1.1 	A bill for an act
1.2 	relating to energy; modifying provisions relating to public utilities, energy 
1.3 	conservation, renewable energy, and nuclear power;amending Minnesota 
1.4 	Statutes 2008, sections 216B.1691, as amended; 216B.241, as amended; 
1.5 	216B.243, subdivision 3b; 297A.68, by adding a subdivision; repealing 
1.6 	Minnesota Statutes 2008, sections 216B.1612, subdivisions 1, 3, 4, 5, 6, 7, 8, 
1.7 	9; 216B.1681; 216B.1691, subdivision 7; 216B.2401; 216B.2412, subdivisions 
1.8 	1, 3; 216C.03; 216C.05, subdivision 2; 216H.01; 216H.02; 216H.03; 216H.06; 
1.9 	Minnesota Statutes 2009 Supplement, sections 216B.1612, subdivision 2; 
1.10 	216B.2412, subdivision 2.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	ARTICLE 1
1.13 	CONSERVATION

1.14 	Section 1. Minnesota Statutes 2008, section 216B.241, as amended by Laws 2009, 
1.15 	chapter 86, article 1, section 31; Laws 2009, chapter 110, sections 15, 16, 17, 18; Laws 
1.16 	2009, chapter 134, section 5, is amended to read:
1.17 	216B.241 ENERGY CONSERVATION IMPROVEMENT.
1.18 		Subdivision 1.Definitions. For purposes of this section and section 216B.16, 
1.19 	subdivision 6b, the terms defined in this subdivision have the meanings given them.
1.20 	(a) "Commission" means the Public Utilities Commission.
1.21 	(b) "Commissioner" means the commissioner of commerce.
1.22 	(c) "Customer facility" means all buildings, structures, equipment, and installations 
1.23 	at a single site.
1.24 	(d) "Department" means the Department of Commerce.
2.1 	(e) "Energy conservation" means demand-side management of energy supplies 
2.2 	resulting in a net reduction in energy use. Load management that reduces overall energy 
2.3 	use is energy conservation.
2.4 	(f) "Energy conservation improvement" means a project that results in energy 
2.5 	efficiency or energy conservation. Energy conservation improvement may include waste 
2.6 	heat recovery converted into electricity but does not include electric utility infrastructure 
2.7 	projects approved by the commission under section 216B.1636.
2.8 	(g) "Energy efficiency" means measures or programs, including energy conservation 
2.9 	measures or programs, that target consumer behavior, equipment, processes, or devices 
2.10 	designed to produce either an absolute decrease in consumption of electric energy or 
2.11 	natural gas or a decrease in consumption of electric energy or natural gas on a per unit 
2.12 	of production basis without a reduction in the quality or level of service provided to 
2.13 	the energy consumer.
2.14 	(h) "Gross annual retail energy sales" means annual electric sales to all retail 
2.15 	customers in a utility's or association's Minnesota service territory or natural gas 
2.16 	throughput to all retail customers, including natural gas transportation customers, on a 
2.17 	utility's distribution system in Minnesota. For purposes of this section, gross annual 
2.18 	retail energy sales exclude gas sales to a large energy facility and gas and electric sales 
2.19 	to a large electric customer facility exempted by the commissioner under subdivision 
2.20 	1a, paragraph (b).
2.21 	(i) (g) "Investments and expenses of a public utility" includes the investments 
2.22 	and expenses incurred by a public utility in connection with an energy conservation 
2.23 	improvement, including but not limited to:
2.24 	(1) the differential in interest cost between the market rate and the rate charged on a 
2.25 	no-interest or below-market interest loan made by a public utility to a customer for the 
2.26 	purchase or installation of an energy conservation improvement;
2.27 	(2) the difference between the utility's cost of purchase or installation of energy 
2.28 	conservation improvements and any price charged by a public utility to a customer for 
2.29 	such improvements.
2.30 	(j) (h) "Large electric customer facility" means a customer facility that imposes 
2.31 	a peak electrical demand on an electric utility's system of not less than 20,0002,000 
2.32 	kilowatts, measured in the same way as the utility that serves the customer facility 
2.33 	measures electrical demand for billing purposes, and for which electric services are 
2.34 	provided at retail on a single bill by a utility operating in the state.
2.35 	(k) "Large energy facility" has the meaning given it in section 216B.2421, 
2.36 	subdivision 2, clause (1).
3.1 	(l) (i) "Load management" means an activity, service, or technology to change the 
3.2 	timing or the efficiency of a customer's use of energy that allows a utility or a customer 
3.3 	to respond to wholesale market fluctuations or to reduce peak the overall demand for 
3.4 	energy or capacity.
3.5 	(m) "Low-income programs" means energy conservation improvement programs 
3.6 	that directly serve the needs of low-income persons, including low-income renters.
3.7 	(n)(j) "Waste heat recovery converted into electricity" means an energy recovery 
3.8 	process that converts otherwise lost energy from the heat of exhaust stacks or pipes used 
3.9 	for engines or manufacturing or industrial processes, or the reduction of high pressure 
3.10 	in water or gas pipelines.
3.11 		Subd. 1a.Investment, expenditure, and contribution; public utility. (a) For 
3.12 	purposes of this subdivision and subdivision 2, "public utility" has the meaning given it 
3.13 	in section 216B.02, subdivision 4. Each public utility shall spend and invest for energy 
3.14 	conservation improvements under this subdivision and subdivision 2 the following 
3.15 	amounts:
3.16 	(1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues 
3.17 	from service provided in the state;
3.18 	(2) for a utility that furnishes electric service, 1.5 percent of its gross operating 
3.19 	revenues from service provided in the state; and
3.20 	(3) for a utility that furnishes electric service and that operates a nuclear-powered 
3.21 	electric generating plant within the state, two percent of its gross operating revenues 
3.22 	from service provided in the state.
3.23 	For purposes of this paragraph (a), "gross operating revenues" do not include 
3.24 	revenues from large electric customer facilities exempted by the commissioner under 
3.25 	paragraph (b).
3.26 	(b) The owner of a large electric customer facility may petition the commissioner 
3.27 	to exempt both electric and gas utilities serving the large energy customer facility from 
3.28 	the investment and expenditure requirements of paragraph (a) with respect to retail 
3.29 	revenues attributable to the facility. At a minimum, the petition must be supported by 
3.30 	evidence relating to competitive or economic pressures on the customer and a showing 
3.31 	by the customer of reasonable efforts to identify, evaluate, and implement cost-effective 
3.32 	conservation improvements at the facility. If a petition is filed on or before October 1 of 
3.33 	any year, the order of the commissioner to exempt revenues attributable to the facility can 
3.34 	be effective no earlier than January 1 of the following year. The commissioner shall 
3.35 	not grant an exemption if the commissioner determines that granting the exemption is 
3.36 	contrary to the public interest. The commissioner may, after investigation, rescind any 
4.1 	exemption granted under this paragraph upon a determination that the customer is not 
4.2 	continuing to make reasonable efforts to identify, evaluate, and implement cost-effective
4.3 	energy conservation improvements are available at the large electric customer facility. 
4.4 	For the purposes of this paragraph, "cost-effective" means that the projected total cost of 
4.5 	the energy conservation improvement at the large electric customer facility is less than 
4.6 	the projected present value of the energy and demand savings resulting from the energy 
4.7 	conservation improvement. For the purposes of investigations by the commissioner under 
4.8 	this paragraph, the owner of any large electric customer facility shall, upon request, 
4.9 	provide the commissioner with updated information comparable to that originally supplied 
4.10 	in or with the owner's original petition under this paragraph.
4.11 	(c) The commissioner may require investments or spending greater than the amounts 
4.12 	required under this subdivision for a public utility whose most recent advance forecast 
4.13 	required under section 216B.2422 or 216C.17 projects a peak demand deficit of 100 
4.14 	megawatts or greater within five years under midrange forecast assumptions. 
4.15 	(d) A public utility or owner of a large electric customer facility may appeal 
4.16 	a decision of the commissioner under paragraph (b) or (c) to the commission under 
4.17 	subdivision 2. In reviewing a decision of the commissioner under paragraph (b) or (c), 
4.18 	the commission shall rescind the decision if it finds that the required investments or 
4.19 	spending will:
4.20 	(1) not result in cost-effective energy conservation improvements; or
4.21 	(2) otherwise not be in the public interest.
4.22 	(e) Each utility shall determine what portion of the amount it sets aside for 
4.23 	conservation improvement will be used for conservation improvements under subdivision 
4.24 	2 and what portion it will contribute to the energy and conservation account established in 
