utility subject to Minnesota Statutes, <br/>
<a id="pl.38.10"></a><var>38.10</var>section 216B.1691, must participate collaboratively in conducting a two-phase study of <br/>
<a id="pl.38.11"></a><var>38.11</var>the potential for dispersed generation projects that can be developed in Minnesota.<br/>
<a id="pl.38.12"></a><var>38.12</var>    Subd. 3. <b>First phase study content; report.</b> In the first phase of the study, <br/>
<a id="pl.38.13"></a><var>38.13</var>participants must analyze the impacts of the addition of a total of 600 megawatts of <br/>
<a id="pl.38.14"></a><var>38.14</var>new dispersed generation projects distributed among the following Minnesota electric <br/>
<a id="pl.38.15"></a><var>38.15</var>transmission planning zones: the Northeast zone, the Northwest zone, the Southeast <br/>
<a id="pl.38.16"></a><var>38.16</var>zone, the Southwest zone, and the West-Central zone. Study participants must use a <br/>
<a id="pl.38.17"></a><var>38.17</var>generally accepted 2010 year transmission system model including all transmission <br/>
<a id="pl.38.18"></a><var>38.18</var>facilities expected to be operating in 2010. The study must take into consideration <br/>
<a id="pl.38.19"></a><var>38.19</var>regional projected load growth, planned changes in the bulk transmission network, and the <br/>
<a id="pl.38.20"></a><var>38.20</var>long-range transmission conceptual plan being developed under Laws 2007, chapter 3, <br/>
<a id="pl.38.21"></a><var>38.21</var>section 2. In determining locations for the installation of dispersed generation projects <br/>
<a id="pl.38.22"></a><var>38.22</var>that consist of wind energy conversion systems, the study should consider, at a minimum, <br/>
<a id="pl.38.23"></a><var>38.23</var>wind resource availability, existing and contracted wind projects, and current dispersed <br/>
<a id="pl.38.24"></a><var>38.24</var>generation projects in the Midwest Independent System Operator interconnection queue. <br/>
<a id="pl.38.25"></a><var>38.25</var>The study must analyze the impacts of individual projects and all projects in aggregate on <br/>
<a id="pl.38.26"></a><var>38.26</var>the transmission system, and identify specific modifications to the transmission system <br/>
<a id="pl.38.27"></a><var>38.27</var>necessary to remedy any problems caused by the installation of dispersed generation <br/>
<a id="pl.38.28"></a><var>38.28</var>projects, including cost estimates for the modifications. The study must analyze the <br/>
<a id="pl.38.29"></a><var>38.29</var>additional dispersed generation projects connected at the lowest voltage level transmission <br/>
<a id="pl.38.30"></a><var>38.30</var>that exists in the vicinity of the projected generation sites. A preliminary analysis to <br/>
<a id="pl.38.31"></a><var>38.31</var>identify transmission system problems must be conducted with the projects installed <br/>
<a id="pl.38.32"></a><var>38.32</var>at initially selected locations. The technical review committee may, after reviewing <br/>
<a id="pl.38.33"></a><var>38.33</var>the locations selected for installation, recommend moving the installation sites to new <br/>
<a id="pl.38.34"></a><var>38.34</var>locations to reduce undesirable transmission system impacts. The commissioner of <br/>
<a id="pl.39.1"></a><var>39.1</var>commerce must submit a report containing the findings and recommendations of the first <br/>
<a id="pl.39.2"></a><var>39.2</var>phase of the study to the commission no later than June 15, 2008.<br/>
<a id="pl.39.3"></a><var>39.3</var>    Subd. 4. <b>Second phase study content; report.</b> In the second phase of the study, <br/>
<a id="pl.39.4"></a><var>39.4</var>participants must analyze the impacts of an additional total of 600 megawatts of dispersed <br/>
<a id="pl.39.5"></a><var>39.5</var>generation projects installed among the five transmission planning zones, or a higher total <br/>
<a id="pl.39.6"></a><var>39.6</var>capacity amount if agreed to by both the utilities and the technical review committee. The <br/>
<a id="pl.39.7"></a><var>39.7</var>utilities must employ an analysis method similar to that used in the first phase of the study, <br/>
<a id="pl.39.8"></a><var>39.8</var>and must use the most recent information available, including information developed in <br/>
<a id="pl.39.9"></a><var>39.9</var>the first phase. The second phase of the study must use a generally accepted 2013 year <br/>
<a id="pl.39.10"></a><var>39.10</var>transmission system model including all transmission facilities that are expected to be <br/>
<a id="pl.39.11"></a><var>39.11</var>in service at that time. The commissioner of commerce must submit a report containing <br/>
<a id="pl.39.12"></a><var>39.12</var>the findings and recommendations of the second phase of the study to the commission no <br/>
<a id="pl.39.13"></a><var>39.13</var>later than September 15, 2009.<br/>
<a id="pl.39.14"></a><var>39.14</var>    Subd. 5. <b>Technical review committee.</b> Prior to the start of the first phase of <br/>
