1.1 	A bill for an act
1.2 	relating to energy; modifying the guaranteed energy-savings program; 
1.3 	increasing the size limit of natural gas utilities not subject to rate regulation; 
1.4 	allowing performance-based, multiyear rate plans; allowing rate recovery for 
1.5 	natural gas extension projects; modifying the renewable energy standard; 
1.6 	modifying certificate of need exemptions; modifying energy auditor standards; 
1.7 	making changes to the energy improvements program for local governments; 
1.8 	modifying eligibility for various siting requirements; providing for competitive 
1.9 	rate schedules for energy-intensive trade-exposed electric utility customers; 
1.10 	modifying and adding definitions;amending Minnesota Statutes 2014, sections 
1.11 	16C.144; 216B.02, by adding subdivisions; 216B.16, subdivisions 6, 7b, 12, 19; 
1.12 	216B.1691, subdivision 2a; 216B.2421, subdivision 2; 216B.2425; 216C.31; 
1.13 	216C.435, subdivisions 3a, 4, 5, 10, by adding a subdivision; 216C.436, 
1.14 	subdivisions 1, 2; 216E.01, subdivision 5; 216E.021; 216E.03, subdivision 3; 
1.15 	216E.05, subdivision 2; 453A.02, subdivision 5; proposing coding for new law 
1.16 	in Minnesota Statutes, chapters 216B; 216E; repealing Minnesota Statutes 2014, 
1.17 	section 216C.436, subdivision 6.
1.18 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.19 	Section 1. Minnesota Statutes 2014, section 16C.144, is amended to read:
1.20 	16C.144 GUARANTEED ENERGY-SAVINGS PROGRAM.
1.21 		Subdivision 1.Definitions. The following definitions apply to this section.
1.22 	(a) "Utility" means electricity, natural gas, or other energy resource, water, and 
1.23 	wastewater.
1.24 	(b) "Utility cost savings" means the difference between the utility costs after 
1.25 	installation of the utility cost-savings measures pursuant to the guaranteed energy-savings 
1.26 	agreement and the baseline utility costs after baseline adjustments have been made.
1.27 	(c) "Baseline" means the preagreement utilities, operations, and maintenance costs.
1.28 	(d) "Utility cost-savings measure" means a measure that produces utility cost savings 
1.29 	or operation and maintenance cost savings.
2.1 	(e) "Operation and maintenance cost savings" means a measurable difference 
2.2 	between operation and maintenance costs after the installation of the utility cost-savings 
2.3 	measures pursuant to the guaranteed energy-savings agreement and the baseline operation 
2.4 	and maintenance costs after inflation adjustments have been made. Operation and 
2.5 	maintenance costs savings shall not include savings from in-house staff labor.
2.6 	(f) "Guaranteed energy-savings agreement" means an agreement for the installation 
2.7 	of one or more utility cost-savings measures that includes the qualified provider's 
2.8 	guarantee as required under subdivision 2.
2.9 	(g) "Baseline adjustments" means adjusting the utility cost-savings baselines 
2.10 	annually for changes in the following variables:
2.11 	(1) utility rates;
2.12 	(2) number of days in the utility billing cycle;
2.13 	(3) square footage of the facility;
2.14 	(4) operational schedule of the facility;
2.15 	(5) facility temperature set points;
2.16 	(6) weather; and
2.17 	(7) amount of equipment or lighting utilized in the facility.
2.18 	(h) "Inflation adjustment" means adjusting the operation and maintenance 
2.19 	cost-savings baseline annually for inflation.
2.20 	(i) "Lease purchase agreement Project financing" means an agreement any type of 
2.21 	financing including but not limited to lease, lease purchase, installment agreements, or 
2.22 	bonds for those other than the state who have bonding authority, obligating the state to 
2.23 	make regular lease payments to satisfy the lease costs of the utility cost-savings measures 
2.24 	until the final payment, after which time the utility cost-savings measures become the 
2.25 	sole property of the state of Minnesota.
2.26 	(j) "Qualified provider" means a person or business experienced in the design, 
2.27 	implementation, and installation of utility cost-savings measures.
2.28 	(k) "Engineering report" means a report prepared by a professional engineer licensed 
2.29 	by the state of Minnesota summarizing estimates of all costs of installations, modifications, 
2.30 	or remodeling, including costs of design, engineering, installation, maintenance, repairs, 
2.31 	and estimates of the amounts by which utility and operation and maintenance costs will be 
2.32 	reduced.
2.33 	(l) "Capital cost avoidance" means money expended by a state agency to pay for 
2.34 	utility cost-savings measures with a guaranteed savings agreement so long as the measures 
2.35 	that are being implemented to achieve the utility, operation, and maintenance cost savings 