4.25 	subdivision 2a. A public utility may propose to the commissioner to designate that all 
4.26 	or a portion of funds contributed to the account established in subdivision 2a be used 
4.27 	for research and development projects that can best be implemented on a statewide 
4.28 	basis. Contributions must be remitted to the commissioner by February 1 of each year. 
4.29 	Nothing in this subdivision prohibits a public utility from spending or investing for energy 
4.30 	conservation improvement more than required in this subdivision.
4.31 		Subd. 1b.Conservation improvement by cooperative association or 
4.32 	municipality. (a) This subdivision applies to:
4.33 	(1) a cooperative electric association that provides retail service to its members;
4.34 	(2) a municipality that provides electric service to retail customers; and
5.1 	(3) a municipality with more than 1,000,000,000 cubic feet in annual throughput 
5.2 	sales togross operating revenues in excess of $5,000,000 from sales of natural gas to 
5.3 	retail customers.
5.4 	(b) Each cooperative electric association and municipality subject to this subdivision 
5.5 	shall spend and invest for energy conservation improvements under this subdivision 
5.6 	the following amounts:
5.7 	(1) for a municipality, 0.5 percent of its gross operating revenues from the sale of 
5.8 	gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding 
5.9 	gross operating revenues from electric and gas service provided in the state to large 
5.10 	electric customer facilities; and
5.11 	(2) for a cooperative electric association, 1.5 percent of its gross operating revenues 
5.12 	from service provided in the state, excluding gross operating revenues from service 
5.13 	provided in the state to large electric customer facilities indirectly through a distribution 
5.14 	cooperative electric association.
5.15 	(c) Each municipality and cooperative electric association subject to this subdivision 
5.16 	shall identify and implement energy conservation improvement spending and investments 
5.17 	that are appropriate for the municipality or association, except that a municipality 
5.18 	or association may not spend or invest for energy conservation improvements that 
5.19 	directly benefit a large energy facility or a large electric customer facility for which the 
5.20 	commissioner has issued an exemption under subdivision 1a, paragraph (b).
5.21 	(d) Each municipality and cooperative electric association subject to this subdivision 
5.22 	may spend and invest annually up to ten percent of the total amount required to be spent 
5.23 	and invested on energy conservation improvements under this subdivision on research 
5.24 	and development projects that meet the definition of energy conservation improvement 
5.25 	in subdivision 1 and that are funded directly by the municipality or cooperative electric 
5.26 	association.
5.27 	(e) Load-management activities that do not reduce energy use but that increase the 
5.28 	efficiency of the electric system may be used to meet 50 percent of the conservation 
5.29 	investment and spending requirements of this subdivision.
5.30 	(f) A generation and transmission cooperative electric association that provides 
5.31 	energy services to cooperative electric associations that provide electric service at retail to 
5.32 	consumers may invest in energy conservation improvements on behalf of the associations 
5.33 	it serves and may fulfill the conservation, spending, reporting, and energy-savings goals on 
5.34 	an aggregate basis. A municipal power agency or other not-for-profit entity that provides 
5.35 	energy service to municipal utilities that provide electric service at retail may invest in 
5.36 	energy conservation improvements on behalf of the municipal utilities it serves and may 
6.1 	fulfill the conservation, spending, reporting, and energy-savings goals on an aggregate 
6.2 	basis, under an agreement between the municipal power agency or not-for-profit entity 
6.3 	and each municipal utility for funding the investments.
6.4 	(g) Each municipality or cooperative shall file energy  conservation improvement 
6.5 	plans by June 1 on a schedule determined by order of the commissioner, but at least every 
6.6 	three years. Plans received by June 1 must be approved or approved as modified by the 
6.7 	commissioner by December 1 of the same year.At least every four years, on a schedule 
6.8 	determined by the commissioner, each municipality or cooperative shall file an overview 
6.9 	of its conservation improvement plan with the commissioner. With this overview, the 
6.10 	municipality or cooperative shall also provide an evaluation to the commissioner detailing 
6.11 	its energy conservation improvement spending and investments for the previous period. 
6.12 	The evaluation must briefly describe each conservation program and must specify the 
6.13 	energy savings or increased efficiency in the use of energy within the service territory 
6.14 	of the utility or association that is the result of the spending and investments. The 
6.15 	evaluation must analyze the cost-effectiveness of the utility's or association's conservation 
6.16 	programs, using a list of baseline energy and capacity savings assumptions developed 
6.17 	in consultation with the department. The commissioner shall review each evaluation 
6.18 	and make recommendations, where appropriate, to the municipality or association to 
6.19 	increase the effectiveness of conservation improvement activities. Up to three percent of 
6.20 	a utility's conservation spending obligation under this section may be used for program 
6.21 	preevaluation, testing, and monitoring and program evaluation. The overview and 
6.22 	evaluation filed by a municipality with less than 60,000,000 kilowatt-hours in annual 
6.23 	retail sales of electric service may consist of a letter from the governing board of the 
6.24 	municipal utility to the department providing the amount of annual conservation spending 
6.25 	required of that municipality and certifying that the required amount has been spent on 
6.26 	conservation programs pursuant to this subdivision.
6.27 	(h) The commissioner shall also review each evaluation for whether a portion of the 
6.28 	money spent on residential conservation improvement programs is devoted to programs 
6.29 	that directly address the needs of renters and low-income persons unless an insufficient 
6.30 	number of appropriate programs are available. For the purposes of this subdivision and 
6.31 	subdivision 2, "low-income" means an income at or below 50 percent of the state median 
6.32 	income.
6.33 	(i) As part of its spending for conservation improvement, a municipality or 
6.34 	association may contribute to the energy and conservation account. A municipality or 
6.35 	association may propose to the commissioner to designate that all or a portion of funds 
6.36 	contributed to the account be used for research and development projects that can best 
7.1 	be implemented on a statewide basis. Any amount contributed must be remitted to the 
7.2 	commissioner by February 1 of each year.
7.3 	(j) A municipality may spend up to 50 percent of its required spending under this 
7.4 	section to refurbish an existing district heating or cooling system until July 1, 2007. From 
7.5 	July 1, 2007, through June 30, 2011, expenditures made to refurbish a district heating or 
7.6 	cooling system are considered to be load-management activities under paragraph (e). This 
7.7 	paragraph expires July 1, 2011.
7.8 	(i) The commissioner shall consider and may require a utility, association, or 
7.9 	other entity providing energy efficiency and conservation services under this section to 
7.10 	undertake a program suggested by an outside source, including a political subdivision, 
7.11 	nonprofit corporation, or community organization.
7.12 		Subd. 1c.Energy-saving goals. (a) The commissioner shall establish energy-saving 
7.13 	goals for energy conservation improvement expenditures and shall evaluate an energy 
7.14 	conservation improvement program on how well it meets the goals set.
7.15 	(b) Each individual utility and association shall have an annual energy-savings 
7.16 	goal equivalent to 1.5 percent of gross annual retail energy sales unless modified by the 
7.17 	commissioner under paragraph (d). The savings goals must be calculated based on the 
7.18 	most recent three-year weather normalized average. A utility or association may elect to 
7.19 	carry forward energy savings in excess of 1.5 percent for a year to the succeeding three 
7.20 	calendar years, except that savings from electric utility infrastructure projects allowed 
7.21 	under paragraph (d) may be carried forward for five years. A particular energy savings can 
7.22 	be used only for one year's goal.
7.23 	(c) The commissioner must adopt a filing schedule that is designed to have all 
7.24 	utilities and associations operating under an energy-savings plan by calendar year 2010.
7.25 	(d) In its energy conservation improvement plan filing, a utility or association may 
7.26 	request the commissioner to adjust its annual energy-savings percentage goal based on 
7.27 	its historical conservation investment experience, customer class makeup, load growth, 