<a id="pl.39.15"></a><var>39.15</var>the study, the commissioner of commerce shall appoint a technical review committee <br/>
<a id="pl.39.16"></a><var>39.16</var>consisting of between ten and 15 individuals with experience and expertise in electric <br/>
<a id="pl.39.17"></a><var>39.17</var>transmission system engineering, renewable energy generation technology, and dispersed <br/>
<a id="pl.39.18"></a><var>39.18</var>generation project development, including representatives from the federal Department <br/>
<a id="pl.39.19"></a><var>39.19</var>of Energy, the Midwest Independent System Operator, and stakeholder interests. The <br/>
<a id="pl.39.20"></a><var>39.20</var>technical review committee must oversee both phases of the study, and must: <br/>
<a id="pl.39.21"></a><var>39.21</var>    (1) make recommendations to the utilities regarding the proposed methods and <br/>
<a id="pl.39.22"></a><var>39.22</var>assumptions to be used in the technical study; <br/>
<a id="pl.39.23"></a><var>39.23</var>    (2) in conjunction with the appropriate utilities, hold public meetings on each phase <br/>
<a id="pl.39.24"></a><var>39.24</var>of the study in each electricity transmission planning zone prior to the beginning of each <br/>
<a id="pl.39.25"></a><var>39.25</var>phase of study, after the impact analysis is completed, and when a draft final report is <br/>
<a id="pl.39.26"></a><var>39.26</var>available; and <br/>
<a id="pl.39.27"></a><var>39.27</var>    (3) review the initial and final drafts of the study and make recommendations for <br/>
<a id="pl.39.28"></a><var>39.28</var>improvement, including with respect to problems associated with the interconnections <br/>
<a id="pl.39.29"></a><var>39.29</var>among utility systems that may be amenable to solution through cooperation between the <br/>
<a id="pl.39.30"></a><var>39.30</var>utilities in each zone. During each phase of the study, the technical review committee <br/>
<a id="pl.39.31"></a><var>39.31</var>may recommend that the installation of dispersed generation projects be moved to new <br/>
<a id="pl.39.32"></a><var>39.32</var>locations that cause fewer undesirable transmission system impacts.<br/>
<br/>
<a id="bill.4.12.0"></a><a id="pl.39.33"></a><var>39.33</var>    Sec. 12. <b>TRANSFERRING RELIABILITY ADMINISTRATOR </b><br/>
<a id="pl.39.34"></a><var>39.34</var><b>RESPONSIBILITIES.</b><br/>
<a id="pl.40.1"></a><var>40.1</var>    All responsibilities, as defined in Minnesota Statutes, section 15.039, subdivision <br/>
<a id="pl.40.2"></a><var>40.2</var>1, held by the Public Utilities Commission relating to the reliability administrator under <br/>
<a id="pl.40.3"></a><var>40.3</var>Minnesota Statutes, section 216C.052, are transferred to the Minnesota Department of <br/>
<a id="pl.40.4"></a><var>40.4</var>Commerce under Minnesota Statutes, section 15.039.<br/>
<br/>
<a id="bill.4.13.0"></a><a id="pl.40.5"></a><var>40.5</var>    Sec. 13. <b>TRANSMISSION AUTHORITY AND INTERCONNECTION </b><br/>
<a id="pl.40.6"></a><var>40.6</var><b>EVALUATIONS.</b><br/>
<a id="pl.40.7"></a><var>40.7</var>    The reliability administrator shall, in consultation with interested stakeholders: <br/>
<a id="pl.40.8"></a><var>40.8</var>    (1) review the structures, powers, and duties for constructing, owning, maintaining, <br/>
<a id="pl.40.9"></a><var>40.9</var>and operating transmission facilities of state transmission authorities established in <br/>
<a id="pl.40.10"></a><var>40.10</var>Kansas, North Dakota, South Dakota, and Wyoming, and evaluate whether the existence <br/>
<a id="pl.40.11"></a><var>40.11</var>of a similar organization in Minnesota would have the potential to increase the reliability <br/>
<a id="pl.40.12"></a><var>40.12</var>and efficiency of the electrical grid in the state; hasten the development of needed <br/>
<a id="pl.40.13"></a><var>40.13</var>transmission lines; accelerate the development of renewable energy projects, especially in <br/>
<a id="pl.40.14"></a><var>40.14</var>rural areas of the state; and reduce delivered energy costs to Minnesota ratepayers; and <br/>
<a id="pl.40.15"></a><var>40.15</var>    (2) assess the potential for and barriers to interconnecting dispersed generation <br/>
<a id="pl.40.16"></a><var>40.16</var>projects to locations on the electric grid where a generator interconnection would not be <br/>
<a id="pl.40.17"></a><var>40.17</var>subject to the interconnection rules of the Federal Energy Regulatory Commission or the <br/>
<a id="pl.40.18"></a><var>40.18</var>Midwest Independent System Operator. <br/>
<a id="pl.40.19"></a><var>40.19</var>No technical or engineering analyses are necessary in order to complete these duties. The <br/>
<a id="pl.40.20"></a><var>40.20</var>reliability administrator must report its findings and any recommendations to the chairs of <br/>
<a id="pl.40.21"></a><var>40.21</var>the senate and house of representatives committees with jurisdiction over energy policy by <br/>
<a id="pl.40.22"></a><var>40.22</var>February 15, 2008.<br/>
<br/>
