1.1 	A bill for an act
1.2 	relating to energy; modifying provisions related to utility report filings, 
1.3 	weatherization programs, and public utility commission assessments; removing 
1.4 	obsolete and redundant language; providing for certain reporting requirements; 
1.5 	requiring utility rates be based primarily on cost of service between and among 
1.6 	consumer classes; making clarifying and technical changes; authorizing the 
1.7 	Public Utilities Commission to approve a multiyear rate plan for certain utilities; 
1.8 	providing for cost recovery for certain pollution control products; requiring 
1.9 	certain rate impact information related to compliance with renewable energy 
1.10 	standard; modifying conservation improvement program; modifying provision 
1.11 	relating to transmission projects reports; regulating charitable contributions and 
1.12 	securities issuance by utilities; relieving Energy Conservation Information Center 
1.13 	from certain data-gathering responsibilities;amending Minnesota Statutes 2010, 
1.14 	sections 16E.15, subdivision 2; 216B.03; 216B.07; 216B.16, subdivisions 7, 9, 
1.15 	15, by adding subdivisions; 216B.1691, by adding a subdivision; 216B.2401; 
1.16 	216B.241, subdivisions 1c, 2; 216B.2425, subdivision 2; 216B.49, subdivision 
1.17 	3; 216C.11; 216C.264; 216E.18, subdivision 3; repealing Minnesota Statutes 
1.18 	2010, section 216B.242.
1.19 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.20 	Section 1. Minnesota Statutes 2010, section 16E.15, subdivision 2, is amended to read:
1.21 		Subd. 2.Software sale fund. (a) Except as provided in paragraphs paragraph (b) 
1.22 	and (c), proceeds of the sale or licensing of software products or services by the chief 
1.23 	information officer must be credited to the enterprise technology revolving fund. If a state 
1.24 	agency other than the Office of Enterprise Technology has contributed to the development 
1.25 	of software sold or licensed under this section, the chief information officer may reimburse 
1.26 	the agency by discounting computer services provided to that agency.
1.27 	(b) Proceeds of the sale or licensing of software products or services developed by 
1.28 	the Pollution Control Agency, or custom developed by a vendor for the agency, must be 
1.29 	credited to the environmental fund.
2.1 	(c) Proceeds of the sale or licensing of software products or services developed by 
2.2 	the Department of Education, or custom developed by a vendor for the agency, to support 
2.3 	the achieved savings assessment program, must be appropriated to the commissioner of 
2.4 	education and credited to the weatherization program to support weatherization activities.

2.5 	Sec. 2. Minnesota Statutes 2010, section 216B.03, is amended to read:
2.6 	216B.03 REASONABLE RATE.
2.7 	Every rate made, demanded, or received by any public utility, or by any two or 
2.8 	more public utilities jointly, shall be just and reasonable. Rates shall not be unreasonably 
2.9 	preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable, 
2.10 	and consistent in application to a class of consumers and among classes of consumers. 
2.11 	To the maximum reasonable extent, the commission shall set rates to encourage energy 
2.12 	conservation and renewable energy use and to further the goals of sections 216B.164, 
2.13 	216B.241, and 216C.05. Any doubt as to reasonableness should be resolved in favor of the 
2.14 	consumer. For rate-making purposes a public utility may treat two or more municipalities 
2.15 	served by it as a single class wherever the populations are comparable in size or the 
2.16 	conditions of service are similar.

2.17 	Sec. 3. Minnesota Statutes 2010, section 216B.07, is amended to read:
2.18 	216B.07 RATE PREFERENCE PROHIBITED.
2.19 	No public utility shall, as to rates or service, make or grant any unreasonable 
2.20 	preference or advantage to any person or class of consumers or subject any person or class 
2.21 	of consumers to any unreasonable prejudice or disadvantage.

2.22 	Sec. 4. Minnesota Statutes 2010, section 216B.16, is amended by adding a subdivision 
2.23 	to read:
2.24 		Subd. 6e.Revenue allocation among consumer classes. Cost of service shall 
2.25 	be the primary consideration in the commission's determination of revenue allocation 
2.26 	among consumer classes. Factors other than cost of service, including impact on business 
2.27 	development and job growth, may also be considered and evaluated by the commission in 
2.28 	determining revenue allocations. Factors used in determining revenue allocation must 
2.29 	be supported by record evidence.

