1.1 	A bill for an act
1.2 	relating to energy; modifying provisions related to software sale fund and 
1.3 	renewable development account; clarifying Department of Commerce regional 
1.4 	and national duties on energy policy; removing obsolete and redundant language; 
1.5 	changing reporting requirements for energy conservation improvements; 
1.6 	providing for cost recovery for certain pollution control products; authorizing 
1.7 	the Public Utilities Commission to approve a multiyear plan for certain utilities; 
1.8 	providing for nuclear power plant decommissioning and storage of used nuclear 
1.9 	fuel; defining certain terms; requiring a report on the rate impact of activities of an 
1.10 	electric utility; making clarifying and technical changes; making provisions for 
1.11 	regulatory incentives granted to an innovative energy project; exempting certain 
1.12 	utilities from the conservation improvement program; allowing assessments 
1.13 	to energy utilities for department regional and national duties; providing an 
1.14 	exemption from greenhouse gas emissions and conservation improvement 
1.15 	program; providing a temporary prohibition on Public Utilities Commission 
1.16 	approval of certain renewable development account expenditures; allowing the 
1.17 	city of Melrose to increase the city's Public Utilities Commission membership;
1.18 	amending Minnesota Statutes 2010, sections 16E.15, subdivision 2; 116C.779, 
1.19 	subdivisions 1, 3; 216A.07, by adding a subdivision; 216B.02, by adding a 
1.20 	subdivision; 216B.026, subdivision 1; 216B.096, subdivision 3; 216B.16, 
1.21 	subdivisions 6b, 7, 9, 15, by adding a subdivision; 216B.1691, subdivision 1, 
1.22 	by adding a subdivision; 216B.1694, by adding a subdivision; 216B.2401; 
1.23 	216B.241, subdivisions 1, 1a, 1c, 2; 216B.2425, subdivision 2; 216B.49, 
1.24 	subdivision 3; 216B.62, subdivisions 2, 3, by adding a subdivision; 216C.11; 
1.25 	216C.264; 216E.18, subdivision 3; 216H.03, subdivision 7; proposing coding 
1.26 	for new law in Minnesota Statutes, chapter 216B; repealing Minnesota Statutes 
1.27 	2010, sections 216A.085; 216B.242; 216C.052, subdivisions 1, 2, 4; 216F.09.
1.28 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

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

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

2.11 	Sec. 2. Minnesota Statutes 2010, section 116C.779, subdivision 1, is amended to read:
2.12 		Subdivision 1.Renewable development account. (a) The public utility that owns 
2.13 	the Prairie Island nuclear generating plant must transfer to a renewable development 
2.14 	account $500,000 each year for each dry cask containing spent fuel that is located at the 
2.15 	Prairie Island power plant for each year the plant is in operation, and $7,500,000 each 
2.16 	year the plant is not in operation if ordered by the commission pursuant to paragraph (d). 
2.17 	The fund transfer must be made if nuclear waste is stored in a dry cask at the independent 
2.18 	spent-fuel storage facility at Prairie Island for any part of a year. Funds in the account 
2.19 	may be expended only for development of renewable energy sources. Preference must be 
2.20 	given to development of renewable energy source projects located within the state. The 
2.21 	utility that owns a nuclear generating plant is eligible to apply for renewable development 
2.22 	fund grants. The utility's proposals must be evaluated by the renewable development fund 
2.23 	board in a manner consistent with that used to evaluate other renewable development fund 
2.24 	project proposals.
2.25 	(b) The public utility that owns the Monticello nuclear generating plant must transfer 
2.26 	to the renewable development account $350,000 each year for each dry cask containing 
2.27 	spent fuel that is located at the Monticello nuclear power plant for each year the plant is 
2.28 	in operation, and $5,250,000 each year the plant is not in operation if ordered by the 
2.29 	commission pursuant to paragraph (d). The fund transfer must be made if nuclear waste 
2.30 	is stored in a dry cask at the independent spent-fuel storage facility at Monticello for 
2.31 	any part of a year.
2.32 	 (c) Expenditures authorized by this subdivision from the account may only be made 
2.33 	after approval by order of the Public Utilities Commission upon a petition by the public 
2.34 	utility. Commission approval is not required for expenditures required under subdivisions 
2.35 	2 and 3, section 116C.7791, or other law.
3.1 	 (d) After discontinuation of operation of the Prairie Island nuclear plant or the 
3.2 	Monticello nuclear plant and each year spent nuclear fuel is stored in dry cask at the 
3.3 	discontinued facility, the commission shall require the public utility to pay $7,500,000 for 
3.4 	the discontinued Prairie Island facility and $5,250,000 for the discontinued Monticello 
3.5 	facility for any year in which the commission finds, by the preponderance of the evidence, 
3.6 	that the public utility did not make a good faith effort to remove the spent nuclear 
3.7 	fuel stored at the facility to a permanent or interim storage site out of the state. This 
3.8 	determination shall be made at least every two years.

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

3.10 	Sec. 3. Minnesota Statutes 2010, section 116C.779, subdivision 3, is amended to read:
3.11 		Subd. 3.Initiative for Renewable Energy and the Environment. (a) Beginning 
3.12 	July 1, 2009, and each July 1 through 2012 2011, $5,000,000 must be allocated from the 
3.13 	renewable development account to fund a grant to the Board of Regents of the University 
3.14 	of Minnesota for the Initiative for Renewable Energy and the Environment for the purposes 
3.15 	described in paragraph (b). The Initiative for Renewable Energy and the Environment 
3.16 	must set aside at least 15 percent of the funds received annually under the grant for 
3.17 	qualified projects conducted at a rural campus or experiment station. Any set-aside funds 
3.18 	not awarded to a rural campus or experiment station at the end of the fiscal year revert 
3.19 	back to the Initiative for Renewable Energy and the Environment for its exclusive use. 
3.20 	This subdivision does not create an obligation to contribute funds to the account.
3.21 	(b) Activities funded under this grant may include, but are not limited to:
3.22 	(1) environmentally sound production of energy from a renewable energy source, 
3.23 	including biomass and agricultural crops;
3.24 	(2) environmentally sound production of hydrogen from biomass and any other 
3.25 	renewable energy source for energy storage and energy utilization;
3.26 	(3) development of energy conservation and efficient energy utilization technologies;
3.27 	(4) energy storage technologies; and
3.28 	(5) analysis of policy options to facilitate adoption of technologies that use or 
3.29 	produce low-carbon renewable energy.
3.30 	(c) For the purposes of this subdivision:
3.31 	(1) "biomass" means plant and animal material, agricultural and forest residues, 
3.32 	mixed municipal solid waste, and sludge from wastewater treatment; and
3.33 	(2) "renewable energy source" means hydro, wind, solar, biomass, and geothermal 
3.34 	energy, and microorganisms used as an energy source.
4.1 	(d) Beginning January 15 of 2010, and each year thereafter, the director of the 
4.2 	Initiative for Renewable Energy and the Environment at the University of Minnesota shall 
4.3 	submit a report to the chair and ranking minority members of the senate and house of 
4.4 	representatives committees with primary jurisdiction over energy finance describing the 
4.5 	activities conducted during the previous year funded under this subdivision.

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

4.7 	Sec. 4. Minnesota Statutes 2010, section 216A.07, is amended by adding a subdivision 
4.8 	to read:
4.9 		Subd. 3a.Regional and national duties. The Department of Commerce has the duty 
4.10 	and power to represent the interests of Minnesota residents, businesses, and governments 
4.11 	before bodies and agencies outside the state that make, interpret, or implement regional, 
4.12 	national, and international energy policy and that regulate and implement regional or 
4.13 	national energy planning or infrastructure development. This subdivision does not limit 
4.14 	regional, national, or international activities of the Public Utilities Commission.