<a id="bill.4.14.0"></a><a id="pl.40.23"></a><var>40.23</var>    Sec. 14. <b> REPEALER.</b><br/>
<a id="pl.40.24"></a><var>40.24</var>Laws 2007, chapter 3, section 3, is repealed.<br/>
<br/>
<a id="bill.5.0.0"></a>

<a id="bill.5.1.0"></a><a id="pl.40.27"></a><var>40.27</var>    Section 1. <b>[216H.001] FINDINGS; CITATION.</b><br/>
<a id="pl.40.28"></a><var>40.28</var>    (a) The legislature finds that the state has a vital interest in preventing or mitigating <br/>
<a id="pl.40.29"></a><var>40.29</var>harms associated with global warming and in reducing Minnesota's greenhouse gas <br/>
<a id="pl.40.30"></a><var>40.30</var>emissions. The legislature recognizes that substantial reductions in emissions of <br/>
<a id="pl.40.31"></a><var>40.31</var>greenhouse gases are necessary to avoid dangerous climate changes in the future. The <br/>
<a id="pl.40.32"></a><var>40.32</var>legislature finds that taking steps to reduce Minnesota's greenhouse gas emissions today <br/>
<a id="pl.40.33"></a><var>40.33</var>and planning for long-term reductions will reduce the need for more disruptive emission <br/>
<a id="pl.41.1"></a><var>41.1</var>reductions later, and that to achieve the purposes of this act, all emissions associated <br/>
<a id="pl.41.2"></a><var>41.2</var>with electricity generated or consumed within the state must be subject to the state's <br/>
<a id="pl.41.3"></a><var>41.3</var>emissions-reduction goals. The legislature further finds that Minnesota's economy will <br/>
<a id="pl.41.4"></a><var>41.4</var>benefit by showing leadership in the transition away from climate-damaging technologies <br/>
<a id="pl.41.5"></a><var>41.5</var>and toward renewable power, biofuels, and energy efficiency. The legislature recognizes <br/>
<a id="pl.41.6"></a><var>41.6</var>that achieving these ends will only occur by close cooperation with other states and may <br/>
<a id="pl.41.7"></a><var>41.7</var>require the state to enter into binding agreements with other units of government.<br/>
<a id="pl.41.8"></a><var>41.8</var>    (b) This chapter may be referred to as the Global Warming Mitigation Act of 2007.<br/>
<br/>
<a id="bill.5.2.0"></a><a id="pl.41.9"></a><var>41.9</var>    Sec. 2. <b>[216H.01] DEFINITIONS.</b><br/>
<a id="pl.41.10"></a><var>41.10</var>    Subdivision 1. <b>Scope.</b> For the purposes of this chapter, the terms defined in this <br/>
<a id="pl.41.11"></a><var>41.11</var>section have the meanings given them.<br/>
<a id="pl.41.12"></a><var>41.12</var>    Subd. 2. <b>Allowance.</b> "Allowance" means limited authorization from a state <br/>
<a id="pl.41.13"></a><var>41.13</var>regulatory agency to emit up to one ton of carbon dioxide or carbon dioxide equivalent <br/>
<a id="pl.41.14"></a><var>41.14</var>into the atmosphere. This limited authorization does not constitute a property right.<br/>
<a id="pl.41.15"></a><var>41.15</var>    Subd. 3. <b>Cap and trade system.</b> "Cap and trade system" means a regulatory system <br/>
<a id="pl.41.16"></a><var>41.16</var>that imposes a limit on the aggregate air pollutant emissions of a group of sources, requires <br/>
<a id="pl.41.17"></a><var>41.17</var>those subject to the cap to own an allowance for each ton of the air pollutant emitted, and <br/>
<a id="pl.41.18"></a><var>41.18</var>allows for market-based trading of those allowances.<br/>
<a id="pl.41.19"></a><var>41.19</var>    Subd. 4. <b>Carbon dioxide equivalent.</b> "Carbon dioxide equivalent" means the <br/>
<a id="pl.41.20"></a><var>41.20</var>quantity of a given greenhouse gas multiplied by its global warming potential. <br/>
<a id="pl.41.21"></a><var>41.21</var>    Subd. 5. <b>Global warming potential.</b> "Global warming potential" means a measure <br/>
<a id="pl.41.22"></a><var>41.22</var>of the radiative efficiency or heat-absorbing ability of a particular gas relative to that of <br/>
<a id="pl.41.23"></a><var>41.23</var>carbon dioxide after taking into account the decay rate of each gas, that is, the amount <br/>
<a id="pl.41.24"></a><var>41.24</var>removed from the atmosphere over a given number of years, relative to that of carbon <br/>
<a id="pl.41.25"></a><var>41.25</var>dioxide.<br/>
<a id="pl.41.26"></a><var>41.26</var>    Subd. 6. <b>Greenhouse gas emissions source.</b> "Greenhouse gas emissions source" <br/>
<a id="pl.41.27"></a><var>41.27</var>means any anthropogenic physical unit or process that releases greenhouse gases into <br/>
<a id="pl.41.28"></a><var>41.28</var>the atmosphere.<br/>
<a id="pl.41.29"></a><var>41.29</var>    Subd. 7. <b>Greenhouse gases.</b> "Greenhouse gases" include carbon dioxide, methane, <br/>
<a id="pl.41.30"></a><var>41.30</var>nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride or any other <br/>
<a id="pl.41.31"></a><var>41.31</var>chemical that is determined by the Pollution Control Agency to contribute comparably to <br/>
<a id="pl.41.32"></a><var>41.32</var>global climate change and that is emitted by anthropogenic sources.<br/>
<a id="pl.41.33"></a><var>41.33</var>    Subd. 8. <b>New large energy facility.</b> "New large energy facility" means a large <br/>