7.28 	a conservation potential study, or other factors the commissioner determines warrants 
7.29 	an adjustment. The commissioner may not approve a plan that provides for an annual 
7.30 	energy-savings goal of less than one percent of gross annual retail energy sales from 
7.31 	energy conservation improvements. 
7.32 	A utility or association may include in its energy conservation plan energy savings 
7.33 	from electric utility infrastructure projects approved by the commission under section 
7.34 	216B.1636 or waste heat recovery converted into electricity projects that may count as 
7.35 	energy savings in addition to the minimum energy-savings goal of at least one percent for 
7.36 	energy conservation improvements. Electric utility infrastructure projects must result in 
8.1 	increased energy efficiency greater than that which would have occurred through normal 
8.2 	maintenance activity.
8.3 	(e) An energy-savings goal is not satisfied by attaining the revenue expenditure 
8.4 	requirements of subdivisions 1a and 1b, but can only be satisfied by meeting the 
8.5 	energy-savings goal established in this subdivision.
8.6 	(f) An association or utility is not required to make energy conservation investments 
8.7 	to attain the energy-savings goals of this subdivision that are not cost-effective even 
8.8 	if the investment is necessary to attain the energy-savings goals. For the purpose of 
8.9 	this paragraph, in determining cost-effectiveness, the commissioner shall consider the 
8.10 	costs and benefits to ratepayers, the utility, participants, and society. In addition, the 
8.11 	commissioner shall consider the rate at which an association or municipal utility is 
8.12 	increasing its energy savings and its expenditures on energy conservation.
8.13 	(g) On an annual basis, the commissioner shall produce and make publicly available 
8.14 	a report on the annual energy savings and estimated carbon dioxide reductions achieved 
8.15 	by the energy conservation improvement programs for the two most recent years for 
8.16 	which data is available. The commissioner shall report on program performance both in 
8.17 	the aggregate and for each entity filing an energy conservation improvement plan for 
8.18 	approval or review by the commissioner.
8.19 	(h) By January 15, 2010, the commissioner shall report to the legislature whether 
8.20 	the spending requirements under subdivisions 1a and 1b are necessary to achieve the 
8.21 	energy-savings goals established in this subdivision.
8.22 		Subd. 1d.Technical assistance. The commissioner shall evaluate energy 
8.23 	conservation improvement programs on the basis of cost-effectiveness and the reliability 
8.24 	of the technologies employed. The commissioner shall, by order, establish, maintain, and 
8.25 	update energy-savings assumptions that must be used when filing energy conservation 
8.26 	improvement programs. The commissioner shall establish an inventory of the most 
8.27 	effective energy conservation programs, techniques, and technologies, and encourage all 
8.28 	Minnesota utilities to implement them, where appropriate, in their service territories. 
8.29 	The commissioner shall describe these programs in sufficient detail to provide a utility 
8.30 	reasonable guidance concerning implementation. The commissioner shall prioritize the 
8.31 	opportunities in order of potential energy savings and in order of cost-effectiveness. The 
8.32 	commissioner may contract with a third party to carry out any of the commissioner's duties 
8.33 	under this subdivision, and to obtain technical assistance to evaluate the effectiveness of 
8.34 	any conservation improvement program. The commissioner may assess up to $800,000 
8.35 	annually until June 30, 2009, and $450,000 annually thereafter for the purposes of this 
8.36 	subdivision. The assessments must be deposited in the state treasury and credited to the 
9.1 	energy and conservation account created under subdivision 2a. An assessment made under 
9.2 	this subdivision is not subject to the cap on assessments provided by section 216B.62, or 
9.3 	any other law.
9.4 		Subd. 1e.Applied research and development grants. (a) The commissioner 
9.5 	may, by order, approve and make grants for applied research and development projects 
9.6 	of general applicability that identify new technologies or strategies to maximize energy 
9.7 	savings, improve the effectiveness of energy conservation programs, or document 
9.8 	the carbon dioxide reductions from energy conservation programs. When approving 
9.9 	projects, the commissioner shall consider proposals and comments from utilities and 
9.10 	other interested parties. The commissioner may assess up to $3,600,000 annually for the 
9.11 	purposes of this subdivision. The assessments must be deposited in the state treasury 
9.12 	and credited to the energy and conservation account created under subdivision 2a. An 
9.13 	assessment made under this subdivision is not subject to the cap on assessments provided 
9.14 	by section 216B.62, or any other law.
9.15 	(b) The commissioner, as part of the assessment authorized under paragraph (a), 
9.16 	shall annually assess and grant up to $500,000 for the purpose of subdivision 9.
9.17 		Subd. 1f.Facilities energy efficiency. (a) The commissioner of administration and 
9.18 	the commissioner of commerce shall maintain and, as needed, revise the sustainable 
9.19 	building design guidelines developed under section 16B.325.
9.20 	(b) The commissioner of administration and the commissioner of commerce shall 
9.21 	maintain and update the benchmarking tool developed under Laws 2001, chapter 212, 
9.22 	article 1, section 3, so that all public buildings can use the benchmarking tool to maintain 
9.23 	energy use information for the purposes of establishing energy efficiency benchmarks, 
9.24 	tracking building performance, and measuring the results of energy efficiency and 
9.25 	conservation improvements.
9.26 	(c) The commissioner shall require that utilities include in their conservation 
9.27 	improvement plans programs that facilitate professional engineering verification to qualify 
9.28 	a building as Energy Star-labeled, Leadership in Energy and Environmental Design 
9.29 	(LEED) certified, or Green Globes-certified. The state goal is to achieve certification of 
9.30 	1,000 commercial buildings as Energy Star-labeled, and 100 commercial buildings as 
9.31 	LEED-certified or Green Globes-certified by December 31, 2010.
9.32 	(d) The commissioner may assess up to $500,000 annually for the purposes of this 
9.33 	subdivision. The assessments must be deposited in the state treasury and credited to the 
9.34 	energy and conservation account created under subdivision 2a. An assessment made under 
9.35 	this subdivision is not subject to the cap on assessments provided by section 216B.62, or 
9.36 	any other law.
10.1 		Subd. 1g.Manner of filing and service. (a) A public utility, generation and 
10.2 	transmission cooperative electric association, municipal power agency, cooperative 
10.3 	electric association, and municipal utility shall submit filings to the department via the 
10.4 	department's electronic filing system. The commissioner may approve an exemption 
10.5 	from this requirement in the event an affected utility or association is unable to submit 
10.6 	filings via the department's electronic filing system. All other interested parties shall 
10.7 	submit filings to the department via the department's electronic filing system whenever 
10.8 	practicable but may also file by personal delivery or by mail.
10.9 	(b) Submission of a document to the department's electronic filing system constitutes 
10.10 	service on the department. Where department rule requires service of a notice, order, or 
10.11 	other document by the department, utility, association, or interested party upon persons on 
10.12 	a service list maintained by the department, service may be made by personal delivery, 
10.13 	mail, or electronic service, except that electronic service may only be made upon persons 
10.14 	on the service list who have previously agreed in writing to accept electronic service at an 
10.15 	electronic address provided to the department for electronic service purposes.
10.16 		Subd. 2.Programs. (a) The commissioner may require public utilities to make 
10.17 	investments and expenditures in energy conservation improvements, explicitly setting 
10.18 	forth the interest rates, prices, and terms under which the improvements must be offered to 
10.19 	the customers. The required programs must cover no more than a three-year four-year
10.20 	period. Public utilities shall file conservation improvement plans by June 1, on a schedule 
10.21 	determined by order of the commissioner, but at least every three four years. Plans 
10.22 	received by a public utility by June 1 must be approved or approved as modified by the 
10.23 	commissioner by December 1 of that same year. The commissioner shall evaluate the 
10.24 	program on the basis of cost-effectiveness and the reliability of technologies employed. 
10.25 	The commissioner's order must provide to the extent practicable for a free choice, by 
10.26 	consumers participating in the program, of the device, method, material, or project 