4.15 	EFFECTIVE DATE. This section is effective July 1, 2011.

4.16 	Sec. 5. Minnesota Statutes 2010, section 216B.02, is amended by adding a subdivision 
4.17 	to read:
4.18 		Subd. 1b.Commissioner. "Commissioner" means the commissioner of the 
4.19 	Minnesota Department of Commerce.

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

4.21 	Sec. 6. Minnesota Statutes 2010, section 216B.026, subdivision 1, is amended to read:
4.22 		Subdivision 1.Election. (a) A cooperative electric association may elect to become 
4.23 	subject to rate regulation by the commission pursuant to sections 216B.03 to 216B.23. 
4.24 	The election shall be approved by a majority of members or stockholders voting by mail 
4.25 	ballot initiated by petition of not less than five percent of the members or stockholders of 
4.26 	the association, as determined by membership figures submitted by the association to the 
4.27 	Rural Electric Administration for the month in which the petition was submitted. 
4.28 	(b) For a cooperative electric association that is the product of a merger or 
4.29 	consolidation of three or more associations between December 30, 1996, and January 1, 
4.30 	2001, the number of members or stockholders necessary to initiate the petition shall be no 
4.31 	less than one percent of the members or stockholders of the association.

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

5.2 	Sec. 7. Minnesota Statutes 2010, section 216B.096, subdivision 3, is amended to read:
5.3 		Subd. 3.Utility obligations before cold weather period. Each year, between 
5.4 	September 1 and October 15, each utility must provide all customers, personally or, by 
5.5 	first class mail, or electronically for those requesting electronic billing, a summary of 
5.6 	rights and responsibilities. The summary must also be provided to all new residential 
5.7 	customers when service is initiated.

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

5.9 	Sec. 8. Minnesota Statutes 2010, section 216B.16, subdivision 6b, is amended to read:
5.10 		Subd. 6b.Energy conservation improvement. (a) Except as otherwise provided 
5.11 	in this subdivision, all investments and expenses of a public utility as defined in section 
5.12 	216B.241, subdivision 1, paragraph (i), incurred in connection with energy conservation 
5.13 	improvements shall be recognized and included by the commission in the determination of 
5.14 	just and reasonable rates as if the investments and expenses were directly made or incurred 
5.15 	by the utility in furnishing utility service.
5.16 	(b) The commission shall not include investments and expenses for energy 
5.17 	conservation improvements shall not be included by the commission in the determination 
5.18 	of determining (i) just and reasonable electric and gas rates for retail electric and gas
5.19 	service provided to large electric customer facilities that whose electric utilities  have been 
5.20 	exempted by the commissioner of the department pursuant to under section 216B.241, 
5.21 	subdivision 1a, paragraph (b) with respect to those large customer facilities; or (ii) just and 
5.22 	reasonable gas rates for large energy facilities, large customer facilities whose natural gas 
5.23 	utilities have been exempted by the commissioner under section 216B.241, subdivision 1a, 
5.24 	paragraph (b) or commercial gas customer facilities whose natural gas utilities have been 
5.25 	exempted by the commissioner under section 216B.241, subdivision 1a, paragraph (c).
5.26 	(c) The commission may permit a public utility to file rate schedules providing 
5.27 	for annual recovery of the costs of energy conservation improvements. These rate 
5.28 	schedules may be applicable to less than all the customers in a class of retail customers 
5.29 	if necessary to reflect the requirements of section 216B.241. The commission shall 
5.30 	allow a public utility, without requiring a general rate filing under this section, to reduce 
5.31 	the electric and gas rates applicable to large electric customer facilities that have been 
5.32 	exempted by the commissioner of the department pursuant to under section 216B.241, 
5.33 	subdivision 1a, paragraph (b), and to reduce the gas rate applicable to a large energy 
5.34 	facility, a large customer facility or commercial customer facility that has been exempted 
6.1 	by the commissioner under section 216B.241, subdivision 1a, paragraph (b) or (c), or by 
6.2 	the commission under section 216B.241, subdivision 2, by an amount that reflects the 
6.3 	elimination of energy conservation improvement investments or expenditures for those 
6.4 	facilities. In the event that the commission has set electric or gas rates based on the use of 
6.5 	an accounting methodology that results in the cost of conservation improvements being 
6.6 	recovered from utility customers over a period of years, the rate reduction may occur in a 
6.7 	series of steps to coincide with the recovery of balances due to the utility for conservation 
6.8 	improvements made by the utility on or before December 31, 2007.
6.9 	(d) Investments and expenses of a public utility shall not include electric utility 
6.10 	infrastructure costs as defined in section 216B.1636, subdivision 1, paragraph (b).

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

6.12 	Sec. 9. Minnesota Statutes 2010, section 216B.16, subdivision 7, is amended to read:
6.13 		Subd. 7.Energy and emission control products cost adjustment. Notwithstanding 
6.14 	any other provision of this chapter, the commission may permit a public utility to file 
6.15 	rate schedules containing provisions for the automatic adjustment of charges for public 
6.16 	utility service in direct relation to changes in:
6.17 	(1) federally regulated wholesale rates for energy delivered through interstate 
6.18 	facilities;
6.19 	(2) direct costs for natural gas delivered; or
6.20 	(3) costs for fuel used in generation of electricity or the manufacture of gas; or
6.21 	(4) prudent costs incurred by a public utility for sorbents, reagents, or chemicals 
6.22 	used to control emissions from an electric generation facility, provided that these costs are 
6.23 	not recovered elsewhere in rates. The utility must track and report annually the volumes 
6.24 	and costs of sorbents, reagents, or chemicals using separate accounts by generating plant.

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

6.26 	Sec. 10. Minnesota Statutes 2010, section 216B.16, subdivision 9, is amended to read:
6.27 		Subd. 9.Charitable contribution. The commission shall allow as operating 
6.28 	expenses only those charitable contributions whichthat the commission deems prudent and 
6.29 	whichthat qualify under section 290.21, subdivision 3, clause (b) 300.66, subdivision 3. 
6.30 	Only 50 percent of the qualified contributions shall beare allowed as operating expenses.

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

6.32 	Sec. 11. Minnesota Statutes 2010, section 216B.16, subdivision 15, is amended to read:
7.1 		Subd. 15.Low-income affordability programs. (a) The commission must 
7.2 	consider ability to pay as a factor in setting utility rates and may establish affordability 
7.3 	programs for low-income residential ratepayers in order to ensure affordable, reliable, 
7.4 	and continuous service to low-income utility customers. Affordability programs may 
7.5 	include inverted block rates in which lower energy prices are made available to lower 
7.6 	usage customers. By September 1, 2007, A public utility serving low-income residential 
7.7 	ratepayers who use natural gas for heating must file an affordability program with the 
7.8 	commission. For purposes of this subdivision, "low-income residential ratepayers" means 
7.9 	ratepayers who receive energy assistance from the low-income home energy assistance 
7.10 	program (LIHEAP).
7.11 	(b) Any affordability program the commission orders a utility to implement must:
7.12 	(1) lower the percentage of income that participating low-income households devote 
7.13 	to energy bills;
7.14 	(2) increase participating customer payments over time by increasing the frequency 
7.15 	of payments;
7.16 	(3) decrease or eliminate participating customer arrears;
7.17 	(4) lower the utility costs associated with customer account collection activities; and
7.18 	(5) coordinate the program with other available low-income bill payment assistance 
7.19 	and conservation resources.
7.20 	(c) In ordering affordability programs, the commission may require public utilities to 
7.21 	file program evaluations that measure the effect of the affordability program on:
7.22 	(1) the percentage of income that participating households devote to energy bills;
7.23 	(2) service disconnections; and
7.24 	(3) frequency of customer payments, utility collection costs, arrearages, and bad 
7.25 	debt.
7.26 	(d) The commission must issue orders necessary to implement, administer, and 
7.27 	evaluate affordability programs, and to allow a utility to recover program costs, including 
7.28 	administrative costs, on a timely basis. The commission may not allow a utility to recover 
7.29 	administrative costs, excluding start-up costs, in excess of five percent of total program 
7.30 	costs, or program evaluation costs in excess of two percent of total program costs. The 
7.31 	commission must permit deferred accounting, with carrying costs, for recovery of program 
7.32 	costs incurred during the period between general rate cases.
7.33 	(e) Public utilities may use information collected or created for the purpose of 
7.34 	administering energy assistance to administer affordability programs.

