1.1 	A bill for an act
1.2 	relating to energy; exempting sales of natural gas for use on farms or ranches 
1.3 	from surcharges for utility low-income affordability programs;amending 
1.4 	Minnesota Statutes 2008, section 216B.16, subdivision 15.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2008, section 216B.16, subdivision 15, is amended to 
1.7 	read:
1.8 		Subd. 15.Low-income affordability programs. (a) The commission must 
1.9 	consider ability to pay as a factor in setting utility rates and may establish affordability 
1.10 	programs for low-income residential ratepayers in order to ensure affordable, reliable, and 
1.11 	continuous service to low-income utility customers. By September 1, 2007, a public 
1.12 	utility serving low-income residential ratepayers who use natural gas for heating must 
1.13 	file an affordability program with the commission. For purposes of this subdivision, 
1.14 	"low-income residential ratepayers" means ratepayers who receive energy assistance from 
1.15 	the low-income home energy assistance program (LIHEAP).
1.16 	(b) Any affordability program the commission orders a utility to implement must:
1.17 	(1) lower the percentage of income that participating low-income households devote 
1.18 	to energy bills;
1.19 	(2) increase participating customer payments over time by increasing the frequency 
1.20 	of payments;
1.21 	(3) decrease or eliminate participating customer arrears;
1.22 	(4) lower the utility costs associated with customer account collection activities; and 
1.23 	(5) coordinate the program with other available low-income bill payment assistance 
1.24 	and conservation resources. 
2.1 	(c) In ordering affordability programs, the commission may require public utilities to 
2.2 	file program evaluations that measure the effect of the affordability program on:
2.3 	(1) the percentage of income that participating households devote to energy bills;
2.4 	(2) service disconnections; and
2.5 	(3) frequency of customer payments, utility collection costs, arrearages, and bad 
2.6 	debt.
2.7 	(d) The commission must issue orders necessary to implement, administer, and 
2.8 	evaluate affordability programs, and to allow a utility to recover program costs, including 
2.9 	administrative costs, on a timely basis. The commission may not allow a utility to recover 
2.10 	administrative costs, excluding start-up costs, in excess of five percent of total program 
2.11 	costs, or program evaluation costs in excess of two percent of total program costs. The 
2.12 	commission must permit deferred accounting, with carrying costs, for recovery of program 
2.13 	costs incurred during the period between general rate cases.
2.14 	(e) Public utilities may use information collected or created for the purpose of 
2.15 	administering energy assistance to administer affordability programs.
2.16 	(f) A public utility may not impose a surcharge for the purposes of this subdivision 
2.17 	on natural gas sold for agricultural consumption on agricultural land used for the 
2.18 	commercial production of agricultural crops, livestock, poultry, bees, milk or dairy 
2.19 	products, fruits, or other horticultural products.

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