10.27 	constituting the energy conservation improvement and for a free choice of the seller, 
10.28 	installer, or contractor of the energy conservation improvement, provided that the device, 
10.29 	method, material, or project seller, installer, or contractor is duly licensed, certified, 
10.30 	approved, or qualified, including under the residential conservation services program, 
10.31 	where applicable.
10.32 	(b) The commissioner may require a utility to make an energy conservation 
10.33 	improvement investment or expenditure whenever the commissioner finds that the 
10.34 	improvement will result in energy savings at a total cost to the utility less than the cost 
10.35 	to the utility to produce or purchase an equivalent amount of new supply of energy. The 
11.1 	commissioner shall nevertheless ensure that every public utility operate one or more 
11.2 	programs under periodic review by the department.
11.3 	(c) Each public utility subject to subdivision 1a may spend and invest annually up to 
11.4 	ten percent of the total amount required to be spent and invested on energy conservation 
11.5 	improvements under this section by the utility on research and development projects 
11.6 	that meet the definition of energy conservation improvement in subdivision 1 and that 
11.7 	are funded directly by the public utility.
11.8 	(d) A public utility may not spend for or invest in energy conservation improvements 
11.9 	that directly benefit a large energy facility or a large electric customer facility for which 
11.10 	the commissioner has issued an exemption pursuant to subdivision 1a, paragraph (b). The 
11.11 	commissioner shall consider and may require a utility to undertake a program suggested 
11.12 	by an outside source, including a political subdivision, or a nonprofit corporation, or 
11.13 	community organization.
11.14 	(e) The commissioner may, by order, establish a list of programs that may be 
11.15 	offered as energy conservation improvements by a public utility, municipal utility, 
11.16 	cooperative electric association, or other entity providing conservation services pursuant 
11.17 	to this section. The list of programs may include rebates for high-efficiency appliances, 
11.18 	rebates or subsidies for high-efficiency lamps, small business energy audits, and building 
11.19 	recommissioning. The commissioner may, by order, change this list to add or subtract 
11.20 	programs as the commissioner determines is necessary to promote efficient and effective 
11.21 	conservation programs.
11.22 	(f) The commissioner shall ensure that a portion of the money spent on residential 
11.23 	conservation improvement programs is devoted to programs that directly address the 
11.24 	needs of renters and low-income persons, in proportion to the amount the utility has 
11.25 	historically spent on such programs based on the most recent three-year average relative to 
11.26 	the utility's total conservation spending under this section, unless an insufficient number of 
11.27 	appropriate programs are available.
11.28 	(g) A utility, a political subdivision, or a nonprofit or community organization 
11.29 	that has suggested a program, the attorney general acting on behalf of consumers and 
11.30 	small business interests, or a utility customer that has suggested a program and is not 
11.31 	represented by the attorney general under section 8.33 may petition the commission to 
11.32 	modify or revoke a department decision under this section, and the commission may do 
11.33 	so if it determines that the program is not cost-effective, does not adequately address the 
11.34 	residential conservation improvement needs of low-income persons, has a long-range 
11.35 	negative effect on one or more classes of customers, or is otherwise not in the public 
12.1 	interest. The commission shall reject a petition that, on its face, fails to make a reasonable 
12.2 	argument that a program is not in the public interest.
12.3 	(f) (h) The commissioner may order a public utility to include, with the filing of the 
12.4 	utility's proposed conservation improvement plan under paragraph (a), the results of an 
12.5 	independent audit of the utility's conservation improvement programs and expenditures 
12.6 	performed by the department or an auditor with experience in the provision of energy 
12.7 	conservation and energy efficiency services approved by the commissioner and chosen by 
12.8 	the utility. The audit must specify the energy savings or increased efficiency in the use 
12.9 	of energy within the service territory of the utility that is the result of the spending and 
12.10 	investments. The audit must evaluate the cost-effectiveness of the utility's conservation 
12.11 	programs.
12.12 	(i) Up to three percent of a utility's conservation spending obligation under this 
12.13 	section may be used for program preevaluation, testing, and monitoring and program 
12.14 	audit and evaluation.
12.15 		Subd. 2a.Energy and conservation account. The energy and conservation account 
12.16 	is established in the special revenue fund in the state treasury. The commissioner must 
12.17 	deposit money assessed or contributed under subdivisions 1d, 1e, 1f, and 7 in the state 
12.18 	treasury and credit it to the energy and conservation account in the special revenue fund. 
12.19 	Money in the account is appropriated to the commissioner for the purposes of subdivisions 
12.20 	1d, 1e, 1f, and 7. Interest on money in the account accrues to the account.
12.21 		Subd. 2b.Recovery of expenses. The commission shall allow a utility to recover 
12.22 	expenses resulting from a conservation improvement program required by the department 
12.23 	and contributions and assessments to the energy and conservation account, unless the 
12.24 	recovery would be inconsistent with a financial incentive proposal approved by the 
12.25 	commission. The commission shall allow a cooperative electric association subject 
12.26 	to rate regulation under section 216B.026, to recover expenses resulting from energy 
12.27 	conservation improvement programs, load management programs, and assessments 
12.28 	and contributions to the energy and conservation account unless the recovery would be 
12.29 	inconsistent with a financial incentive proposal approved by the commission. In addition, 
12.30 	a utility may file annually, or the Public Utilities Commission may require the utility 
12.31 	to file, and the commission may approve, rate schedules containing provisions for the 
12.32 	automatic adjustment of charges for utility service in direct relation to changes in the 
12.33 	expenses of the utility for real and personal property taxes, fees, and permits, the amounts 
12.34 	of which the utility cannot control. A public utility is eligible to file for adjustment for real 
12.35 	and personal property taxes, fees, and permits under this subdivision only if, in the year 
12.36 	previous to the year in which it files for adjustment, it has spent or invested at least 1.75 
13.1 	percent of its gross revenues from provision of electric service, excluding gross operating 
13.2 	revenues from electric service provided in the state to large electric customer facilities for 
13.3 	which the commissioner has issued an exemption under subdivision 1a, paragraph (b), and 
13.4 	0.6 percent of its gross revenues from provision of gas service, excluding gross operating 
13.5 	revenues from gas services provided in the state to large electric customer facilities for 
13.6 	which the commissioner has issued an exemption under subdivision 1a, paragraph (b), for 
13.7 	that year for energy conservation improvements under this section. 
13.8 		Subd. 2c.Performance incentives. By December 31, 2008, the commission 
13.9 	shall review any incentive plan for energy conservation improvement it has approved 
13.10 	under section 216B.16, subdivision 6c, and adjust the utility performance incentives to 
13.11 	recognize making progress toward and meeting the energy-savings goals established 
13.12 	in subdivision 1c.
13.13 		Subd. 3.Ownership of energy conservation improvement. An energy 
13.14 	conservation improvement made to or installed in a building in accordance with this 
13.15 	section, except systems owned by the utility and designed to turn off, limit, or vary the 
13.16 	delivery of energy, are the exclusive property of the owner of the building except to the 
13.17 	extent that the improvement is subjected to a security interest in favor of the utility in case 
13.18 	of a loan to the building owner. The utility has no liability for loss, damage or injury 
13.19 	caused directly or indirectly by an energy conservation improvement except for negligence 
13.20 	by the utility in purchase, installation, or modification of the product.
13.21 		Subd. 4.Federal law prohibitions. If investments by public utilities in energy 
13.22 	conservation improvements are in any manner prohibited or restricted by federal law 
13.23 	and there is a provision under which the prohibition or restriction may be waived, then 
13.24 	the commission, the governor, or any other necessary state agency or officer shall take 
13.25 	all necessary and appropriate steps to secure a waiver with respect to those public utility 