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

8.1 	Sec. 12. Minnesota Statutes 2010, section 216B.16, is amended by adding a 
8.2 	subdivision to read:
8.3 		Subd. 19.Multiyear rate plan. (a) A public utility may propose, and the 
8.4 	commission may approve, approve as modified, or reject, a multiyear rate plan as provided 
8.5 	in this subdivision. The term "multiyear rate plan" refers to a plan establishing the rates 
8.6 	the utility may charge for each year of the specified period of years, which cannot exceed 
8.7 	three years, to be covered by the plan. The commission may approve a multiyear rate plan 
8.8 	only if it finds that the plan establishes just and reasonable rates for the utility, applying 
8.9 	the factors described in subdivision 6. Consistent with subdivision 4, the burden of proof 
8.10 	to demonstrate that the multiyear rate plan is just and reasonable is on the public utility 
8.11 	proposing the plan.
8.12 	(b) Rates charged under the multiyear rate plan must be based only upon the utility's 
8.13 	reasonable and prudent costs of service over the term of the plan, as determined by the 
8.14 	commission, provided that the costs are not being recovered elsewhere in rates. Rate 
8.15 	adjustments authorized under subdivisions 6b and 7 may continue outside of a plan 
8.16 	authorized under this subdivision.
8.17 	(c) The commission may, by order, establish terms, conditions, and procedures for a 
8.18 	multiyear rate plan necessary to implement this section and ensure that rates remain just 
8.19 	and reasonable during the course of the plan, including terms and procedures for rate 
8.20 	adjustment. At any time prior to conclusion of a multiyear rate plan, the commission, 
8.21 	upon its own motion or upon petition of any party, has the discretion to examine the 
8.22 	reasonableness of the utility's rates under the plan, and adjust rates as necessary.
8.23 	(d) In reviewing a multiyear rate plan proposed in a general rate case under 
8.24 	this section, the commission may extend the time requirements for issuance of a final 
8.25 	determination prescribed in this section by an additional 90 days beyond its existing 
8.26 	authority under subdivision 2, paragraph (f).
8.27 	(e) A utility may not file a multiyear rate plan that would establish rates under the 
8.28 	terms of the plan until after May 31, 2012.

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

8.30 	Sec. 13. [216B.1614] NUCLEAR POWER PLANT DECOMMISSIONING AND 
8.31 	STORAGE OF USED NUCLEAR FUEL.
8.32 		Subdivision 1.Decommissioning costs. (a) The Public Utilities Commission shall, 
8.33 	when considering approval of a plan for the accrual of funds for the decommissioning of 
8.34 	nuclear facilities filed in accordance with a commission order, include an evaluation of the 
8.35 	costs, if any, arising from storage of used nuclear fuel that may be incurred by the state of 
9.1 	Minnesota, and any tribal community, county, city, or township where used nuclear fuel is 
9.2 	located following the cessation of operations at a nuclear plant.
9.3 	(b) To assist the commission in making the determination required in paragraph 
9.4 	(a), the filing shall provide cost estimates, including ratepayer impacts, assuming used 
9.5 	nuclear fuel will be stored in the state for 60 years, 100 years, and 200 years following the 
9.6 	cessation of operation of the nuclear plant.
9.7 		Subd. 2.Rate. A public utility filing a decommissioning plan in accordance with 
9.8 	a commission order and this section may include, as part of a general rate case petition, 
9.9 	the costs of decommissioning accrual incurred in complying with a commission order 
9.10 	implementing this section.
9.11 		Subd. 3.Commission report. The commission shall prepare a nuclear 
9.12 	decommissioning report after each of the commission's periodic review of nuclear 
9.13 	decommissioning costs. The report shall be submitted within 180 days of the date of 
9.14 	the final order related to that review to the chairs and ranking minority members of the 
9.15 	legislative committees with primary jurisdiction over energy policy and public safety. 
9.16 	That report shall, without limitation, include the following:
9.17 	(1) an explanation of the commission's funding decisions regarding nuclear 
9.18 	decommissioning; 
9.19 	(2) the progress of the United States Department of Energy to remove from 
9.20 	Minnesota spent fuel produced by nuclear generating plants in Minnesota;
9.21 	(3) an analysis of the financial and other obligations related to decommissioning and 
9.22 	storage of used fuel of the utility holding title to spent nuclear fuel to the state and to host 
9.23 	communities, including affected tribal communities; and
9.24 	(4) any recommendations to the legislature on legislation or other actions that may 
9.25 	be necessary for addressing long-term or indefinite storage costs.

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

9.27 	Sec. 14. Minnesota Statutes 2010, section 216B.1691, subdivision 1, is amended to 
9.28 	read:
9.29 		Subdivision 1.Definitions. (a) Unless otherwise specified in law, "eligible energy 
9.30 	technology" means an energy technology that generates electricity from the following 
9.31 	renewable energy sources:
9.32 	(1) solar;
9.33 	(2) wind;
9.34 	(3) hydroelectric with a capacity of less than 100 megawatts;
10.1 	(4) hydrogen, provided that after January 1, 2010, the hydrogen must be generated 
10.2 	from the resources listed in this paragraph; or
10.3 	(5) biomass, which includes, without limitation, landfill gas; an anaerobic digester 
10.4 	system; the predominantly organic components of wastewater effluent, sludge, or related 
10.5 	by-products from publicly owned treatment works, but not including incineration of 
10.6 	wastewater sludge to produce electricity; and an energy recovery facility used to capture 
10.7 	the heat value of mixed municipal solid waste or refuse-derived fuel from mixed municipal 
10.8 	solid waste as a primary fuel.
10.9 	(b) "Electric utility" means a public utility providing electric service, a generation 
10.10 	and transmission cooperative electric association, a municipal power agency, or a power 
10.11 	district.
10.12 	(c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year 
10.13 	by an electric utility to retail customers of the electric utility or to a distribution utility 
10.14 	for distribution to the retail customers of the distribution utility. "Total retail electric 
10.15 	sales" does not include the sale of hydroelectricity supplied by a federal power marketing 
10.16 	administration or other federal agency, regardless of whether the sales are directly to a 
10.17 	distribution utility or are made to a generation and transmission utility and pooled for 
10.18 	further allocation to a distribution utility.

10.19 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2010, 
10.20 	and applies to sales of electricity made on and after that date.

10.21 	Sec. 15. Minnesota Statutes 2010, section 216B.1691, is amended by adding a 
10.22 	subdivision to read:
10.23 		Subd. 2e.Rate impact of standard compliance; report. Each electric utility must 
10.24 	submit to the commission and the legislative committees with primary jurisdiction over 
10.25 	energy policy a report containing an estimation of the rate impact of activities of the 
10.26 	electric utility necessary to comply with section 216B.1691. The rate impact estimate 
10.27 	must be for wholesale rates and, if the electric utility makes retail sales, the estimate 
10.28 	shall also be for the impact on the electric utility's retail rates. Those activities include, 
10.29 	without limitation, energy purchases, generation facility acquisition and construction, 
10.30 	and transmission improvements. An initial report must be submitted within 150 days of 
10.31 	the effective date of this section. After the initial report, a report must be updated and 
10.32 	submitted as part of each integrated resource plan or plan modification filed by the electric 
10.33 	utility under section 216B.2422. The reporting obligation of an electric utility under 
10.34 	this subdivision expires December 31, 2025, for an electric utility subject to subdivision 
11.1 	2a, paragraph (a), and December 31, 2020, for an electric utility subject to subdivision 
11.2 	2a, paragraph (b).