<a id="pl.41.34"></a><var>41.34</var>energy facility, as defined in section 216B.2421, subdivision 2, clauses (1) to (8), that <br/>
<a id="pl.41.35"></a><var>41.35</var>is not in operation as of January 1, 2007, but does not include a facility that (1) uses <br/>
<a id="pl.42.1"></a><var>42.1</var>natural gas as a primary fuel, (2) is designed to provide peaking, emergency backup, <br/>
<a id="pl.42.2"></a><var>42.2</var>or contingency services, (3) uses a simple cycle turbine technology, (4) is capable of <br/>
<a id="pl.42.3"></a><var>42.3</var>achieving full load operations within 45 minutes of startup, and (5) has received a <br/>
<a id="pl.42.4"></a><var>42.4</var>certificate of need under section 216B.243.<br/>
<a id="pl.42.5"></a><var>42.5</var>    Subd. 9. <b>Person.</b> "Person" has the meaning given in section 216E.01.<br/>
<a id="pl.42.6"></a><var>42.6</var>    Subd. 10. <b>Statewide greenhouse gas emissions.</b> "Statewide greenhouse gas <br/>
<a id="pl.42.7"></a><var>42.7</var>emissions" means the total annual emissions of greenhouse gases within the state and all <br/>
<a id="pl.42.8"></a><var>42.8</var>emissions of greenhouse gases from the generation of electricity imported from outside the <br/>
<a id="pl.42.9"></a><var>42.9</var>state and consumed in Minnesota. Emissions associated with transmission and distribution <br/>
<a id="pl.42.10"></a><var>42.10</var>line losses are included in this definition. Statewide emissions are expressed in tons of <br/>
<a id="pl.42.11"></a><var>42.11</var>carbon dioxide equivalent. Carbon dioxide that is injected into geological formations to <br/>
<a id="pl.42.12"></a><var>42.12</var>prevent its release to the atmosphere in compliance with applicable laws, and emissions <br/>
<a id="pl.42.13"></a><var>42.13</var>associated with the combustion of fuels other than coal, petroleum, and natural gas are not <br/>
<a id="pl.42.14"></a><var>42.14</var>counted as contributing to statewide greenhouse gas emissions.<br/>
<a id="pl.42.15"></a><var>42.15</var>    Subd. 11. <b>Statewide power sector carbon dioxide emissions.</b> "Statewide power <br/>
<a id="pl.42.16"></a><var>42.16</var>sector carbon dioxide emissions" means the total annual emissions of carbon dioxide  from <br/>
<a id="pl.42.17"></a><var>42.17</var>the generation of electricity within the state and all emissions of carbon dioxide from the <br/>
<a id="pl.42.18"></a><var>42.18</var>generation of electricity imported from outside the state and consumed in Minnesota. <br/>
<a id="pl.42.19"></a><var>42.19</var>Emissions associated with transmission and distribution line losses are included in this <br/>
<a id="pl.42.20"></a><var>42.20</var>definition. Carbon dioxide that is injected into geological formations to prevent its release <br/>
<a id="pl.42.21"></a><var>42.21</var>to the atmosphere in compliance with applicable laws, and emissions associated with <br/>
<a id="pl.42.22"></a><var>42.22</var>the combustion of fuels other than coal, petroleum, and natural gas are not counted as <br/>
<a id="pl.42.23"></a><var>42.23</var>contributing to statewide power sector carbon dioxide emissions.<br/>
<br/>
<a id="bill.5.3.0"></a><a id="pl.42.24"></a><var>42.24</var>    Sec. 3. <b>[216H.02] GREENHOUSE GAS EMISSIONS-REDUCTION GOALS. </b><br/>
<a id="pl.42.25"></a><var>42.25</var>    It is the state's goal to reduce statewide greenhouse gas emissions to a level at least <br/>
<a id="pl.42.26"></a><var>42.26</var>15 percent below 2005 emission levels by 2015, to a level at least 30 percent below 2005 <br/>
<a id="pl.42.27"></a><var>42.27</var>emission levels by 2025, and to a level at least 80 percent below 2005 emission levels <br/>
<a id="pl.42.28"></a><var>42.28</var>by 2050.<br/>
<br/>
<a id="bill.5.4.0"></a><a id="pl.42.29"></a><var>42.29</var>    Sec. 4. <b>[216H.04] GREENHOUSE GAS EMISSIONS-REDUCTION PLAN.</b><br/>
<a id="pl.42.30"></a><var>42.30</var>    Subdivision 1. <b>Plan for achieving reductions.</b> (a) By February 1, 2008, the <br/>
<a id="pl.42.31"></a><var>42.31</var>commissioners of the Pollution Control Agency and the Department of Commerce shall <br/>
<a id="pl.42.32"></a><var>42.32</var>submit a plan to the chairs of the senate and house of representatives committees with <br/>
<a id="pl.42.33"></a><var>42.33</var>jurisdiction over energy and environmental policy that contains recommendations on how <br/>
<a id="pl.42.34"></a><var>42.34</var>best to achieve the statewide greenhouse gas emissions-reduction goals established under <br/>
<a id="pl.43.1"></a><var>43.1</var>section 216H.02. The plan must also identify how best to reduce statewide greenhouse gas <br/>
<a id="pl.43.2"></a><var>43.2</var>emissions to a level at least 45 percent below 2005 levels by 2025. The plan must identify, <br/>
<a id="pl.43.3"></a><var>43.3</var>develop, and integrate a full range of greenhouse gas emissions-reduction activities across <br/>