2.30 	EFFECTIVE DATE. This section is effective the day following final enactment 
2.31 	and applies to filings for rate changes filed on and after that date.

3.1 	Sec. 5. Minnesota Statutes 2010, section 216B.16, subdivision 7, is amended to read:
3.2 		Subd. 7.Energy and emission control products cost adjustment. Notwithstanding 
3.3 	any other provision of this chapter, the commission may permit a public utility to file 
3.4 	rate schedules containing provisions for the automatic adjustment of charges for public 
3.5 	utility service in direct relation to changes in:
3.6 	(1) federally regulated wholesale rates for energy delivered through interstate 
3.7 	facilities;
3.8 	(2) direct costs for natural gas delivered; or
3.9 	(3) costs for fuel used in generation of electricity or the manufacture of gas; or
3.10 	(4) prudent costs incurred by a public utility for sorbents, reagents, or chemicals 
3.11 	used to control emissions from an electric generation facility, provided that these costs are 
3.12 	not recovered elsewhere in rates. The utility must track and report annually the volumes 
3.13 	and costs of sorbents, reagents, or chemicals using separate accounts by generating plant.

3.14 	Sec. 6. Minnesota Statutes 2010, section 216B.16, subdivision 9, is amended to read:
3.15 		Subd. 9.Charitable contribution. The commission shall allow as operating 
3.16 	expenses only those charitable contributions whichthat the commission deems prudent and 
3.17 	whichthat qualify under section 290.21, subdivision 3, clause (b) 300.66, subdivision 3. 
3.18 	Only 50 percent of the qualified contributions shall beare allowed as operating expenses.

3.19 	Sec. 7. Minnesota Statutes 2010, section 216B.16, subdivision 15, is amended to read:
3.20 		Subd. 15.Low-income affordability programs. (a) The commission must 
3.21 	consider ability to pay as a factor in setting utility rates and may establish affordability 
3.22 	programs for low-income residential ratepayers in order to ensure affordable, reliable, 
3.23 	and continuous service to low-income utility customers. Affordability programs may 
3.24 	include inverted block rates in which lower energy prices are made available to lower 
3.25 	usage customers. By September 1, 2007, A public utility serving low-income residential 
3.26 	ratepayers who use natural gas for heating must file an affordability program with the 
3.27 	commission. For purposes of this subdivision, "low-income residential ratepayers" means 
3.28 	ratepayers who receive energy assistance from the low-income home energy assistance 
3.29 	program (LIHEAP).
3.30 	(b) Any affordability program the commission orders a utility to implement must:
3.31 	(1) lower the percentage of income that participating low-income households devote 
3.32 	to energy bills;
3.33 	(2) increase participating customer payments over time by increasing the frequency 
3.34 	of payments;
4.1 	(3) decrease or eliminate participating customer arrears;
4.2 	(4) lower the utility costs associated with customer account collection activities; and
4.3 	(5) coordinate the program with other available low-income bill payment assistance 
4.4 	and conservation resources.
4.5 	(c) In ordering affordability programs, the commission may require public utilities to 
4.6 	file program evaluations that measure the effect of the affordability program on:
4.7 	(1) the percentage of income that participating households devote to energy bills;
4.8 	(2) service disconnections; and
4.9 	(3) frequency of customer payments, utility collection costs, arrearages, and bad 
4.10 	debt.
4.11 	(d) The commission must issue orders necessary to implement, administer, and 
4.12 	evaluate affordability programs, and to allow a utility to recover program costs, including 
4.13 	administrative costs, on a timely basis. The commission may not allow a utility to recover 
4.14 	administrative costs, excluding start-up costs, in excess of five percent of total program 
4.15 	costs, or program evaluation costs in excess of two percent of total program costs. The 
4.16 	commission must permit deferred accounting, with carrying costs, for recovery of program 
4.17 	costs incurred during the period between general rate cases.
4.18 	(e) Public utilities may use information collected or created for the purpose of 
4.19 	administering energy assistance to administer affordability programs.