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

11.4 	Sec. 16. Minnesota Statutes 2010, section 216B.1694, is amended by adding a 
11.5 	subdivision to read:
11.6 		Subd. 3.Staging and permitting. (a) A natural gas-fired plant that is located 
11.7 	on one site designated as an innovative energy project site under subdivision 1, clause 
11.8 	(3), is accorded the regulatory incentives granted to an innovative energy project under 
11.9 	subdivision 2, clauses (1) through (3), and may exercise the authorities therein.
11.10 	(b) Following issuance of a final state or federal environmental impact statement for 
11.11 	an innovative energy project that was a subject of contested case proceedings before an 
11.12 	administrative law judge:
11.13 	(1) site and route permits and water appropriation approvals for an innovative energy 
11.14 	project must also be deemed valid for a plant meeting the requirements of paragraph (a) 
11.15 	and shall remain valid until the earlier of (i) four years from the date the final required 
11.16 	state or federal preconstruction permit is issued or (ii) June 30, 2019; and
11.17 	(2) no air, water, or other permit issued by a state agency that is necessary for 
11.18 	constructing an innovative energy project may be the subject of contested case hearings, 
11.19 	notwithstanding Minnesota Rules, parts 7000.1750 to 7000.2200.

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

11.21 	Sec. 17. Minnesota Statutes 2010, section 216B.2401, is amended to read:
11.22 	216B.2401 ENERGY CONSERVATION POLICY GOAL.
11.23 	It is the energy policy of the state of Minnesota to achieve annual energy savings 
11.24 	equal to 1.5 percent of annual retail energy sales of electricity and natural gas directly 
11.25 	through energy conservation improvement programs and rate design, such as inverted 
11.26 	block rates in which lower energy prices are made available to lower-usage residential 
11.27 	customers, and indirectly through energy codes and appliance standards, programs 
11.28 	designed to transform the market or change consumer behavior, energy savings resulting 
11.29 	from efficiency improvements to the utility infrastructure and system, and other efforts to 
11.30 	promote energy efficiency and energy conservation.

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

12.1 	Sec. 18. Minnesota Statutes 2010, section 216B.241, subdivision 1, is amended to read:
12.2 		Subdivision 1.Definitions. For purposes of this section and section 216B.16, 
12.3 	subdivision 6b, the terms defined in this subdivision have the meanings given them.
12.4 	(a) "Commission" means the Public Utilities Commission.
12.5 	(b) "Commissioner" means the commissioner of commerce.
12.6 	(c) "Customer facility" means all buildings, structures, equipment, and installations 
12.7 	at a single site.
12.8 	(d) "Department" means the Department of Commerce.
12.9 	(e) (d) "Energy conservation" means demand-side management of energy supplies 
12.10 	resulting in a net reduction in energy use. Load management that reduces overall energy 
12.11 	use is energy conservation.
12.12 	(f) (e) "Energy conservation improvement" means a project that results in energy 
12.13 	efficiency or energy conservation. Energy conservation improvement may include waste 
12.14 	heat recovery converted into electricity but does not include electric utility infrastructure 
12.15 	projects approved by the commission under section 216B.1636.
12.16 	(g) (f) "Energy efficiency" means measures or programs, including energy 
12.17 	conservation measures or programs, that target consumer behavior, equipment, processes, 
12.18 	or devices designed to produce either an absolute decrease in consumption of electric 
12.19 	energy or natural gas or a decrease in consumption of electric energy or natural gas on a 
12.20 	per unit of production basis without a reduction in the quality or level of service provided 
12.21 	to the energy consumer.
12.22 	(h) (g) "Gross annual retail energy sales" means annual electric sales to all retail 
12.23 	customers in a utility's or association's Minnesota service territory or natural gas 
12.24 	throughput to all retail customers, including natural gas transportation customers, on a 
12.25 	utility's distribution system in Minnesota. For purposes of this section, gross annual 
12.26 	retail energy sales exclude:
12.27 	(1) gas sales to:
12.28 	(i) a large energy facility;
12.29 	(ii) a large customer facility whose natural gas utility has been exempted by the 
12.30 	commissioner under subdivision 1a, paragraph (b), with respect to natural gas sales made 
12.31 	to the large customer facility; and
12.32 	(iii) a commercial gas customer facility whose natural gas utility has been exempted 
12.33 	by the commissioner under subdivision 1a, paragraph (c), with respect to natural gas sales 
12.34 	made to the commercial gas customer facility; and gas and
13.1 	(2) electric sales to a large electric customer facility whose electric utility has been 
13.2 	exempted by the commissioner under subdivision 1a, paragraph (b), with respect to 
13.3 	electric sales made to the large customer facility.
13.4 	(i) (h) "Investments and expenses of a public utility" includes the investments 
13.5 	and expenses incurred by a public utility in connection with an energy conservation 
13.6 	improvement, including but not limited to:
13.7 	(1) the differential in interest cost between the market rate and the rate charged on a 
13.8 	no-interest or below-market interest loan made by a public utility to a customer for the 
13.9 	purchase or installation of an energy conservation improvement;
13.10 	(2) the difference between the utility's cost of purchase or installation of energy 
13.11 	conservation improvements and any price charged by a public utility to a customer for 
13.12 	such improvements.
13.13 	(j) (i) "Large electric customer facility" means a customer facility that imposes all 
13.14 	buildings, structures, equipment, and installations at a single site that collectively: (1) 
13.15 	impose a peak electrical demand on an electric utility's system of not less than 20,000 
13.16 	kilowatts, measured in the same way as the utility that serves the customer facility 
13.17 	measures electrical demand for billing purposes, and for which electric services are 
13.18 	provided at retail on a single bill by a utility operating in the state or (2) consume not less 
13.19 	than 500 million cubic feet of natural gas annually. In calculating peak electrical demand, 
13.20 	a large customer facility may include demand offset by on-site cogeneration facilities and, 
13.21 	if engaged in mineral extraction, may aggregate peak energy demand from the large 
13.22 	customer facility's mining and processing operations.
13.23 	(k) (j) "Large energy facility" has the meaning given it in section 216B.2421, 
13.24 	subdivision 2, clause (1).
13.25 	(l) (k) "Load management" means an activity, service, or technology to change the 
13.26 	timing or the efficiency of a customer's use of energy that allows a utility or a customer to 
13.27 	respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.
13.28 	(m) (l) "Low-income programs" means energy conservation improvement programs 
13.29 	that directly serve the needs of low-income persons, including low-income renters.
13.30 	(m) "Qualifying utility" means a utility that supplies the energy to a customer that 
13.31 	enables the customer to qualify as a large customer facility.
13.32 	(n) "Waste heat recovery converted into electricity" means an energy recovery 
13.33 	process that converts otherwise lost energy from the heat of exhaust stacks or pipes used 
13.34 	for engines or manufacturing or industrial processes, or the reduction of high pressure 
13.35 	in water or gas pipelines.