<a id="pl.43.4"></a><var>43.4</var>all economic sectors, regions, and energy uses in the state, and estimate the costs and <br/>
<a id="pl.43.5"></a><var>43.5</var>benefits of each action. The plan must:<br/>
<a id="pl.43.6"></a><var>43.6</var>    (1) estimate statewide greenhouse gas emissions for 2005 and make projections of <br/>
<a id="pl.43.7"></a><var>43.7</var>statewide greenhouse gas emissions for 2015, 2025, and 2050;<br/>
<a id="pl.43.8"></a><var>43.8</var>    (2) estimate the statewide greenhouse gas emissions reductions anticipated from <br/>
<a id="pl.43.9"></a><var>43.9</var>implementation of existing state policies;<br/>
<a id="pl.43.10"></a><var>43.10</var>    (3) include a cap and trade system as described in subdivision 3;<br/>
<a id="pl.43.11"></a><var>43.11</var>    (4) recommend additional policies to achieve statewide greenhouse gas <br/>
<a id="pl.43.12"></a><var>43.12</var>emissions-reduction goals;<br/>
<a id="pl.43.13"></a><var>43.13</var>    (5) include provisions that will ensure that existing policies are evaluated, and that at <br/>
<a id="pl.43.14"></a><var>43.14</var>least every five years any policy changes needed to achieve the statewide greenhouse gas <br/>
<a id="pl.43.15"></a><var>43.15</var>emissions-reduction goals are developed and recommended for legislative action;<br/>
<a id="pl.43.16"></a><var>43.16</var>    (6) recommend a system to require the reporting of statewide greenhouse gas <br/>
<a id="pl.43.17"></a><var>43.17</var>emissions, identifying which facilities must report, how emission estimates should be <br/>
<a id="pl.43.18"></a><var>43.18</var>made, and other reporting requirements that will ensure the collection of emissions <br/>
<a id="pl.43.19"></a><var>43.19</var>information needed to reliably document statewide greenhouse gas emission levels and <br/>
<a id="pl.43.20"></a><var>43.20</var>implement the plan; and<br/>
<a id="pl.43.21"></a><var>43.21</var>    (7) evaluate the option of exempting a project from the prohibitions contained in <br/>
<a id="pl.43.22"></a><var>43.22</var>section 216H.05, subdivision 1, if the project contributes a specified fee per ton of carbon <br/>
<a id="pl.43.23"></a><var>43.23</var>dioxide emissions emitted annually by the project, the proceeds of which would be used to <br/>
<a id="pl.43.24"></a><var>43.24</var>fund permanent, quantifiable, verifiable, and enforceable reductions in greenhouse gas <br/>
<a id="pl.43.25"></a><var>43.25</var>emissions that would not otherwise have occurred.<br/>
<a id="pl.43.26"></a><var>43.26</var>    (b) In formulating the plan, the commissioners shall consider the broadest possible <br/>
<a id="pl.43.27"></a><var>43.27</var>set of mechanisms to reduce emissions, including, but not limited to, expanding the <br/>
<a id="pl.43.28"></a><var>43.28</var>electric sector cap and trade system established under subdivision 3 to include emissions <br/>
<a id="pl.43.29"></a><var>43.29</var>sources other than electricity generation and greenhouse gases other than carbon dioxide; <br/>
<a id="pl.43.30"></a><var>43.30</var>scheduling reductions of the emissions cap; imposing greenhouse gas taxes, fines, and <br/>
<a id="pl.43.31"></a><var>43.31</var>other penalties; adopting emissions-reduction performance standards for sources of <br/>
<a id="pl.43.32"></a><var>43.32</var>greenhouse gases; establishing financial or other incentives to promote activities that will <br/>
<a id="pl.43.33"></a><var>43.33</var>reduce greenhouse gases; and enhancing existing policies that have the effect of lowering <br/>
<a id="pl.43.34"></a><var>43.34</var>greenhouse gas emissions.<br/>
<a id="pl.43.35"></a><var>43.35</var>    Subd. 2. <b>Planning process.</b> The plan required under subdivision 1 must be <br/>
<a id="pl.43.36"></a><var>43.36</var>developed through a structured, broadly inclusive stakeholder-based review of potential <br/>
<a id="pl.44.1"></a><var>44.1</var>policies and initiatives that can be implemented in Minnesota to reduce greenhouse gas <br/>
<a id="pl.44.2"></a><var>44.2</var>emissions. The stakeholder-based review process must be conducted by a nationally <br/>
<a id="pl.44.3"></a><var>44.3</var>recognized independent expert entity. The commissioner of commerce shall coordinate <br/>
<a id="pl.44.4"></a><var>44.4</var>executive branch participation with this stakeholder process. <br/>
<a id="pl.44.5"></a><var>44.5</var>    Subd. 3. <b>Cap and trade system.</b> (a) The plan must include a cap and trade system <br/>
<a id="pl.44.6"></a><var>44.6</var>incorporating, at a minimum, statewide power sector carbon dioxide emissions. The <br/>
<a id="pl.44.7"></a><var>44.7</var>cap and trade plan must: <br/>
<a id="pl.44.8"></a><var>44.8</var>    (1) set an emissions cap at an initial level to prevent significant increases in statewide <br/>
<a id="pl.44.9"></a><var>44.9</var>greenhouse gas emissions above current levels, with a schedule for lowering the cap <br/>
<a id="pl.44.10"></a><var>44.10</var>periodically to help meet the state's emissions-reduction targets; <br/>