4.20 	Sec. 8. Minnesota Statutes 2010, section 216B.16, is amended by adding a subdivision 
4.21 	to read:
4.22 		Subd. 19.Multiyear rate plan. (a) A public utility may propose, and the 
4.23 	commission may approve, approve as modified, or reject, a multiyear rate plan as provided 
4.24 	in this subdivision. The term "multiyear rate plan" refers to a plan establishing the rates the 
4.25 	utility may charge for each year of the specified period of years to be covered by the plan. 
4.26 	The commission may approve a multiyear rate plan only if it finds that the plan establishes 
4.27 	just and reasonable rates for the utility, applying the factors described in subdivision 6.
4.28 	(b) Rates charged under a multiyear rate plan must be based only upon the utility's 
4.29 	reasonable and prudent costs of service over the term of the plan, as determined by the 
4.30 	commission, provided that the costs are not being recovered elsewhere in rates. Rate 
4.31 	adjustments authorized under subdivisions 6b and 7 may continue outside of a plan 
4.32 	authorized under this subdivision.
4.33 	(c) The commission may, by order, establish terms, conditions, and procedures 
4.34 	necessary to implement this subdivision, including a mechanism to periodically examine 
4.35 	a multiyear rate plan to ensure rates charged under the plan remain just and reasonable. 
5.1 	In reviewing a multiyear rate plan proposed in a general rate case under this section, 
5.2 	the commission may extend the time requirements for issuance of a final determination 
5.3 	prescribed in this section by an additional 90 days beyond its existing authority under 
5.4 	subdivision 2, paragraph (f).

5.5 	Sec. 9. Minnesota Statutes 2010, section 216B.1691, is amended by adding a 
5.6 	subdivision to read:
5.7 		Subd. 2e.Rate impact of standard compliance; report. Each electric utility must 
5.8 	submit to the commission and the legislative committees with primary jurisdiction over 
5.9 	energy policy a report containing an estimation of the rate impact of activities of the 
5.10 	electric utility necessary to comply with section 216B.1691. The rate impact estimate 
5.11 	must be for wholesale rates and, if the electric utility makes retail sales, the estimate 
5.12 	shall also be for the impact on the electric utility's retail rates. Those activities include, 
5.13 	without limitation, energy purchases, generation facility acquisition and construction, 
5.14 	and transmission improvements. An initial report must be submitted within 150 days of 
5.15 	the effective date of this section. After the initial report, a report must be updated and 
5.16 	submitted as part of each integrated resource plan or plan modification filed by the electric 
5.17 	utility under section 216B.2422. The reporting obligation of an electric utility under 
5.18 	this subdivision expires December 31, 2025, for an electric utility subject to subdivision 
5.19 	2a, paragraph (a), and December 31, 2020, for an electric utility subject to subdivision 
5.20 	2a, paragraph (b).

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

5.22 	Sec. 10. Minnesota Statutes 2010, section 216B.2401, is amended to read:
5.23 	216B.2401 ENERGY CONSERVATION POLICY GOAL.
5.24 	It is the energy policy of the state of Minnesota to achieve annual energy savings 
5.25 	equal to 1.5 percent of annual retail energy sales of electricity and natural gas directly 
5.26 	through energy conservation improvement programs and rate design, such as inverted 
5.27 	block rates in which lower energy prices are made available to lower-usage residential 
5.28 	customers, and indirectly through energy codes and appliance standards, programs 
5.29 	designed to transform the market or change consumer behavior, energy savings resulting 
5.30 	from efficiency improvements to the utility infrastructure and system, and other efforts to 
5.31 	promote energy efficiency and energy conservation.