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

14.1 	Sec. 19. Minnesota Statutes 2010, section 216B.241, subdivision 1a, is amended to 
14.2 	read:
14.3 		Subd. 1a.Investment, expenditure, and contribution; public utility. (a) For 
14.4 	purposes of this subdivision and subdivision 2, "public utility" has the meaning given it 
14.5 	in section 216B.02, subdivision 4. Each public utility shall spend and invest for energy 
14.6 	conservation improvements under this subdivision and subdivision 2 the following 
14.7 	amounts:
14.8 	(1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues 
14.9 	from service provided in the state;
14.10 	(2) for a utility that furnishes electric service, 1.5 percent of its gross operating 
14.11 	revenues from service provided in the state; and
14.12 	(3) for a utility that furnishes electric service and that operates a nuclear-powered 
14.13 	electric generating plant within the state, two percent of its gross operating revenues 
14.14 	from service provided in the state.
14.15 	For purposes of this paragraph (a), "gross operating revenues" do not include 
14.16 	revenues from large electric customer facilities exempted by the commissioner under 
14.17 	paragraph (b), or from commercial gas customers that are exempted under paragraph 
14.18 	(c) or (e).
14.19 	(b) The owner of a large electric customer facility may petition the commissioner to 
14.20 	exempt both electric and gas utilities serving the large energy customer facility from the 
14.21 	investment and expenditure requirements of paragraph (a) with respect to retail revenues 
14.22 	attributable to the large customer facility. At a minimum, the petition must be supported 
14.23 	by evidence relating to competitive or economic pressures on the customer and a showing 
14.24 	by the customer of reasonable efforts to identify, evaluate, and implement cost-effective 
14.25 	conservation improvements at the facility. If a petition is filed on or before October 1 of 
14.26 	any year, the order of the commissioner to exempt revenues attributable to the facility can 
14.27 	be effective no earlier than January 1 of the following year. The commissioner shall 
14.28 	not grant an exemption if the commissioner determines that granting the exemption 
14.29 	is contrary to the public interest. The commissioner may, after investigation, rescind 
14.30 	any exemption granted under this paragraph upon a determination that the customer is 
14.31 	not continuing to make reasonable efforts to identify, evaluate, and implement energy 
14.32 	conservation improvements at the large electric customer facility. For the purposes of 
14.33 	investigations by the commissioner under this paragraph, the owner of any large electric 
14.34 	customer facility shall, upon request, provide the commissioner with updated information 
14.35 	comparable to that originally supplied in or with the owner's original petition under this 
14.36 	paragraph. The filing must include a discussion of the competitive or economic pressures 
15.1 	facing the owner of the facility and the efforts taken by the owner to identify, evaluate, 
15.2 	and implement energy conservation and efficiency improvements. A filing submitted on 
15.3 	or before October 1 of any year must be approved within 90 days and become effective 
15.4 	January 1 of the year following the filing, unless the commissioner finds that the owner of 
15.5 	the large customer facility has failed to take reasonable measures to identify, evaluate, 
15.6 	and implement energy conservation and efficiency improvements. If a facility qualifies as 
15.7 	a large customer facility solely due to its peak electrical demand or annual natural gas 
15.8 	usage, the exemption may be limited to the qualifying utility if the commissioner finds 
15.9 	that the owner of the large customer facility has failed to take reasonable measures to 
15.10 	identify, evaluate, and implement energy conservation and efficiency improvements with 
15.11 	respect to the nonqualifying utility. Once an exemption is approved, the commissioner 
15.12 	may request the owner of a large customer facility to submit, not more often than once 
15.13 	every five years, a report demonstrating the large customer facility's ongoing commitment 
15.14 	to energy conservation and efficiency improvement after the exemption filing. The 
15.15 	commissioner may request such reports for up to ten years after the effective date of 
15.16 	the exemption, unless the majority ownership of the large customer facility changes, in 
15.17 	which case the commissioner may request additional reports for up to ten years after the 
15.18 	change in ownership occurs. The commissioner may, within 180 days of receiving a report 
15.19 	submitted under this paragraph, rescind any exemption granted under this paragraph upon 
15.20 	a determination that the large customer facility is not continuing to make reasonable efforts 
15.21 	to identify, evaluate, and implement energy conservation improvements. A large customer 
15.22 	facility that is, under an order from the commissioner, exempt from the investment and 
15.23 	expenditure requirements of paragraph (a) as of December 31, 2010, is not required to 
15.24 	submit a report to retain its exempt status, except as otherwise provided in this paragraph 
15.25 	with respect to ownership changes. No exempt large customer facility may participate in 
15.26 	a utility conservation improvement program unless the owner of the facility submits a 
15.27 	filing with the commissioner to withdraw its exemption.
15.28 	(c) A commercial gas customer that is not a large customer facility and that 
15.29 	purchases or acquires natural gas from a public utility having fewer than 600,000 natural 
15.30 	gas customers in Minnesota may petition the commissioner to exempt gas utilities serving 
15.31 	the commercial gas customer from the investment and expenditure requirements of 
15.32 	paragraph (a) with respect to retail revenues attributable to the commercial gas customer. 
15.33 	The petition must be supported by evidence demonstrating that the commercial gas 
15.34 	customer has acquired or can reasonably acquire the capability to bypass use of the utility's 
15.35 	gas distribution system by obtaining natural gas directly from a supplier not regulated by 
16.1 	the commission. The commissioner shall grant the exemption if the commissioner finds 
16.2 	that the petitioner has made the demonstration required by this paragraph.
16.3 	(d) The commissioner may require investments or spending greater than the amounts 
16.4 	required under this subdivision for a public utility whose most recent advance forecast 
16.5 	required under section 216B.2422 or 216C.17 projects a peak demand deficit of 100 
16.6 	megawatts or greater within five years under midrange forecast assumptions.
16.7 	(d) (e) A public utility or owner of a large electric customer facility may appeal a 
16.8 	decision of the commissioner under paragraph (b) or, (c), or (d) to the commission under 
16.9 	subdivision 2. In reviewing a decision of the commissioner under paragraph (b) or, (c), or 
16.10 	(d), the commission shall rescind the decision if it finds that the required investments or 
16.11 	spending will:
16.12 	(1) not result in cost-effective energy conservation improvements; or
16.13 	(2) otherwise not be in the public interest.

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

16.15 	Sec. 20. Minnesota Statutes 2010, section 216B.241, subdivision 1c, is amended to 
16.16 	read:
16.17 		Subd. 1c.Energy-saving goals. (a) The commissioner shall establish energy-saving 
16.18 	goals for energy conservation improvement expenditures and shall evaluate an energy 
16.19 	conservation improvement program on how well it meets the goals set.
16.20 	(b) Each individual utility and association shall have an annual energy-savings 
16.21 	goal equivalent to 1.5 percent of gross annual retail energy sales unless modified by the 
16.22 	commissioner under paragraph (d). The savings goals must be calculated based on the 
16.23 	most recent three-year weather normalized average. A utility or association may elect to 
16.24 	carry forward energy savings in excess of 1.5 percent for a year to the succeeding three 
16.25 	calendar years, except that savings from electric utility infrastructure projects allowed 
16.26 	under paragraph (d) may be carried forward for five years. A particular energy savings can 
16.27 	be used only for one year's goal.
16.28 	(c) The commissioner must adopt a filing schedule that is designed to have all 
16.29 	utilities and associations operating under an energy-savings plan by calendar year 2010.
16.30 	(d) In its energy conservation improvement plan filing, a utility or association may 
16.31 	request the commissioner to adjust its annual energy-savings percentage goal based on 
16.32 	its historical conservation investment experience, customer class makeup, load growth, a 
16.33 	conservation potential study, or other factors the commissioner determines warrants an 
16.34 	adjustment. The commissioner may not approve a plan of a public utility that provides for 
17.1 	an annual energy-savings goal of less than one percent of gross annual retail energy sales 
17.2 	from energy conservation improvements.
17.3 	A utility or association may include in its energy conservation plan energy savings 
17.4 	from electric utility infrastructure projects approved by the commission under section 
17.5 	216B.1636 or waste heat recovery converted into electricity projects that may count as 
17.6 	energy savings in addition to the a minimum energy-savings goal of at least one percent 
17.7 	for energy conservation improvements. Electric utility infrastructure projects must result 
17.8 	in increased energy efficiency greater than that which would have occurred through 
17.9 	normal maintenance activity.
17.10 	(e) An energy-savings goal is not satisfied by attaining the revenue expenditure 
17.11 	requirements of subdivisions 1a and 1b, but can only be satisfied by meeting the 
17.12 	energy-savings goal established in this subdivision.
17.13 	(f) An association or utility is not required to make energy conservation investments 
17.14 	to attain the energy-savings goals of this subdivision that are not cost-effective even 
17.15 	if the investment is necessary to attain the energy-savings goals. For the purpose of 
17.16 	this paragraph, in determining cost-effectiveness, the commissioner shall consider the 
17.17 	costs and benefits to ratepayers, the utility, participants, and society. In addition, the 
17.18 	commissioner shall consider the rate at which an association or municipal utility is 
17.19 	increasing its energy savings and its expenditures on energy conservation.
17.20 	(g) On an annual basis, the commissioner shall produce and make publicly available 
17.21 	a report on the annual energy savings and estimated carbon dioxide reductions achieved 
17.22 	by the energy conservation improvement programs for the two most recent years for 
17.23 	which data is available. The commissioner shall report on program performance both in 
17.24 	the aggregate and for each entity filing an energy conservation improvement plan for 
17.25 	approval or review by the commissioner.
17.26 	(h) By January 15, 2010, the commissioner shall report to the legislature whether 
17.27 	the spending requirements under subdivisions 1a and 1b are necessary to achieve the 
17.28 	energy-savings goals established in this subdivision.