13.26 	investments in energy conservation improvements included in this section.
13.27 		Subd. 5.Efficient lighting program. (a) Each public utility, cooperative electric 
13.28 	association, and municipal utility that provides electric service to retail customers shall 
13.29 	include as part of its conservation improvement activities a program to strongly encourage 
13.30 	the use of fluorescent and high-intensity discharge lamps. The program must include at 
13.31 	least a public information campaign to encourage use of the lamps and proper management 
13.32 	of spent lamps by all customer classifications.
13.33 	(b) A public utility that provides electric service at retail to 200,000 or more 
13.34 	customers shall establish, either directly or through contracts with other persons, including 
13.35 	lamp manufacturers, distributors, wholesalers, and retailers and local government units, a 
13.36 	system to collect for delivery to a reclamation or recycling facility spent fluorescent and 
14.1 	high-intensity discharge lamps from households and from small businesses as defined in 
14.2 	section 645.445 that generate an average of fewer than ten spent lamps per year.
14.3 	(c) A collection system must include establishing reasonably convenient locations 
14.4 	for collecting spent lamps from households and financial incentives sufficient to encourage 
14.5 	spent lamp generators to take the lamps to the collection locations. Financial incentives 
14.6 	may include coupons for purchase of new fluorescent or high-intensity discharge lamps, 
14.7 	a cash back system, or any other financial incentive or group of incentives designed to 
14.8 	collect the maximum number of spent lamps from households and small businesses that is 
14.9 	reasonably feasible.
14.10 	(d) A public utility that provides electric service at retail to fewer than 200,000 
14.11 	customers, a cooperative electric association, or a municipal utility that provides electric 
14.12 	service at retail to customers may establish a collection system under paragraphs (b) and 
14.13 	(c) as part of conservation improvement activities required under this section.
14.14 	(e) The commissioner of the Pollution Control Agency may not, unless clearly 
14.15 	required by federal law, require a public utility, cooperative electric association, or 
14.16 	municipality that establishes a household fluorescent and high-intensity discharge lamp 
14.17 	collection system under this section to manage the lamps as hazardous waste as long as 
14.18 	the lamps are managed to avoid breakage and are delivered to a recycling or reclamation 
14.19 	facility that removes mercury and other toxic materials contained in the lamps prior to 
14.20 	placement of the lamps in solid waste.
14.21 	(f) If a public utility, cooperative electric association, or municipal utility contracts 
14.22 	with a local government unit to provide a collection system under this subdivision, 
14.23 	the contract must provide for payment to the local government unit of all the unit's 
14.24 	incremental costs of collecting and managing spent lamps.
14.25 	(g) All the costs incurred by a public utility, cooperative electric association, or 
14.26 	municipal utility for promotion and collection of fluorescent and high-intensity discharge 
14.27 	lamps under this subdivision are conservation improvement spending under this section.
14.28 		Subd. 5a.Qualifying solar energy project. (a) A utility or association may include 
14.29 	in its conservation plan programs for the installation of qualifying solar energy projects as 
14.30 	defined by section 216B.2411 to the extent of the spending allowed for generation projects 
14.31 	by section 216B.2411. The cost-effectiveness of a qualifying solar energy project may 
14.32 	be determined by a different standard than for other energy conservation improvements 
14.33 	under this section if the commissioner determines it is in the public interest to do so to 
14.34 	encourage solar energy projects. Energy savings from qualifying solar energy projects 
14.35 	may not be counted toward the minimum energy-savings goal of at least one percent 
15.1 	for energy conservation improvements required under subdivision 1c, but may, if the 
15.2 	conservation plan is approved:
15.3 	(1) be counted toward energy savings above that minimum percentage; and
15.4 	(2) be eligible for a performance incentive under section 216B.16, subdivision 6c, 
15.5 	or 216B.241, subdivision 2c, that is distinct from the incentive for energy conservation 
15.6 	and is based on the competitiveness and cost-effectiveness of solar projects in relation to 
15.7 	other potential solar projects available to the utility.
15.8 	(b) Qualifying solar energy projects may not be considered when establishing 
15.9 	demand-side management targets under section 216B.2422, 216B.243, or any other 
15.10 	section of this chapter.
15.11 		Subd. 5b.Biomethane purchases. (a) A natural gas utility may include in its 
15.12 	conservation plan purchases of biomethane, and may use up to five percent of the total 
15.13 	amount to be spent on energy conservation improvements under this section for that 
15.14 	purpose. The cost-effectiveness of biomethane purchases may be determined by a 
15.15 	different standard than for other energy conservation improvements under this section if 
15.16 	the commissioner determines that doing so is in the public interest in order to encourage 
15.17 	biomethane purchases. Energy savings from purchasing biomethane may not be counted 
15.18 	toward the minimum energy-savings goal of at least one percent for energy conservation 
15.19 	improvements required under subdivision 1c, but may, if the conservation plan is approved:
15.20 	(1) be counted toward energy savings above that minimum percentage; and
15.21 	(2) be considered when establishing performance incentives under subdivision 2c.
15.22 	(b) For the purposes of this subdivision, "biomethane" means biogas produced 
15.23 	through anaerobic digestion of biomass, gasification of biomass, or other effective 
15.24 	conversion processes, that is cleaned and purified into biomethane that meets natural gas 
15.25 	utility quality specifications for use in a natural gas utility distribution system.
15.26 		Subd. 6.Renewable energy research. (a) A public utility that owns a nuclear 
15.27 	generation facility in the state shall spend five percent of the total amount that utility 
15.28 	is required to spend under this section to support basic and applied research and 
15.29 	demonstration activities at the University of Minnesota Initiative for Renewable Energy 
15.30 	and the Environment for the development of renewable energy sources and technologies. 
15.31 	The utility shall transfer the required amount to the University of Minnesota on or before 
15.32 	July 1 of each year and that annual amount shall be deducted from the amount of money the 
15.33 	utility is required to spend under this section. The University of Minnesota shall transfer 
15.34 	at least ten percent of these funds to at least one rural campus or experiment station.
15.35 	(b) Activities funded under this subdivision may include, but are not limited to:
16.1 	(1) environmentally sound production of energy from a renewable energy source 
16.2 	including biomass;
16.3 	(2) environmentally sound production of hydrogen from biomass and any other 
16.4 	renewable energy source for energy storage and energy utilization;
16.5 	(3) development of energy conservation and efficient energy utilization technologies; 
16.6 	(4) energy storage technologies; and
16.7 	(5) analysis of policy options to facilitate adoption of technologies that use or 
16.8 	produce low-carbon renewable energy.
16.9 	(c) Notwithstanding other law to the contrary, the utility may, but is not required to, 
16.10 	spend more than two percent of its gross operating revenues from service provided in this 
16.11 	state under this section or section 216B.2411.
16.12 	(d) For the purposes of this subdivision:
16.13 	(1) "renewable energy source" means hydro, wind, solar, biomass and geothermal 
16.14 	energy, and microorganisms used as an energy source; and
16.15 	(2) "biomass" means plant and animal material, agricultural and forest residues, 
16.16 	mixed municipal solid waste, and sludge from wastewater treatment.
16.17 	(e) This subdivision expires June 30, 2010.
16.18 		Subd. 7.Low-income programs. (a) The commissioner shall ensure that each 
16.19 	utility and association provides low-income programs. When approving spending and 
16.20 	energy-savings goals for low-income programs, the commissioner shall consider historic 
16.21 	spending and participation levels, energy savings for low-income programs, and the 
16.22 	number of low-income persons residing in the utility's service territory. A utility that 
16.23 	furnishes gas service must spend at least 0.2 percent of its gross operating revenue from 
16.24 	residential customers in the state on low-income programs. A utility or association that 
16.25 	furnishes electric service must spend at least 0.1 percent of its gross operating revenue 
16.26 	from residential customers in the state on low-income programs. For a generation and 
16.27 	transmission cooperative association, this requirement shall apply to each association's 