6.1 	Sec. 11. Minnesota Statutes 2010, section 216B.241, subdivision 1c, is amended to 
6.2 	read:
6.3 		Subd. 1c.Energy-saving goals. (a) The commissioner shall establish energy-saving 
6.4 	goals for energy conservation improvement expenditures and shall evaluate an energy 
6.5 	conservation improvement program on how well it meets the goals set.
6.6 	(b) Each individual utility and association shall have an annual energy-savings 
6.7 	goal equivalent to 1.5 percent of gross annual retail energy sales unless modified by the 
6.8 	commissioner under paragraph (d). The savings goals must be calculated based on the 
6.9 	most recent three-year weather normalized average. A utility or association may elect to 
6.10 	carry forward energy savings in excess of 1.5 percent for a year to the succeeding three 
6.11 	calendar years, except that savings from electric utility infrastructure projects allowed 
6.12 	under paragraph (d) may be carried forward for five years. A particular energy savings can 
6.13 	be used only for one year's goal.
6.14 	(c) The commissioner must adopt a filing schedule that is designed to have all 
6.15 	utilities and associations operating under an energy-savings plan by calendar year 2010.
6.16 	(d) In its energy conservation improvement plan filing, a utility or association may 
6.17 	request the commissioner to adjust its annual energy-savings percentage goal based on 
6.18 	its historical conservation investment experience, customer class makeup, load growth, a 
6.19 	conservation potential study, or other factors the commissioner determines warrants an 
6.20 	adjustment. The commissioner may not approve a plan of a public utility that provides for 
6.21 	an annual energy-savings goal of less than one percent of gross annual retail energy sales 
6.22 	from energy conservation improvements.
6.23 	A utility or association may include in its energy conservation plan energy savings 
6.24 	from electric utility infrastructure projects approved by the commission under section 
6.25 	216B.1636 or waste heat recovery converted into electricity projects that may count as 
6.26 	energy savings in addition to the a minimum energy-savings goal of at least one percent 
6.27 	for energy conservation improvements. Electric utility infrastructure projects must result 
6.28 	in increased energy efficiency greater than that which would have occurred through 
6.29 	normal maintenance activity.
6.30 	(e) An energy-savings goal is not satisfied by attaining the revenue expenditure 
6.31 	requirements of subdivisions 1a and 1b, but can only be satisfied by meeting the 
6.32 	energy-savings goal established in this subdivision.
6.33 	(f) An association or utility is not required to make energy conservation investments 
6.34 	to attain the energy-savings goals of this subdivision that are not cost-effective even 
6.35 	if the investment is necessary to attain the energy-savings goals. For the purpose of 
6.36 	this paragraph, in determining cost-effectiveness, the commissioner shall consider the 
7.1 	costs and benefits to ratepayers, the utility, participants, and society. In addition, the 
7.2 	commissioner shall consider the rate at which an association or municipal utility is 
7.3 	increasing its energy savings and its expenditures on energy conservation.
7.4 	(g) On an annual basis, the commissioner shall produce and make publicly available 
7.5 	a report on the annual energy savings and estimated carbon dioxide reductions achieved 
7.6 	by the energy conservation improvement programs for the two most recent years for 
7.7 	which data is available. The commissioner shall report on program performance both in 
7.8 	the aggregate and for each entity filing an energy conservation improvement plan for 
7.9 	approval or review by the commissioner.
7.10 	(h) By January 15, 2010, the commissioner shall report to the legislature whether 
7.11 	the spending requirements under subdivisions 1a and 1b are necessary to achieve the 
7.12 	energy-savings goals established in this subdivision.

7.13 	EFFECTIVE DATE. This section is effective the day following final enactment 
7.14 	and applies to energy savings plans for calendar year 2012 and thereafter.