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

17.31 	Sec. 21. Minnesota Statutes 2010, section 216B.241, subdivision 2, is amended to read:
17.32 		Subd. 2.Programs. (a) The commissioner may require public utilities to make 
17.33 	investments and expenditures in energy conservation improvements, explicitly setting 
17.34 	forth the interest rates, prices, and terms under which the improvements must be offered to 
18.1 	the customers. The required programs must cover no more than a three-year period. Public 
18.2 	utilities shall file conservation improvement plans by June 1, on a schedule determined by 
18.3 	order of the commissioner, but at least every three years. Plans received by a public utility 
18.4 	by June 1 must be approved or approved as modified by the commissioner by December 
18.5 	1 of that same year. The commissioner shall evaluate the program on the basis of 
18.6 	cost-effectiveness and the reliability of technologies employed. The commissioner's order 
18.7 	must provide to the extent practicable for a free choice, by consumers participating in the 
18.8 	program, of the device, method, material, or project constituting the energy conservation 
18.9 	improvement and for a free choice of the seller, installer, or contractor of the energy 
18.10 	conservation improvement, provided that the device, method, material, or project seller, 
18.11 	installer, or contractor is duly licensed, certified, approved, or qualified, including under 
18.12 	the residential conservation services program, where applicable.
18.13 	(b) The commissioner may require a utility to make an energy conservation 
18.14 	improvement investment or expenditure whenever the commissioner finds that the 
18.15 	improvement will result in energy savings at a total cost to the utility less than the cost 
18.16 	to the utility to produce or purchase an equivalent amount of new supply of energy. The 
18.17 	commissioner shall nevertheless ensure that every public utility operate one or more 
18.18 	programs under periodic review by the department.
18.19 	(c) Each public utility subject to subdivision 1a may spend and invest annually up to 
18.20 	ten percent of the total amount required to be spent and invested on energy conservation 
18.21 	improvements under this section by the utility on research and development projects 
18.22 	that meet the definition of energy conservation improvement in subdivision 1 and that 
18.23 	are funded directly by the public utility.
18.24 	(d) A public utility may not spend for or invest in energy conservation improvements 
18.25 	that directly benefit a large energy facility or a large electric customer facility for which 
18.26 	the commissioner has issued an exemption pursuant to subdivision 1a, paragraph (b). 
18.27 	The commissioner shall consider and may require a utility to undertake a program 
18.28 	suggested by an outside source, including a political subdivision, a nonprofit corporation, 
18.29 	or community organization.
18.30 	(e) A utility, a political subdivision, or a nonprofit or community organization 
18.31 	that has suggested a program, the attorney general acting on behalf of consumers and 
18.32 	small business interests, or a utility customer that has suggested a program and is not 
18.33 	represented by the attorney general under section 8.33 may petition the commission to 
18.34 	modify or revoke a department decision under this section, and the commission may do 
18.35 	so if it determines that the program is not cost-effective, does not adequately address the 
18.36 	residential conservation improvement needs of low-income persons, has a long-range 
19.1 	negative effect on one or more classes of customers, or is otherwise not in the public 
19.2 	interest. The commission shall reject a petition that, on its face, fails to make a reasonable 
19.3 	argument that a program is not in the public interest.
19.4 	(f) The commissioner may order a public utility to include, with the filing of the 
19.5 	utility's proposed conservation improvement plan under paragraph (a) annual status report, 
19.6 	the results of an independent audit of the utility's conservation improvement programs and 
19.7 	expenditures performed by the department or an auditor with experience in the provision 
19.8 	of energy conservation and energy efficiency services approved by the commissioner and 
19.9 	chosen by the utility. The audit must specify the energy savings or increased efficiency 
19.10 	in the use of energy within the service territory of the utility that is the result of the 
19.11 	spending and investments. The audit must evaluate the cost-effectiveness of the utility's 
19.12 	conservation programs.
19.13 	(g) A gas utility may not spend for or invest in energy conservation improvements 
19.14 	that directly benefit a large customer facility or commercial gas customer facility for 
19.15 	which the commissioner has issued an exemption pursuant to subdivision 1a, paragraph 
19.16 	(b), (c), or (e). The commissioner shall consider and may require a utility to undertake 
19.17 	a program suggested by an outside source, including a political subdivision, a nonprofit 
19.18 	corporation, or community organization.

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

19.20 	Sec. 22. Minnesota Statutes 2010, section 216B.2425, subdivision 2, is amended to 
19.21 	read:
19.22 		Subd. 2.List development; transmission projects report. (a) By November 
19.23 	1 of each odd-numbered year, a transmission projects report must be submitted to the 
19.24 	commission by each utility, organization, or company that:
19.25 	(1) is a public utility, a municipal utility, a cooperative electric association, the 
19.26 	generation and transmission organization that serves each utility or association, or a 
19.27 	transmission company; and
19.28 	(2) owns or operates electric transmission lines in Minnesota, except a company or 
19.29 	organization that owns a transmission line that serves a single customer or interconnects a 
19.30 	single generating facility.
19.31 	(b) The report may be submitted jointly or individually to the commission.
19.32 	(c) The report must:
19.33 	(1) list specific present and reasonably foreseeable future inadequacies in the 
19.34 	transmission system in Minnesota;
19.35 	(2) identify alternative means of addressing each inadequacy listed;
20.1 	(3) identify general economic, environmental, and social issues associated with 
20.2 	each alternative; and
20.3 	(4) provide a summary of public input related to the list of inadequacies and the role 
20.4 	of local government officials and other interested persons in assisting to develop the list 
20.5 	and analyze alternatives.
20.6 	(d) To meet the requirements of this subdivision, reporting parties may rely on 
20.7 	available information and analysis developed by a regional transmission organization 
20.8 	or any subgroup of a regional transmission organization and may develop and include 
20.9 	additional information as necessary.

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

20.11 	Sec. 23. Minnesota Statutes 2010, section 216B.49, subdivision 3, is amended to read:
20.12 		Subd. 3.Commission approval required. It shall beis unlawful for any public 
20.13 	utility organized under the laws of this state to offer or sell any security or, if organized 
20.14 	under the laws of any other state or foreign country, to subject property in this state to 
20.15 	an encumbrance for the purpose of securing the payment of any indebtedness unless the 
20.16 	security issuance of the public utility shallis first be approved by the commission, either 
20.17 	as an individual issuance or as one of multiple possible issuances approved in the course 
20.18 	of a periodic proceeding reviewing the utility's proposed sources and uses of capital funds. 
20.19 	Approval by the commission shallmust be by formal written order.