16.28 	members' aggregate gross operating revenue from sale of electricity to residential 
16.29 	customers in the state. Beginning in 2010, a utility or association that furnishes electric 
16.30 	service must spend 0.2 percent of its gross operating revenue from residential customers 
16.31 	in the state on low-income programs.
16.32 	(b) To meet the requirements of paragraph (a), a utility or association may contribute 
16.33 	money to the energy and conservation account. An energy conservation improvement plan 
16.34 	must state the amount, if any, of low-income energy conservation improvement funds the 
16.35 	utility or association will contribute to the energy and conservation account. Contributions 
16.36 	must be remitted to the commissioner by February 1 of each year.
17.1 	(c) The commissioner shall establish low-income programs to utilize money 
17.2 	contributed to the energy and conservation account under paragraph (b). In establishing 
17.3 	low-income programs, the commissioner shall consult political subdivisions, utilities, and 
17.4 	nonprofit and community organizations, especially organizations engaged in providing 
17.5 	energy and weatherization assistance to low-income persons. Money contributed to 
17.6 	the energy and conservation account under paragraph (b) must provide programs for 
17.7 	low-income persons, including low-income renters, in the service territory of the utility or 
17.8 	association providing the money. The commissioner shall record and report expenditures 
17.9 	and energy savings achieved as a result of low-income programs funded through the 
17.10 	energy and conservation account in the report required under subdivision 1c, paragraph 
17.11 	(g). The commissioner may contract with a political subdivision, nonprofit or community 
17.12 	organization, public utility, municipality, or cooperative electric association to implement 
17.13 	low-income programs funded through the energy and conservation account.
17.14 	(d) A utility or association may petition the commissioner to modify its required 
17.15 	spending under paragraph (a) if the utility or association and the commissioner have been 
17.16 	unable to expend the amount required under paragraph (a) for three consecutive years.
17.17 		Subd. 8.Assessment. The commission or department may assess utilities subject to 
17.18 	this section in proportion to their respective gross operating revenue from sales of gas or 
17.19 	electric service within the state during the last calendar year to carry out the purposes of 
17.20 	subdivisions 1d, 1e, and 1f. Those assessments are not subject to the cap on assessments 
17.21 	provided by section 216B.62, or any other law.
17.22 		Subd. 9.Building performance standards; Sustainable Building 2030. (a) The 
17.23 	purpose of this subdivision is to establish cost-effective energy-efficiency performance 
17.24 	standards for new and substantially reconstructed commercial, industrial, and institutional 
17.25 	buildings that can significantly reduce carbon dioxide emissions by lowering energy use in 
17.26 	new and substantially reconstructed buildings. For the purposes of this subdivision, the 
17.27 	establishment of these standards may be referred to as Sustainable Building 2030.
17.28 	(b) The commissioner shall contract with the Center for Sustainable Building 
17.29 	Research at the University of Minnesota to coordinate development and implementation 
17.30 	of energy-efficiency performance standards, strategic planning, research, data analysis, 
17.31 	technology transfer, training, and other activities related to the purpose of Sustainable 
17.32 	Building 2030. The commissioner and the Center for Sustainable Building Research 
17.33 	shall, in consultation with utilities, builders, developers, building operators, and experts 
17.34 	in building design and technology, develop a Sustainable Building 2030 implementation 
17.35 	plan that must address, at a minimum, the following issues:
17.36 	(1) training architects to incorporate the performance standards in building design;
18.1 	(2) incorporating the performance standards in utility conservation improvement 
18.2 	programs; and
18.3 	(3) developing procedures for ongoing monitoring of energy use in buildings that 
18.4 	have adopted the performance standards.
18.5 	The plan must be submitted to the chairs and ranking minority members of the senate and 
18.6 	house of representatives committees with primary jurisdiction over energy policy by 
18.7 	July 1, 2009.
18.8 	(c) Sustainable Building 2030 energy-efficiency performance standards must be firm, 
18.9 	quantitative measures of total building energy use and associated carbon dioxide emissions 
18.10 	per square foot for different building types and uses, that allow for accurate determinations 
18.11 	of a building's conformance with a performance standard. Performance standards must 
18.12 	address energy use by electric vehicle charging infrastructure in or adjacent to buildings as 
18.13 	that infrastructure begins to be made widely available. The energy-efficiency performance 
18.14 	standards must be updated every three or five years to incorporate all cost-effective 
18.15 	measures. The performance standards must reflect the reductions in carbon dioxide 
18.16 	emissions per square foot resulting from actions taken by utilities to comply with the 
18.17 	renewable energy standards in section 216B.1691. The performance standards should be 
18.18 	designed to achieve reductions equivalent to the following reduction schedule, measured 
18.19 	against energy consumption by an average building in each applicable building sector in 
18.20 	2003: (1) 60 percent in 2010; (2) 70 percent in 2015; (3) 80 percent in 2020; and (4) 90 
18.21 	percent in 2025. A performance standard must not be established or increased absent a 
18.22 	conclusive engineering analysis that it is cost-effective based upon established practices 
18.23 	used in evaluating utility conservation improvement programs.
18.24 	(d) The annual amount of the contract with the Center for Sustainable Building 
18.25 	Research is up to $500,000. The Center for Sustainable Building Research shall expend 
18.26 	no more than $150,000 of this amount each year on administration, coordination, and 
18.27 	oversight activities related to Sustainable Building 2030. The balance of contract funds 
18.28 	must be spent on substantive programmatic activities allowed under this subdivision that 
18.29 	may be conducted by the Center for Sustainable Building Research and others, and for 
18.30 	subcontracts with not-for-profit energy organizations, architecture and engineering firms, 
18.31 	and other qualified entities to undertake technical projects and activities in support of 
18.32 	Sustainable Building 2030. The primary work to be accomplished each year by qualified 
18.33 	technical experts under subcontracts is the development and thorough justification of 
18.34 	recommendations for specific energy-efficiency performance standards. Additional work 
18.35 	may include:
19.1 	(1) research, development, and demonstration of new energy-efficiency technologies 
19.2 	and techniques suitable for commercial, industrial, and institutional buildings;
19.3 	(2) analysis and evaluation of practices in building design, construction, 
19.4 	commissioning and operations, and analysis and evaluation of energy use in the 
19.5 	commercial, industrial, and institutional sectors;
19.6 	(3) analysis and evaluation of the effectiveness and cost-effectiveness of Sustainable 
19.7 	Building 2030 performance standards, conservation improvement programs, and building 
19.8 	energy codes;
19.9 	(4) development and delivery of training programs for architects, engineers, 
19.10 	commissioning agents, technicians, contractors, equipment suppliers, developers, and 
19.11 	others in the building industries; and
19.12 	(5) analysis and evaluation of the effect of building operations on energy use. 
19.13 	(e) The commissioner shall require utilities to develop and implement conservation 
19.14 	improvement programs that are expressly designed to achieve energy efficiency goals 
19.15 	consistent with the Sustainable Building 2030 performance standards. These programs 
19.16 	must include offerings of design assistance and modeling, financial incentives, and the 
19.17 	verification of the proper installation of energy-efficient design components in new and 
19.18 	substantially reconstructed buildings. A utility's design assistance program must consider 
19.19 	the strategic planting of trees and shrubs around buildings as an energy conservation 
19.20 	strategy for the designed project. A utility making an expenditure under its conservation 
19.21 	improvement program that results in a building meeting the Sustainable Building 2030 
19.22 	performance standards may claim the energy savings toward its energy-savings goal 
19.23 	established in subdivision 1c.
19.24 	(f) The commissioner shall report to the legislature every three years, beginning 
19.25 	January 15, 2010, on the cost-effectiveness and progress of implementing the Sustainable 
19.26 	Building 2030 performance standards and shall make recommendations on the need to 
19.27 	continue the program as described in this section.