7.15 	Sec. 12. Minnesota Statutes 2010, section 216B.241, subdivision 2, is amended to read:
7.16 		Subd. 2.Programs. (a) The commissioner may require public utilities to make 
7.17 	investments and expenditures in energy conservation improvements, explicitly setting 
7.18 	forth the interest rates, prices, and terms under which the improvements must be offered to 
7.19 	the customers. The required programs must cover no more than a three-year period. Public 
7.20 	utilities shall file conservation improvement plans by June 1, on a schedule determined by 
7.21 	order of the commissioner, but at least every three years. Plans received by a public utility 
7.22 	by June 1 must be approved or approved as modified by the commissioner by December 
7.23 	1 of that same year. The commissioner shall evaluate the program on the basis of 
7.24 	cost-effectiveness and the reliability of technologies employed. The commissioner's order 
7.25 	must provide to the extent practicable for a free choice, by consumers participating in the 
7.26 	program, of the device, method, material, or project constituting the energy conservation 
7.27 	improvement and for a free choice of the seller, installer, or contractor of the energy 
7.28 	conservation improvement, provided that the device, method, material, or project seller, 
7.29 	installer, or contractor is duly licensed, certified, approved, or qualified, including under 
7.30 	the residential conservation services program, where applicable.
7.31 	(b) The commissioner may require a utility to make an energy conservation 
7.32 	improvement investment or expenditure whenever the commissioner finds that the 
7.33 	improvement will result in energy savings at a total cost to the utility less than the cost 
7.34 	to the utility to produce or purchase an equivalent amount of new supply of energy. The 
8.1 	commissioner shall nevertheless ensure that every public utility operate one or more 
8.2 	programs under periodic review by the department.
8.3 	(c) Each public utility subject to subdivision 1a may spend and invest annually up to 
8.4 	ten percent of the total amount required to be spent and invested on energy conservation 
8.5 	improvements under this section by the utility on research and development projects 
8.6 	that meet the definition of energy conservation improvement in subdivision 1 and that 
8.7 	are funded directly by the public utility.
8.8 	(d) A public utility may not spend for or invest in energy conservation improvements 
8.9 	that directly benefit a large energy facility or a large electric customer facility for which 
8.10 	the commissioner has issued an exemption pursuant to subdivision 1a, paragraph (b). 
8.11 	The commissioner shall consider and may require a utility to undertake a program 
8.12 	suggested by an outside source, including a political subdivision, a nonprofit corporation, 
8.13 	or community organization.
8.14 	(e) A utility, a political subdivision, or a nonprofit or community organization 
8.15 	that has suggested a program, the attorney general acting on behalf of consumers and 
8.16 	small business interests, or a utility customer that has suggested a program and is not 
8.17 	represented by the attorney general under section 8.33 may petition the commission to 
8.18 	modify or revoke a department decision under this section, and the commission may do 
8.19 	so if it determines that the program is not cost-effective, does not adequately address the 
8.20 	residential conservation improvement needs of low-income persons, has a long-range 
8.21 	negative effect on one or more classes of customers, or is otherwise not in the public 
8.22 	interest. The commission shall reject a petition that, on its face, fails to make a reasonable 
8.23 	argument that a program is not in the public interest.
8.24 	(f) The commissioner may order a public utility to include, with the filing of the 
8.25 	utility's proposed conservation improvement plan under paragraph (a) annual status 
8.26 	report, the results of an independent audit of all or a selection of the utility's conservation 
8.27 	improvement programs and expenditures performed by the department or an auditor 
8.28 	with experience in the provision of energy conservation and energy efficiency services 
8.29 	approved by the commissioner and chosen by the utility. The audit must specify the 
8.30 	energy savings or increased efficiency in the use of energy within the service territory of 
8.31 	the utility that is the result of the spending and investments. The audit must evaluate the 
8.32 	cost-effectiveness of the utility's conservation programs.