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

20.21 	Sec. 24. Minnesota Statutes 2010, section 216B.62, subdivision 2, is amended to read:
20.22 		Subd. 2.Assessing specific utility. Whenever the commission or department, in a 
20.23 	proceeding upon its own motion, on complaint, or upon an application to it, shall deem it 
20.24 	necessary, in order to carry out the duties imposed under this chapter and section 216A.085
20.25 	(1) to investigate the books, accounts, practices, and activities of, or make appraisals of 
20.26 	the property of, any public utility, (2) to render any engineering or accounting services to 
20.27 	any public utility, or (3) to intervene before an energy regulatory agency, the public utility 
20.28 	shall pay the expenses reasonably attributable to the investigation, appraisal, service, 
20.29 	or intervention. The commission and department shall ascertain the expenses, and the 
20.30 	department shall render a bill therefor to the public utility, either at the conclusion of the 
20.31 	investigation, appraisal, or services, or from time to time during its progress, which bill 
20.32 	shall constitute notice of the assessment and a demand for payment. The amount of the 
20.33 	bills so rendered by the department shall be paid by the public utility into the state treasury 
21.1 	within 30 days from the date of rendition. The total amount, in any one calendar year, for 
21.2 	which any public utility shall become liable, by reason of costs incurred by the commission 
21.3 	within that calendar year, shall not exceed two-fifths of one percent of the gross operating 
21.4 	revenue from retail sales of gas, or electric service by the public utility within the state in 
21.5 	the last preceding calendar year. Where, pursuant to this subdivision, costs are incurred 
21.6 	within any calendar year which are in excess of two-fifths of one percent of the gross 
21.7 	operating revenues, the excess costs shall not be chargeable as part of the remainder under 
21.8 	subdivision 3, but shall be paid out of the general appropriation to the department and 
21.9 	commission. In the case of public utilities offering more than one public utility service 
21.10 	only the gross operating revenues from the public utility service in connection with which 
21.11 	the investigation is being conducted shall be considered when determining this limitation.

21.12 	EFFECTIVE DATE. This section is effective July 1, 2011.

21.13 	Sec. 25. Minnesota Statutes 2010, section 216B.62, subdivision 3, is amended to read:
21.14 		Subd. 3.Assessing all public utilities. The department and commission shall 
21.15 	quarterly, at least 30 days before the start of each quarter, estimate the total of their 
21.16 	expenditures in the performance of their duties relating to public utilities under sections 
21.17 	216A.085 and216B.01 to 216B.67, other than amounts chargeable to public utilities 
21.18 	under subdivision 2, 6, 7, or 8. The remainder shall be assessed by the commission and 
21.19 	department to the several public utilities in proportion to their respective gross operating 
21.20 	revenues from retail sales of gas or electric service within the state during the last calendar 
21.21 	year. The assessment shall be paid into the state treasury within 30 days after the bill has 
21.22 	been transmitted via mail, personal delivery, or electronic service to the several public 
21.23 	utilities, which shall constitute notice of the assessment and demand of payment thereof. 
21.24 	The total amount which may be assessed to the public utilities, under authority of this 
21.25 	subdivision, shall not exceed one-sixth of one percent of the total gross operating revenues 
21.26 	of the public utilities during the calendar year from retail sales of gas or electric service 
21.27 	within the state. The assessment for the third quarter of each fiscal year shall be adjusted 
21.28 	to compensate for the amount by which actual expenditures by the commission and 
21.29 	department for the preceding fiscal year were more or less than the estimated expenditures 
21.30 	previously assessed.

21.31 	EFFECTIVE DATE. This section is effective July 1, 2011.

21.32 	Sec. 26. Minnesota Statutes 2010, section 216B.62, is amended by adding a 
21.33 	subdivision to read:
22.1 		Subd. 3b.Assessment for department regional and national duties. In addition 
22.2 	to other assessments in subdivision 3, the department may assess up to $1,000,000 per 
22.3 	fiscal year for performing its duties under section 216A.07, subdivision 3a. The amount 
22.4 	in this subdivision shall be assessed to energy utilities in proportion to their respective 
22.5 	gross operating revenues from retail sales of gas or electric service within the state 
22.6 	during the last calendar year and shall be deposited into an account in the special revenue 
22.7 	fund and is appropriated to the commissioner of commerce for the purposes of section 
22.8 	216A.07, subdivision 3a. An assessment made under this subdivision is not subject to 
22.9 	the cap on assessments provided in subdivision 3 or any other law. For the purpose of 
22.10 	this subdivision, an "energy utility" means public utilities, generation and transmission 
22.11 	cooperative electric associations, and municipal power agencies providing natural gas or 
22.12 	electric service in the state. This subdivision expires June 30, 2015.

22.13 	EFFECTIVE DATE. This section is effective July 1, 2011.

22.14 	Sec. 27. Minnesota Statutes 2010, section 216C.11, is amended to read:
22.15 	216C.11 ENERGY CONSERVATION INFORMATION CENTER.
22.16 	The commissioner shall establish an Energy Information Center in the department's 
22.17 	offices in St. Paul. The information center shall maintain a toll-free telephone information 
22.18 	service and disseminate printed materials on energy conservation topics, including but 
22.19 	not limited to, availability of loans and other public and private financing methods 
22.20 	for energy conservation physical improvements, the techniques and materials used to 
22.21 	conserve energy in buildings, including retrofitting or upgrading insulation and installing 
22.22 	weatherstripping, the projected prices and availability of different sources of energy, 
22.23 	and alternative sources of energy.
22.24 	The Energy Information Center shall serve as the official Minnesota Alcohol Fuels 
22.25 	Information Center and shall disseminate information, printed, by the toll-free telephone 
22.26 	information service, or otherwise on the applicability and technology of alcohol fuels.
22.27 	The information center shall include information on the potential hazards of energy 
22.28 	conservation techniques and improvements in the printed materials disseminated. The 
22.29 	commissioner shall not be liable for damages arising from the installation or operation of 
22.30 	equipment or materials recommended by the information center.
22.31 	The information center shall use the information collected under section 216C.02, 
22.32 	subdivision 1, to maintain a central source of information on conservation and other 
22.33 	energy-related programs, including both programs required by law or rule and programs 
22.34 	developed and carried on voluntarily. In particular, the information center shall compile 
23.1 	and maintain information on policies covering disconnections or denials of fuel during 
23.2 	cold weather adopted by public utilities and other fuel suppliers not governed by section 
23.3 	216B.096 or 216B.097, including the number of households disconnected or denied fuel 
23.4 	and the duration of the disconnections or denials.

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

23.6 	Sec. 28. Minnesota Statutes 2010, section 216C.264, is amended to read:
23.7 	216C.264 COORDINATING RESIDENTIAL WEATHERIZATION 
23.8 	PROGRAMS.
23.9 		Subdivision 1.Agency designation. The department is the state agency to apply 
23.10 	for, receive, and disburse money made available to the state by federal law for the purpose 
23.11 	of weatherizing the residences of low-income persons. The commissioner must coordinate 
23.12 	available federal money with state money appropriated for this purpose.
23.13 		Subd. 2.Grants. The commissioner must make grants of federal and state money 
23.14 	to community action agencies and other public or private nonprofit agencies for the 
23.15 	purpose of weatherizing the residences of low-income persons. Grant applications must 
23.16 	be submitted in accordance with rules promulgated by the commissioner.
23.17 		Subd. 3.Benefits of weatherization. In the case of any grant made to an owner of a 
23.18 	rental dwelling unit for weatherization, the commissioner must require that (1) the benefits 
23.19 	of weatherization assistance in connection with the dwelling unit accrue primarily to the 
23.20 	low-income family that resides in the unit; (2) the rents on the dwelling unit will not be 
23.21 	raised because of any increase in value due solely to the weatherization assistance; and (3) 
23.22 	no undue or excessive enhancement will occur to the value of the dwelling unit.
23.23 		Subd. 4.Rules. The commissioner must promulgate rules that describe procedures 
23.24 	for the administration of grants, data to be reported by grant recipients, and compliance 
23.25 	with relevant federal regulations. The commissioner must require that a rental unit 
23.26 	weatherized under this section be rented to a household meeting the income limits of 
23.27 	the program for 24 of the 36 months after weatherization is complete. In applying this 
23.28 	restriction to multiunit buildings weatherized under this section, the commissioner must 
23.29 	require that occupancy continue to reflect the proportion of eligible households in the 
23.30 	building at the time of weatherization.
23.31 		Subd. 5.Grant allocation. The commissioner must distribute supplementary 
23.32 	state grants in a manner consistent with the goal of producing the maximum number of 
23.33 	weatherized units. Supplementary state grants are provided primarily for the payment of 
24.1 	additional labor costs for the federal weatherization program, and as an incentive for the 
24.2 	increased production of weatherized units.
24.3 	Criteria for the allocation of state grants to local agencies include existing local 
24.4 	agency production levels, emergency needs, and the potential for maintaining or increasing 
24.5 	acceptable levels of production in the area.
24.6 	An eligible local agency may receive advance funding for 90 days' production, but 
24.7 	thereafter must receive grants solely on the basis of program criteria.
24.8 		Subd. 6.Eligibility criteria. To the extent allowed by federal regulations, the 
24.9 	commissioner must ensure that the same income eligibility criteria apply to both the 
24.10 	weatherization program and the energy assistance program.