19.28 	ARTICLE 2
19.29 	RENEWABLE ENERGY

19.30 	Section 1. Minnesota Statutes 2008, section 216B.1691, as amended by Laws 2009, 
19.31 	chapter 110, section 13, is amended to read:
19.32 	216B.1691 RENEWABLE ENERGY OBJECTIVES.
19.33 		Subdivision 1.Definitions. (a) Unless otherwise specified in law, "eligible energy 
19.34 	technology" means an energy technology that:
20.1 	(1) generates electricity from the following renewable energy sources: (1) solar; 
20.2 	(2) wind; (3) hydroelectric with a capacity of less than 100 60 megawatts; (4) hydrogen, 
20.3 	provided that after January 1, 2010, the hydrogen must be generated from the resources 
20.4 	listed in this clause; or (5) biomass, which includes, without limitation, landfill gas; an 
20.5 	anaerobic digester system; the predominantly organic components of wastewater effluent, 
20.6 	sludge, or related byproducts from publicly owned treatment works, but not including 
20.7 	incineration of wastewater sludge to produce electricity; and an energy recovery facility 
20.8 	used to capture the heat value of mixed municipal solid waste or refuse-derived fuel from 
20.9 	mixed municipal solid waste as a primary fuel; and
20.10 	(2) was not mandated by Laws 1994, chapter 641, or by commission order issued 
20.11 	pursuant to that chapter prior to August 1, 2001.
20.12 	(b) "Electric utility" means a public utility providing electric service, a generation 
20.13 	and transmission cooperative electric association, or a municipal power agency, or a 
20.14 	power district.
20.15 	(c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year 
20.16 	by an electric utility to retail customers of the electric utility or to a distribution utility for 
20.17 	distribution to the retail customers of the distribution utility.
20.18 		Subd. 2.Eligible energy objectives. (a) Each electric utility shall make a good 
20.19 	faith effort to generate or procure sufficient electricity generated by an eligible energy 
20.20 	technology to provide its retail consumers, or the retail customers of a distribution utility 
20.21 	to which the electric utility provides wholesale electric service, so that:
20.22 	(1) commencing in 2005, at least one percent of the electric utility's total retail 
20.23 	electric sales to retail customers in Minnesota is generated by eligible energy technologies;
20.24 	(2) the amount provided under clause (1) is increased by one percent of the utility's 
20.25 	total retail electric sales each year until 2015; and seven
20.26 	(3) ten percent of the electric utility's total retail electric sales energy provided to 
20.27 	retail customers in Minnesota by 2010 is generated by eligible energy technologies.
20.28 	(b) Of the eligible energy technology generation required under paragraph (a), 
20.29 	clauses (1) and (2), not less than 0.5 percent of the energy must be generated by biomass 
20.30 	energy technologies, including an energy recovery facility used to capture the heat value 
20.31 	of mixed municipal solid waste or refuse-derived fuel from mixed municipal solid waste 
20.32 	as a primary fuel, by 2005. By 2010, one percent of the eligible technology generation 
20.33 	required under paragraph (a), clauses (1) and (2), must be generated by biomass energy 
20.34 	technologies. An energy recovery facility used to capture the heat value of mixed 
20.35 	municipal solid waste or refuse-derived fuel from mixed municipal solid waste, with a 
20.36 	power sales agreement in effect as of May 29, 2003, that terminates after December 31, 
21.1 	2010, does not qualify as an eligible energy technology unless the agreement provides for 
21.2 	rate adjustment in the event the facility qualifies as a renewable energy source.
21.3 		Subd. 2a.Eligible energy technology standard. (a) Except as provided in 
21.4 	paragraph (b), each electric utility shall generate or procure sufficient electricity generated 
21.5 	by an eligible energy technology to provide its retail customers in Minnesota, or the 
21.6 	retail customers of a distribution utility to which the electric utility provides wholesale 
21.7 	electric service, so that at least the following standard percentages of the electric utility's 
21.8 	total retail electric sales to retail customers in Minnesota are generated by eligible energy 
21.9 	technologies by the end of the year indicated:

21.10	(1)
	2012
	12 percent
	
21.11	(2)
	2016
	17 percent
	
21.12	(3)
	2020
	20 percent
	
21.13	(4)
	2025
	25 percent.
	
21.14 	(b) An electric utility that owned a nuclear generating facility as of January 1, 2007, 
21.15 	must meet the requirements of this paragraph rather than paragraph (a). An electric utility 
21.16 	subject to this paragraph must generate or procure sufficient electricity generated by 
21.17 	an eligible energy technology to provide its retail customers in Minnesota or the retail 
21.18 	customer of a distribution utility to which the electric utility provides wholesale electric 
21.19 	service so that at least the following percentages of the electric utility's total retail electric 
21.20 	sales to retail customers in Minnesota are generated by eligible energy technologies by the 
21.21 	end of the year indicated:

21.22	(1)
	2010
	15 percent
	
21.23	(2)
	2012
	18 percent
	
21.24	(3)
	2016
	25 percent
	
21.25	(4)
	2020
	30 percent.
	