8.33 	Sec. 13. Minnesota Statutes 2010, section 216B.2425, subdivision 2, is amended to 
8.34 	read:
9.1 		Subd. 2.List development; transmission projects report. (a) By November 
9.2 	1 of each odd-numbered year, a transmission projects report must be submitted to the 
9.3 	commission by each utility, organization, or company that:
9.4 	(1) is a public utility, a municipal utility, a cooperative electric association, the 
9.5 	generation and transmission organization that serves each utility or association, or a 
9.6 	transmission company; and
9.7 	(2) owns or operates electric transmission lines in Minnesota, except a company or 
9.8 	organization that owns a transmission line that serves a single customer or interconnects a 
9.9 	single generating facility.
9.10 	(b) The report may be submitted jointly or individually to the commission.
9.11 	(c) The report must:
9.12 	(1) list specific present and reasonably foreseeable future inadequacies in the 
9.13 	transmission system in Minnesota;
9.14 	(2) identify alternative means of addressing each inadequacy listed;
9.15 	(3) identify general economic, environmental, and social issues associated with 
9.16 	each alternative; and
9.17 	(4) provide a summary of public input related to the list of inadequacies and the role 
9.18 	of local government officials and other interested persons in assisting to develop the list 
9.19 	and analyze alternatives.
9.20 	(d) To meet the requirements of this subdivision, reporting parties may rely on 
9.21 	available information and analysis developed by a regional transmission organization 
9.22 	or any subgroup of a regional transmission organization and may develop and include 
9.23 	additional information as necessary.

9.24 	Sec. 14. Minnesota Statutes 2010, section 216B.49, subdivision 3, is amended to read:
9.25 		Subd. 3.Commission approval required. It shall beis unlawful for any public 
9.26 	utility organized under the laws of this state to offer or sell any security or, if organized 
9.27 	under the laws of any other state or foreign country, to subject property in this state to 
9.28 	an encumbrance for the purpose of securing the payment of any indebtedness unless the 
9.29 	security issuance of the public utility shallis first be approved by the commission, either 
9.30 	as an individual issuance or as one of multiple possible issuances approved in the course 
9.31 	of a periodic proceeding reviewing the utility's proposed sources and uses of capital funds. 
9.32 	Approval by the commission shallmust be by formal written order.

9.33 	Sec. 15. Minnesota Statutes 2010, section 216C.11, is amended to read:
9.34 	216C.11 ENERGY CONSERVATION INFORMATION CENTER.
10.1 	The commissioner shall establish an Energy Information Center in the department's 
10.2 	offices in St. Paul. The information center shall maintain a toll-free telephone information 
10.3 	service and disseminate printed materials on energy conservation topics, including but 
10.4 	not limited to, availability of loans and other public and private financing methods 
10.5 	for energy conservation physical improvements, the techniques and materials used to 
10.6 	conserve energy in buildings, including retrofitting or upgrading insulation and installing 
10.7 	weatherstripping, the projected prices and availability of different sources of energy, 
10.8 	and alternative sources of energy.
10.9 	The Energy Information Center shall serve as the official Minnesota Alcohol Fuels 
10.10 	Information Center and shall disseminate information, printed, by the toll-free telephone 
10.11 	information service, or otherwise on the applicability and technology of alcohol fuels.
10.12 	The information center shall include information on the potential hazards of energy 
10.13 	conservation techniques and improvements in the printed materials disseminated. The 
10.14 	commissioner shall not be liable for damages arising from the installation or operation of 
10.15 	equipment or materials recommended by the information center.
10.16 	The information center shall use the information collected under section 216C.02, 
10.17 	subdivision 1, to maintain a central source of information on conservation and other 
10.18 	energy-related programs, including both programs required by law or rule and programs 
10.19 	developed and carried on voluntarily. In particular, the information center shall compile 
10.20 	and maintain information on policies covering disconnections or denials of fuel during 
10.21 	cold weather adopted by public utilities and other fuel suppliers not governed by section 
10.22 	216B.096 or 216B.097, including the number of households disconnected or denied fuel 
10.23 	and the duration of the disconnections or denials.