<a id="pl.44.11"></a><var>44.11</var>    (2) maximize Minnesota's ability to enter into allowance trading relationships with <br/>
<a id="pl.44.12"></a><var>44.12</var>other states that have established or are in the process of establishing a cap and trade <br/>
<a id="pl.44.13"></a><var>44.13</var>system regulating greenhouse gas emissions; <br/>
<a id="pl.44.14"></a><var>44.14</var>    (3) evaluate the feasibility of implementing a cap and trade system that does not <br/>
<a id="pl.44.15"></a><var>44.15</var>encompass the entire United States, and identify the impacts on the efficiency and <br/>
<a id="pl.44.16"></a><var>44.16</var>effectiveness of the cap and trade system if restricted to Minnesota alone, if expanded <br/>
<a id="pl.44.17"></a><var>44.17</var>to include surrounding midwestern states, and if Minnesota were to join other emerging <br/>
<a id="pl.44.18"></a><var>44.18</var>regional systems with states that are planning to implement  a cap and trade system;<br/>
<a id="pl.44.19"></a><var>44.19</var>    (4) evaluate whether and to what extent a party subject to the cap should receive <br/>
<a id="pl.44.20"></a><var>44.20</var>credit for offsetting emissions by implementing projects that reduce greenhouse gas <br/>
<a id="pl.44.21"></a><var>44.21</var>emissions from sources not subject to the cap or absorb and sequester greenhouse gases <br/>
<a id="pl.44.22"></a><var>44.22</var>from the atmosphere; <br/>
<a id="pl.44.23"></a><var>44.23</var>    (5) include methods to ensure that all emissions reductions associated with projects <br/>
<a id="pl.44.24"></a><var>44.24</var>listed in clause (4) are permanent, quantifiable, verifiable, enforceable, and would not <br/>
<a id="pl.44.25"></a><var>44.25</var>have otherwise occurred; <br/>
<a id="pl.44.26"></a><var>44.26</var>    (6) be designed to ensure that the proceeds from auctioning allowances are used to <br/>
<a id="pl.44.27"></a><var>44.27</var>benefit the public, including to help meet the state's emissions-reduction goals in the most <br/>
<a id="pl.44.28"></a><var>44.28</var>efficient and least disruptive way; <br/>
<a id="pl.44.29"></a><var>44.29</var>    (7) estimate likely allowance prices under various scenarios, including the impact <br/>
<a id="pl.44.30"></a><var>44.30</var>on allowance prices of constructing additional power plants subject to the cap and trade <br/>
<a id="pl.44.31"></a><var>44.31</var>system; <br/>
<a id="pl.44.32"></a><var>44.32</var>    (8) recommend ways to minimize any rate impacts on energy consumers; <br/>
<a id="pl.44.33"></a><var>44.33</var>    (9) suggest procedures to award appropriate credit to entities that have voluntarily <br/>
<a id="pl.44.34"></a><var>44.34</var>reduced their greenhouse gas emissions prior to implementation of the cap and trade <br/>
<a id="pl.44.35"></a><var>44.35</var>system; <br/>
<a id="pl.45.1"></a><var>45.1</var>    (10) ensure to the extent practicable that emissions reductions made in this state do <br/>
<a id="pl.45.2"></a><var>45.2</var>not cause emissions increases outside the state; <br/>
<a id="pl.45.3"></a><var>45.3</var>    (11) identify technologies and industries likely to thrive in a carbon-constrained <br/>
<a id="pl.45.4"></a><var>45.4</var>future; <br/>
<a id="pl.45.5"></a><var>45.5</var>    (12) maximize economic development in rural areas from the development of <br/>
<a id="pl.45.6"></a><var>45.6</var>renewable energy sources and proven terrestrial sequestration practices; and <br/>
<a id="pl.45.7"></a><var>45.7</var>    (13) suggest methods to calculate carbon dioxide emissions associated with <br/>
<a id="pl.45.8"></a><var>45.8</var>electricity imported from outside the state.<br/>
<a id="pl.45.9"></a><var>45.9</var>    Subd. 4. <b>Regional activities.</b> It shall be an executive branch responsibility to work <br/>
<a id="pl.45.10"></a><var>45.10</var>with other states in the midwest region to develop and implement a regional approach to <br/>
<a id="pl.45.11"></a><var>45.11</var>reducing greenhouse gas emissions from activities in the region, including consulting <br/>
<a id="pl.45.12"></a><var>45.12</var>on expanding the cap and trade system described in subdivision 3. The commissioner <br/>
<a id="pl.45.13"></a><var>45.13</var>of commerce shall coordinate Minnesota's regional activities under this subdivision <br/>
<a id="pl.45.14"></a><var>45.14</var>and report to the legislative committees in the senate and house of representatives with <br/>
<a id="pl.45.15"></a><var>45.15</var>jurisdiction over energy and environmental policy by February 1, 2008, and February 1, <br/>
<a id="pl.45.16"></a><var>45.16</var>2009, on the progress made and recommendations for further action.<br/>
<br/>
<a id="bill.5.5.0"></a><a id="pl.45.17"></a><var>45.17</var>    Sec. 5. <b>[216H.05] NO LONG-TERM INCREASE FROM POWER PLANTS.</b><br/>
<a id="pl.45.18"></a><var>45.18</var>    Subdivision 1. <b>Long-term increased emissions from power plants prohibited.</b><br/>
<a id="pl.45.19"></a><var>45.19</var>    Until the cap and trade system described in section 216H.04, subdivision 3, is fully <br/>