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

24.12 	Sec. 29. Minnesota Statutes 2010, section 216E.18, subdivision 3, is amended to read:
24.13 		Subd. 3.Funding; assessment. The commission shall finance its baseline studies, 
24.14 	general environmental studies, development of criteria, inventory preparation, monitoring 
24.15 	of conditions placed on site and route permits, and all other work, other than specific site 
24.16 	and route designation, from an assessment made quarterly, at least 30 days before the start 
24.17 	of each quarter, by the commission against all utilities with annual retail kilowatt-hour 
24.18 	sales greater than 4,000,000 kilowatt-hours in the previous calendar year.
24.19 	Each share shall be determined as follows: (1) the ratio that the annual retail 
24.20 	kilowatt-hour sales in the state of each utility bears to the annual total retail kilowatt-hour 
24.21 	sales in the state of all these utilities, multiplied by 0.667, plus (2) the ratio that the annual 
24.22 	gross revenue from retail kilowatt-hour sales in the state of each utility bears to the annual 
24.23 	total gross revenues from retail kilowatt-hour sales in the state of all these utilities, 
24.24 	multiplied by 0.333, as determined by the commission. The assessment shall be credited 
24.25 	to the special revenue fund and shall be paid to the state treasury within 30 days after 
24.26 	receipt of the bill, which shall constitute notice of said assessment and demand of payment 
24.27 	thereof. The total amount which may be assessed to the several utilities under authority 
24.28 	of this subdivision shall not exceed the sum of the annual budget of the commission 
24.29 	for carrying out the purposes of this subdivision. The assessment for the second third
24.30 	quarter of each fiscal year shall be adjusted to compensate for the amount by which actual 
24.31 	expenditures by the commission for the preceding fiscal year were more or less than the 
24.32 	estimated expenditures previously assessed.

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

25.1 	Sec. 30. Minnesota Statutes 2010, section 216H.03, subdivision 7, is amended to read:
25.2 		Subd. 7.Other exemptions. The prohibitions in subdivision 3 do not apply to:
25.3 	(1) a new large energy facility under consideration by the Public Utilities 
25.4 	Commission pursuant to proposals or applications filed with the Public Utilities 
25.5 	Commission before April 1, 2007, or to any power purchase agreement related to a facility 
25.6 	described in this clause. The exclusion of pending proposals and applications from the 
25.7 	prohibitions in subdivision 3 does not limit the applicability of any other law and is not an 
25.8 	expression of legislative intent regarding whether any pending proposal or application 
25.9 	should be approved or denied;
25.10 	(2) a contract not subject to commission approval that was entered into prior to 
25.11 	April 1, 2007, to purchase power from a new large energy facility that was approved by 
25.12 	a comparable authority in another state prior to that date, for which municipal or public 
25.13 	power district bonds have been issued, and on which construction has begun; or
25.14 	(3) a new large energy facility or a power purchase agreement between a Minnesota 
25.15 	utility and a new large energy facility located outside Minnesota that the Public 
25.16 	Utilities Commission has determined is essential to ensure the long-term reliability of 
25.17 	Minnesota's electric system, to allow electric service for increased industrial demand, 
25.18 	or to avoid placing a substantial financial burden on Minnesota ratepayers. An order 
25.19 	of the commission granting an exemption under this clause is stayed until the June 1 
25.20 	following the next regular or annual session of the legislature that begins after the date of 
25.21 	the commission's final order; or
25.22 	(4) a new large energy facility with a combined electric generating capacity of less 
25.23 	than 100 megawatts, which did not require a Minnesota certificate of need, which received 
25.24 	an air pollution control permit to construct from an adjoining state before January 1, 2008, 
25.25 	and on which construction began before July 1, 2008, or to any power purchase agreement 
25.26 	related to a facility described in this clause.

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

25.28 	Sec. 31. CONSERVATION IMPROVEMENT PROGRAM EXEMPTION; 
25.29 	TEMPORARY COMMISSIONER AUTHORITY.
 25.30 	The commissioner of commerce may, if the commissioner determines it is in the 
25.31 	public interest, grant an initial exemption to a gas customer petitioning for an exemption 
25.32 	under Minnesota Statutes, section 216B.241, subdivision 1a, paragraph (b) or (c), effective 
25.33 	sooner than otherwise provided under Minnesota Statutes, section 216B.241, subdivision 
25.34 	1a. This section applies only to customers of a gas utility that on May 1, 2011, was subject 
25.35 	to a Public Utilities Commission order temporarily exempting certain of its customers 
26.1 	from the imposition of conservation improvement program charges associated with 
26.2 	obligations imposed on the utility under Minnesota Statutes, section 216B.241. This 
26.3 	section expires December 31, 2011.

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

26.5 	Sec. 32. TEMPORARY PROHIBITION ON PUBLIC UTILITIES 
26.6 	COMMISSION APPROVAL OF CERTAIN RENEWABLE DEVELOPMENT 
26.7 	ACCOUNT EXPENDITURES.
 26.8 	(a) Notwithstanding Minnesota Statutes, section 116C.779, the Public Utilities 
26.9 	Commission may not approve expenditures from the renewable development account 
26.10 	for which commission approval is required by Minnesota Statutes, section 116C.779, 
26.11 	subdivision 1, during the period between the effective date of this section and July 1, 2012.
26.12 	(b) This section does not prohibit commission approval for rate recovery rider filings 
26.13 	for expenditures from the renewable development account.
26.14 	(c) This section does not prohibit expenditures for projects approved by the 
26.15 	commission before the effective date of this section.

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

26.17 	Sec. 33. MELROSE PUBLIC UTILITIES COMMISSION MEMBERSHIP.
 26.18 	Notwithstanding Minnesota Statutes, section 412.341, subdivision 1, the city 
26.19 	of Melrose may by ordinance increase the membership of the city's public utilities 
26.20 	commission to a maximum of seven members. The ordinance may also provide for the 
26.21 	terms of the commission members and the terms must be staggered, provide that residency 
26.22 	within the city is not a qualification for serving on the commission, and permit one or 
26.23 	more members of the city council to serve on the commission.

26.24 	EFFECTIVE DATE; LOCAL APPROVAL. This section is effective the day after 
26.25 	the governing body of the city of Melrose and its chief clerical officer complete in timely 
26.26 	fashion their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

26.27 	Sec. 34.  REPEALER.
 26.28 	(a) Minnesota Statutes 2010, sections 216A.085; 216B.242; 216C.052, subdivisions 
26.29 	1, 2, and 4; and 216F.09, are repealed.
26.30 	(b) The repeal of section 216B.242 does not affect an inverted rate pilot program 
26.31 	ordered by the Public Utilities Commission under that section before May 1, 2011.