10.24 	Sec. 16. Minnesota Statutes 2010, section 216C.264, is amended to read:
10.25 	216C.264 COORDINATING RESIDENTIAL WEATHERIZATION 
10.26 	PROGRAMS.
10.27 		Subdivision 1.Agency designation. The department is the state agency to apply 
10.28 	for, receive, and disburse money made available to the state by federal law for the purpose 
10.29 	of weatherizing the residences of low-income persons. The commissioner must coordinate 
10.30 	available federal money with state money appropriated for this purpose.
10.31 		Subd. 2.Grants. The commissioner must make grants of federal and state money 
10.32 	to community action agencies and other public or private nonprofit agencies for the 
10.33 	purpose of weatherizing the residences of low-income persons. Grant applications must 
10.34 	be submitted in accordance with rules promulgated by the commissioner.
11.1 		Subd. 3.Benefits of weatherization. In the case of any grant made to an owner of a 
11.2 	rental dwelling unit for weatherization, the commissioner must require that (1) the benefits 
11.3 	of weatherization assistance in connection with the dwelling unit accrue primarily to the 
11.4 	low-income family that resides in the unit; (2) the rents on the dwelling unit will not be 
11.5 	raised because of any increase in value due solely to the weatherization assistance; and (3) 
11.6 	no undue or excessive enhancement will occur to the value of the dwelling unit.
11.7 		Subd. 4.Rules. The commissioner must promulgate rules that describe procedures 
11.8 	for the administration of grants, data to be reported by grant recipients, and compliance 
11.9 	with relevant federal regulations. The commissioner must require that a rental unit 
11.10 	weatherized under this section be rented to a household meeting the income limits of 
11.11 	the program for 24 of the 36 months after weatherization is complete. In applying this 
11.12 	restriction to multiunit buildings weatherized under this section, the commissioner must 
11.13 	require that occupancy continue to reflect the proportion of eligible households in the 
11.14 	building at the time of weatherization.
11.15 		Subd. 5.Grant allocation. The commissioner must distribute supplementary 
11.16 	state grants in a manner consistent with the goal of producing the maximum number of 
11.17 	weatherized units. Supplementary state grants are provided primarily for the payment of 
11.18 	additional labor costs for the federal weatherization program, and as an incentive for the 
11.19 	increased production of weatherized units.
11.20 	Criteria for the allocation of state grants to local agencies include existing local 
11.21 	agency production levels, emergency needs, and the potential for maintaining or increasing 
11.22 	acceptable levels of production in the area.
11.23 	An eligible local agency may receive advance funding for 90 days' production, but 
11.24 	thereafter must receive grants solely on the basis of program criteria.
11.25 		Subd. 6.Eligibility criteria. To the extent allowed by federal regulations, the 
11.26 	commissioner must ensure that the same income eligibility criteria apply to both the 
11.27 	weatherization program and the energy assistance program.

11.28 	Sec. 17. Minnesota Statutes 2010, section 216E.18, subdivision 3, is amended to read:
11.29 		Subd. 3.Funding; assessment. The commission shall finance its baseline studies, 
11.30 	general environmental studies, development of criteria, inventory preparation, monitoring 
11.31 	of conditions placed on site and route permits, and all other work, other than specific site 
11.32 	and route designation, from an assessment made quarterly, at least 30 days before the start 
11.33 	of each quarter, by the commission against all utilities with annual retail kilowatt-hour 
11.34 	sales greater than 4,000,000 kilowatt-hours in the previous calendar year.
12.1 	Each share shall be determined as follows: (1) the ratio that the annual retail 
12.2 	kilowatt-hour sales in the state of each utility bears to the annual total retail kilowatt-hour 
12.3 	sales in the state of all these utilities, multiplied by 0.667, plus (2) the ratio that the annual 
12.4 	gross revenue from retail kilowatt-hour sales in the state of each utility bears to the annual 
12.5 	total gross revenues from retail kilowatt-hour sales in the state of all these utilities, 
12.6 	multiplied by 0.333, as determined by the commission. The assessment shall be credited 
12.7 	to the special revenue fund and shall be paid to the state treasury within 30 days after 
12.8 	receipt of the bill, which shall constitute notice of said assessment and demand of payment 
12.9 	thereof. The total amount which may be assessed to the several utilities under authority 
12.10 	of this subdivision shall not exceed the sum of the annual budget of the commission 
12.11 	for carrying out the purposes of this subdivision. The assessment for the second third
12.12 	quarter of each fiscal year shall be adjusted to compensate for the amount by which actual 
12.13 	expenditures by the commission for the preceding fiscal year were more or less than the 
12.14 	estimated expenditures previously assessed.

12.15 	Sec. 18.  REPEALER.
 12.16 	Minnesota Statutes 2010, section 216B.242, is repealed.