<a id="pl.45.20"></a><var>45.20</var>implemented, and except as allowed in subdivision 2, no person shall: <br/>
<a id="pl.45.21"></a><var>45.21</var>    (1) construct within the state a new large energy facility that would contribute to <br/>
<a id="pl.45.22"></a><var>45.22</var>statewide power sector carbon dioxide emissions; <br/>
<a id="pl.45.23"></a><var>45.23</var>    (2) import or commit to import from outside the state power from a new large energy <br/>
<a id="pl.45.24"></a><var>45.24</var>facility that would contribute to statewide power sector carbon dioxide emissions; or <br/>
<a id="pl.45.25"></a><var>45.25</var>    (3) enter into a new long-term power purchase agreement that would increase <br/>
<a id="pl.45.26"></a><var>45.26</var>statewide power sector carbon dioxide emissions. For purposes of this section, a long-term <br/>
<a id="pl.45.27"></a><var>45.27</var>power purchase agreement means an agreement to purchase 50 megawatts of capacity or <br/>
<a id="pl.45.28"></a><var>45.28</var>more for a term exceeding five years. This prohibition does not apply to an agreement in <br/>
<a id="pl.45.29"></a><var>45.29</var>effect as of January 1, 2007, nor to the renewal of such an agreement.<br/>
<a id="pl.45.30"></a><var>45.30</var>    Subd. 2. <b>Exception for facilities that offset emissions.</b> (a) The prohibitions in <br/>
<a id="pl.45.31"></a><var>45.31</var>subdivision 1 do not apply if the project proponent demonstrates to the Public Utilities <br/>
<a id="pl.45.32"></a><var>45.32</var>Commission's satisfaction that it will offset the new contribution to statewide power sector <br/>
<a id="pl.45.33"></a><var>45.33</var>carbon dioxide emissions with a carbon dioxide reduction project identified in paragraph <br/>
<a id="pl.45.34"></a><var>45.34</var>(b) and in compliance with paragraph (c).<br/>
<a id="pl.46.1"></a><var>46.1</var>    (b) A project proponent may offset the new contribution to statewide power sector <br/>
<a id="pl.46.2"></a><var>46.2</var>carbon dioxide emissions in either, or a combination of both, of the following ways:<br/>
<a id="pl.46.3"></a><var>46.3</var>    (1) by reducing an existing facility's contribution to statewide power sector carbon <br/>
<a id="pl.46.4"></a><var>46.4</var>dioxide emissions in an amount equal to or greater than the proposed new contribution to <br/>
<a id="pl.46.5"></a><var>46.5</var>statewide power sector carbon dioxide emissions; or<br/>
<a id="pl.46.6"></a><var>46.6</var>    (2) by purchasing carbon dioxide allowances from a state or group of states that <br/>
<a id="pl.46.7"></a><var>46.7</var>has a mandatory carbon dioxide cap and trade system in place that produces verifiable <br/>
<a id="pl.46.8"></a><var>46.8</var>emissions reductions.<br/>
<a id="pl.46.9"></a><var>46.9</var>    (c) The Public Utilities Commission shall not find that a proposed carbon dioxide <br/>
<a id="pl.46.10"></a><var>46.10</var>reduction project identified in paragraph (b) acceptably offsets a new contribution <br/>
<a id="pl.46.11"></a><var>46.11</var>to statewide power sector carbon dioxide emissions unless the proposed offsets are <br/>
<a id="pl.46.12"></a><var>46.12</var>permanent, quantifiable, verifiable, enforceable, and would not have otherwise occurred. <br/>
<a id="pl.46.13"></a><var>46.13</var>Emissions that have been offset under this subdivision and emissions exempted under <br/>
<a id="pl.46.14"></a><var>46.14</var>subdivision 3 continue to be subject to the requirements of the cap and trade system <br/>
<a id="pl.46.15"></a><var>46.15</var>described in section 216H.04, subdivision 3, when implemented.<br/>
<a id="pl.46.16"></a><var>46.16</var>    Subd. 3. <b>Exception for new steel production facility.</b> The prohibitions in <br/>
<a id="pl.46.17"></a><var>46.17</var>subdivision 1 do not apply to increases in statewide power sector carbon dioxide <br/>
<a id="pl.46.18"></a><var>46.18</var>emissions from that portion of a new large energy facility or new long-term power <br/>
<a id="pl.46.19"></a><var>46.19</var>purchase agreement that supplies electricity to a new steel production project located in a <br/>
<a id="pl.46.20"></a><var>46.20</var>taconite tax relief area that has applied for an air quality permit from the Pollution Control <br/>
<a id="pl.46.21"></a><var>46.21</var>Agency prior to January 1, 2007, provided that the commission determines that the new <br/>
<a id="pl.46.22"></a><var>46.22</var>steel production project is designed to meet the highest energy efficiency standards in its <br/>
<a id="pl.46.23"></a><var>46.23</var>industry.<br/>
<a id="pl.46.24"></a><var>46.24</var>    Subd. 4. <b>Enforcement.</b> Whenever the commission or department determines that <br/>
<a id="pl.46.25"></a><var>46.25</var>any person is violating or about to violate this section, it shall refer the matter to the <br/>
<a id="pl.46.26"></a><var>46.26</var>attorney general who shall take appropriate legal action. This section may be enforced by <br/>