21.26 	Of the 30 percent in 2020, at least 25 percent must be generated by solar energy 
21.27 	or wind energy conversion systems and the remaining five percent by other eligible 
21.28 	energy technology. Of the 25 percent that must be generated by wind or solar, no more 
21.29 	than one percent may be solar generated and the remaining 24 percent or greater must 
21.30 	be wind generated.
21.31 		Subd. 2b.Modification or delay of standard. (a) The commission shall modify or 
21.32 	delay the implementation of a standard obligation, in whole or in part, if the commission 
21.33 	determines it is in the public interest to do so. The commission, when requested to modify 
21.34 	or delay implementation of a standard, must consider:
21.35 	(1) the impact of implementing the standard on its customers' utility costs, including 
21.36 	the economic and competitive pressure on the utility's customers;
21.37 	(2) the effects of implementing the standard on the reliability of the electric system;
22.1 	(3) technical advances or technical concerns;
22.2 	(4) delays in acquiring sites or routes due to rejection or delays of necessary siting or 
22.3 	other permitting approvals;
22.4 	(5) delays, cancellations, or nondelivery of necessary equipment for construction or 
22.5 	commercial operation of an eligible energy technology facility;
22.6 	(6) transmission constraints preventing delivery of service; and
22.7 	(7) other statutory obligations imposed on the commission or a utility.
22.8 	The commission may modify or delay implementation of a standard obligation under 
22.9 	clauses (1) to (3) only if it finds implementation would cause significant rate impact, 
22.10 	requires significant measures to address reliability, or raises significant technical issues. 
22.11 	The commission may modify or delay implementation of a standard obligation under 
22.12 	clauses (4) to (6) only if it finds that the circumstances described in those clauses were due 
22.13 	to circumstances beyond an electric utility's control and make compliance not feasible.
22.14 	(b) When considering whether to delay or modify implementation of a standard 
22.15 	obligation, the commission must give due consideration to a preference for electric 
22.16 	generation through use of eligible energy technology and to the achievement of the 
22.17 	standards set by this section.
22.18 	(c) An electric utility requesting a modification or delay in the implementation of a 
22.19 	standard must file a plan to comply with its standard obligation in the same proceeding 
22.20 	that it is requesting the delay.
22.21 		Subd. 2c.Use of integrated resource planning process. The commission may 
22.22 	exercise its authority under subdivision 2b to modify or delay implementation of a standard 
22.23 	obligation as part of an integrated resource planning proceeding under section 216B.2422. 
22.24 	The commission's authority must be exercised according to subdivision 2b. The order to 
22.25 	delay or modify shall not be considered advisory with respect to any electric utility. This 
22.26 	subdivision is in addition to and does not limit the commission's authority to modify or 
22.27 	delay implementation of a standard obligation in other proceedings before the commission.
22.28 		Subd. 2d.Commission order. (a) The commission shall issue necessary orders an 
22.29 	order detailing the criteria and standards by which it will measure an electric utility's 
22.30 	efforts to meet the renewable energy objectives of subdivision 2 this section to determine 
22.31 	whether the utility is making the required good faith effort. In this order, the commission 
22.32 	shall include criteria and standards that protect against undesirable impacts on the 
22.33 	reliability of the utility's system and economic impacts on the utility's ratepayers and 
22.34 	that consider technical feasibility.
22.35 	(b) In its order under paragraph (a), the commission shall provide for a weighted 
22.36 	scale of how energy produced by various eligible energy technologies must count toward a 
23.1 	utility's objective. In establishing this scale, the commission shall consider the attributes 
23.2 	of various technologies and fuels, and shall establish a system that grants multiple credits 
23.3 	toward the objectives for those technologies and fuels the commission determines is in 
23.4 	the public interest to encourage.
23.5 		Subd. 3.Utility plans filed with commission. (a) Each electric utility shall report 
23.6 	on its plans, activities, and progress with regard to the these objectives and standards 
23.7 	of this section in its filings under section 216B.2422 or in a separate report submitted 
23.8 	to the commission every two years, whichever is more frequent, demonstrating to the 
23.9 	commission that the utility's utility is making the required good faith effort to comply with 
23.10 	this section. In its resource plan or a separate report, each electric utility shall provide a 
23.11 	description of:
23.12 	(1) the status of the utility's renewable energy mix relative to the good faith objective 
23.13 	and standards;
23.14 	(2) efforts taken to meet the objective and standards;
23.15 	(3) any obstacles encountered or anticipated in meeting the objective or standards; 
23.16 	and
23.17 	(4) potential solutions to the obstacles.
23.18 	(b) The commissioner shall compile the information provided to the commission 
23.19 	under paragraph (a), and report to the chairs of the house of representatives and senate 
23.20 	committees with jurisdiction over energy and environment policy issues as to the 
23.21 	progress of utilities in the state, including the progress of each individual electric utility,
23.22 	in increasing the amount of renewable energy provided to retail customers, with any 
23.23 	recommendations for regulatory or legislative action, by January 15 of each odd-numbered 
23.24 	year.
23.25 		Subd. 4.Renewable energy credits. (a) To facilitate compliance with this section, 
23.26 	the commission, by rule or order, shall may establish by January 1, 2008, a program 
23.27 	for tradable renewable energy credits for electricity generated by an eligible energy 
23.28 	technology. The credits must represent energy produced by an eligible energy technology, 
23.29 	as defined in subdivision 1. Each kilowatt-hour of renewable energy credits must be 
23.30 	treated the same as a kilowatt-hour of eligible energy technology generated or procured 
23.31 	by an electric utility if it is produced by an eligible energy technology. The program 
23.32 	must permit a credit to be used only once. The program must treat all eligible energy 
23.33 	technology equally and shall not give more or less credit to energy based on the state 
23.34 	where the energy was generated or the technology with which the energy was generated. 
23.35 	The commission must determine the period in which the credits may be used for purposes 
23.36 	of the program. In doing so, the commission shall implement a system that constrains or 
24.1 	limits the cost of credits, taking care to ensure that such a system does not undermine the 
24.2 	market for those credits.
24.3 	(b) In lieu of generating or procuring energy directly to satisfy the eligible renewable
24.4 	energy technology objective or standard of this section, an electric utility may utilize 
24.5 	renewable energy credits allowed under the program to satisfy the objective or standard
24.6 	purchase sufficient renewable energy credits, issued pursuant to this subdivision, to 
24.7 	meet its objective.
24.8 	(c) Upon the passage of a renewable energy standard, portfolio, or objective in 
24.9 	a bordering state that includes a similar definition of eligible energy technology or 
24.10 	renewable energy, the commission shall may facilitate the trading of renewable energy 
24.11 	credits between states.
24.12 	(d) The commission shall require all electric utilities to participate in a 
24.13 	commission-approved credit-tracking system or systems. Once a credit-tracking system is 
24.14 	in operation, the commission shall issue an order establishing protocols for trading credits.
24.15 	(e) An electric utility subject to subdivision 2a, paragraph (b), may not sell renewable 
24.16 	energy credits to an electric utility subject to subdivision 2a, paragraph (a), until 2021.
24.17 		Subd. 5.Technology based on fuel combustion. (a) Electricity produced by fuel 
24.18 	combustion through fuel blending or co-firing under paragraph (b) may only count toward 
24.19 	a utility's objectives or standards if the generation facility:
24.20 	(1) was constructed in compliance with new source performance standards 
24.21 	promulgated under the federal Clean Air Act for a generation facility of that type; or
24.22 	(2) employs the maximum achievable or best available control technology available 
24.23 	for a generation facility of that type.
24.24 	(b) An eligible energy technology may blend or co-fire a fuel listed in subdivision 
24.25 	1, paragraph (a), clause (5) (1), with other fuels in the generation facility, but only the 
24.26 	percentage of electricity that is attributable to a fuel listed in that clause can be counted 
24.27 	toward an electric utility's renewable energy objectives.
24.28 		Subd. 7.Compliance. The commission must regularly investigate whether an 
24.29 	electric utility is in compliance with its good faith objective under subdivision 2 and 
24.30 	standard obligation under subdivision 2a. If the commission finds noncompliance, it may 
24.31 	order the electric utility to construct facilities, purchase energy generated by eligible 
24.32 	energy technology, purchase renewable energy credits, or engage in other activities 
24.33 	to achieve compliance. If an electric utility fails to comply with an order under this 
24.34 	subdivision, the commission may impose a financial penalty on the electric utility in an 
24.35 	amount not to exceed the estimated cost of the electric utility to achieve compliance. The 
24.36 	penalty may not exceed the lesser of the cost of constructing facilities or purchasing 
25.1 	credits. The commission must deposit financial penalties imposed under this subdivision 
25.2 	in the energy and conservation account established in the special revenue fund under 
25.3 	section 216B.241, subdivision 2a. This subdivision is in addition to and does not limit any 
25.4 	other authority of the commission to enforce this section.
25.5 		Subd. 8.Relation to other law. This section does not limit the authority of the 
25.6 	commission under any other law, including, without limitation, sections 216B.2422 and 
25.7 	216B.243.
25.8 		Subd. 9.Local benefits. The commission shall take all reasonable actions within 
25.9 	its statutory authority to ensure this section is implemented to maximize benefits to 
25.10 	Minnesota citizens, balancing factors such as local ownership of or participation in 
25.11 	energy production, development and ownership of eligible energy technology facilities by 
25.12 	independent power producers, Minnesota utility ownership of eligible energy technology 
25.13 	facilities, the costs of energy generation to satisfy the renewable standard, and the 
25.14 	reliability of electric service to Minnesotans.
25.15 		Subd. 10.Utility acquisition of resources. A competitive resource acquisition 
25.16 	process established by the commission prior to June 1, 2007, shall not apply to a utility 
25.17 	for the construction, ownership, and operation of generation facilities used to satisfy the 
25.18 	requirements of this section unless, upon a finding that it is in the public interest, the 
25.19 	commission issues an order on or after June 1, 2007, that requires compliance by a utility 
25.20 	with a competitive resource acquisition process. A utility that owns a nuclear generation 
25.21 	facility and intends to construct, own, or operate facilities under this section shall file with 
25.22 	the commission on or before March 1, 2008, a renewable energy plan setting forth the 
25.23 	manner in which the utility proposes to meet the requirements of this section, including 
25.24 	a proposed schedule for purchasing renewable energy from C-BED and non-C-BED 
25.25 	projects. The utility shall update the plan as necessary in its filing under section 
25.26 	216B.2422. The commission shall approve the plan unless it determines, after public 
25.27 	hearing and comment, that the plan is not in the public interest. As part of its determination 
25.28 	of public interest, the commission shall consider the plan's allocation of projects among 
25.29 	C-BED, non-C-BED, and utility-owned projects, balancing the state's interest in:
25.30 	(1) promoting the policy of economic development in rural areas through the 
25.31 	development of renewable energy projects, as expressed in subdivision 9;
25.32 	(2) maintaining the reliability of the state's electric power grid; and
25.33 	(3) minimizing cost impacts on ratepayers.

25.34 	Sec. 2. Minnesota Statutes 2008, section 297A.68, is amended by adding a subdivision 
25.35 	to read:
26.1 		Subd. 42.Renewable energy. An eligible technology, as defined in section 
26.2 	216B.1691, subdivision 1, having a capacity no greater than 25 megawatts is exempt, and 
26.3 	the materials used to manufacture, install, construct, repair, or replace it are exempt.

26.4 	ARTICLE 3
26.5 	NUCLEAR POWER

26.6 	Section 1. Minnesota Statutes 2008, section 216B.243, subdivision 3b, is amended to 
26.7 	read:
26.8 		Subd. 3b.Nuclear power plant; new construction prohibited; relicensing.
 26.9 	(a) The commission may not issue a certificate of need for the construction of a new 
26.10 	nuclear-powered electric generating plant.
26.11 	(b) Any certificate of need for additional storage of spent nuclear fuel for a facility 
26.12 	seeking a license extension shall address the impacts of continued operations over the 
26.13 	period for which approval is sought.

26.14 	ARTICLE 4
26.15 	REPEALERS

26.16 	Section 1.  REPEALER.
 26.17 	(a) Minnesota Statutes 2008, sections 216B.1612, subdivisions 1, 3, 4, 5, 6, 7, 8, and 
26.18 	9; 216B.1681; 216B.1691, subdivision 7; 216B.2401; 216B.2412, subdivisions 1 and 3; 
26.19 	216C.03; 216C.05, subdivision 2; 216H.01; 216H.02; 216H.03; and 216H.06, are repealed.
26.20 	(b) Minnesota Statutes 2009 Supplement, sections 216B.1612, subdivision 2; and 
26.21 	216B.2412, subdivision 2, are repealed.