<a id="pl.46.27"></a><var>46.27</var>the attorney general on the same basis as a law listed in section 8.31, subdivision 1.<br/>
<br/>
<a id="bill.5.6.0"></a><a id="pl.46.28"></a><var>46.28</var>    Sec. 6. <b>[216H.06] GREENHOUSE GAS EMISSIONS CONSIDERATION IN </b><br/>
<a id="pl.46.29"></a><var>46.29</var><b>RESOURCE PLANNING.</b><br/>
<a id="pl.46.30"></a><var>46.30</var>    By January 1, 2008, the Public Utilities Commission shall establish an estimate of <br/>
<a id="pl.46.31"></a><var>46.31</var>the likely range of costs of future carbon dioxide regulation on electricity generation. <br/>
<a id="pl.46.32"></a><var>46.32</var>The estimate, which may be made in a commission order, must be used in all electricity <br/>
<a id="pl.46.33"></a><var>46.33</var>generation resource acquisition proceedings. The estimates, and annual updates, must be <br/>
<a id="pl.46.34"></a><var>46.34</var>made following informal proceedings that allow interested parties to submit comments.<br/>
<br/>
<a id="bill.5.7.0"></a><a id="pl.47.1"></a><var>47.1</var>    Sec. 7. <b>[216H.07] ENFORCEABILITY.</b><br/>
<a id="pl.47.2"></a><var>47.2</var>    In addition to any other remedies provided by law, the failure to carry out any <br/>
<a id="pl.47.3"></a><var>47.3</var>requirement established by or pursuant to this chapter shall be treated as a violation of an <br/>
<a id="pl.47.4"></a><var>47.4</var>environmental standard and is enforceable under chapter 116B.<br/>
<br/>
<a id="bill.6.0.0"></a>

<a id="bill.6.1.0"></a><a id="pl.47.7"></a><var>47.7</var>    Section 1. Minnesota Statutes 2006, section 216B.1691, subdivision 5, as amended by <br/>
<a id="pl.47.8"></a><var>47.8</var>Laws 2007, chapter 3, section 1, subdivision 5, is amended to read:<br/>
<a id="pl.47.9"></a><var>47.9</var>    Subd. 5. <b>Technology based on fuel combustion.</b> (a) Electricity produced by fuel <br/>
<a id="pl.47.10"></a><var>47.10</var>combustion through fuel blending or co-firing under paragraph (b) may only count toward <br/>
<a id="pl.47.11"></a><var>47.11</var>a utility's objectives or standards if the generation facility:<br/>
<a id="pl.47.12"></a><var>47.12</var>    (1) was constructed in compliance with new source performance standards <br/>
<a id="pl.47.13"></a><var>47.13</var>promulgated under the federal Clean Air Act for a generation facility of that type; or<br/>
<a id="pl.47.14"></a><var>47.14</var>    (2) employs the maximum achievable or best available control technology available <br/>
<a id="pl.47.15"></a><var>47.15</var>for a generation facility of that type.<br/>
<a id="pl.47.16"></a><var>47.16</var>    (b) An eligible energy technology may blend or co-fire a fuel listed in subdivision <br/>
<a id="pl.47.17"></a><var>47.17</var>1, paragraph (a), clause (1) (5), with other fuels in the generation facility, but only the <br/>
<a id="pl.47.18"></a><var>47.18</var>percentage of electricity that is attributable to a fuel listed in that clause can be counted <br/>
<a id="pl.47.19"></a><var>47.19</var>toward an electric utility's renewable energy objectives.<br/>
<br/>
<a id="bill.6.2.0"></a><a id="pl.47.20"></a><var>47.20</var>    Sec. 2. Minnesota Statutes 2006, section 216B.1691, subdivision 7, as added by Laws <br/>
<a id="pl.47.21"></a><var>47.21</var>2007, chapter 3, section 1, subdivision 7, is amended to read:<br/>
<a id="pl.47.22"></a><var>47.22</var>    Subd. 7. <b>Compliance.</b> The commission must regularly investigate whether an <br/>
<a id="pl.47.23"></a><var>47.23</var>electric utility is in compliance with its good-faith objective under subdivision 2 and <br/>
<a id="pl.47.24"></a><var>47.24</var>standard obligation under subdivision 2a. If the commission finds noncompliance, it may <br/>
<a id="pl.47.25"></a><var>47.25</var>order the electric utility to construct facilities, purchase energy generated by eligible <br/>
<a id="pl.47.26"></a><var>47.26</var>energy technology, purchase renewable energy credits, or engage in other activities <br/>
<a id="pl.47.27"></a><var>47.27</var>to achieve compliance. If an electric utility fails to comply with an order under this <br/>
<a id="pl.47.28"></a><var>47.28</var>subdivision, the commission may impose a financial penalty on the electric utility in an <br/>
<a id="pl.47.29"></a><var>47.29</var>amount not to exceed the estimated cost of the electric utility to achieve compliance. The <br/>
<a id="pl.47.30"></a><var>47.30</var>penalty may not exceed the lesser of the cost of constructing facilities or purchasing <br/>
<a id="pl.47.31"></a><var>47.31</var>credits. The commission must deposit financial penalties imposed under this subdivision <br/>
<a id="pl.47.32"></a><var>47.32</var>in the energy and conservation account established in the special revenue fund under <br/>
<a id="pl.47.33"></a><var>47.33</var>section 216B.241, subdivision 2a. This subdivision is in addition to and does not limit any <br/>
<a id="pl.47.34"></a><var>47.34</var>other authority of the commission to enforce this section.<br/>