2.36 	are a significant portion of an overall project as determined by the commissioner.
3.1 	(m) "Guaranteed energy-savings program guidelines" means policies, procedures, 
3.2 	and requirements of guaranteed savings agreements established by the Department of 
3.3 	Administration.
3.4 		Subd. 2.Guaranteed energy-savings agreement. The commissioner may enter 
3.5 	into a guaranteed energy-savings agreement with a qualified provider if:
3.6 	(1) the qualified provider is selected through a competitive process in accordance 
3.7 	with the guaranteed energy-savings program guidelines within the Department of 
3.8 	Administration;
3.9 	(2) the qualified provider agrees to submit an engineering report prior to the 
3.10 	execution of the guaranteed energy-savings agreement. The cost of the engineering report 
3.11 	may be considered as part of the implementation costs if the commissioner enters into a 
3.12 	guaranteed energy-savings agreement with the provider;
3.13 	(3) the term of the guaranteed energy-savings agreement shall not exceed 25 years 
3.14 	from the date of final installation;
3.15 	(4) the commissioner finds that the amount it would spend, less the amount 
3.16 	contributed for capital cost avoidance, on the utility cost-savings measures recommended 
3.17 	in the engineering report will not exceed the amount to be saved in utility operation and 
3.18 	maintenance costs over 25 years from the date of implementation of utility cost-savings 
3.19 	measures;
3.20 	(5) the qualified provider provides a written guarantee that the annual utility, 
3.21 	operation, and maintenance cost savings during the term of the guaranteed energy-savings 
3.22 	agreement will meet or exceed the annual payments due under a lease purchase agreement 
3.23 	the project financing. The qualified provider shall reimburse the state for any shortfall of 
3.24 	guaranteed utility, operation, and maintenance cost savings; and
3.25 	(6) the qualified provider gives a sufficient bond in accordance with section 
3.26 	574.26 to the commissioner for the faithful implementation and installation of the utility 
3.27 	cost-savings measures.
3.28 		Subd. 3.Lease purchase agreement Project financing. The commissioner 
3.29 	may enter into a lease purchase agreement project financing with any party for the 
3.30 	implementation of utility cost-savings measures in accordance with the guaranteed 
3.31 	energy-savings agreement. The implementation costs of the utility cost-savings measures 
3.32 	recommended in the engineering report shall not exceed the amount to be saved in utility 
3.33 	and operation and maintenance costs over the term of the lease purchase agreement. The 
3.34 	term of the lease purchase agreement project financing shall not exceed 25 years from 
3.35 	the date of final installation. The lease project financing is assignable in accordance with 
3.36 	terms approved by the commissioner of management and budget.
4.1 		Subd. 4.Use of capital cost avoidance. The affected state agency may contribute 
4.2 	funds for capital cost avoidance for guaranteed energy-savings agreements. Use of capital 
4.3 	cost avoidance is subject to the guaranteed energy-savings program guidelines within the 
4.4 	Department of Administration.
4.5 		Subd. 5.Independent report.  For each guaranteed energy-savings agreement 
4.6 	entered into, the commissioner of administration shall contract with an independent third 
4.7 	party to evaluate the cost-effectiveness of each utility cost-savings measure implemented 
4.8 	to ensure that such measures were the least-cost measures available. For the purposes of 
4.9 	this section, "independent third party" means an entity not affiliated with the qualified 
4.10 	provider, that is not involved in creating or providing conservation project services to that 
4.11 	provider, and that has expertise (or access to expertise) in energy-savings practices.

4.12 	Sec. 2. Minnesota Statutes 2014, section 216B.02, is amended by adding a subdivision 
4.13 	to read:
4.14 		Subd. 3a.Propane. "Propane" means a gas made of primarily propane and butane, 
4.15 	and stored in liquid form in pressurized tanks.

4.16 	Sec. 3. Minnesota Statutes 2014, section 216B.02, is amended by adding a subdivision 
4.17 	to read:
4.18 		Subd. 3b.Propane storage facility. "Propane storage facility" means a facility 
4.19 	designed to store or capable of storing propane in liquid form in pressurized tanks.

4.20 	Sec. 4. Minnesota Statutes 2014, section 216B.02, is amended by adding a subdivision 
4.21 	to read:
4.22 		Subd. 6b.Synthetic gas. "Synthetic gas" means flammable gas created from (1) 
4.23 	gaseous, liquid, or solid hydrocarbons, or (2) other organic or inorganic matter. Synthetic 
4.24 	gas includes hydrogen or methane produced through processing, but does not include 
4.25 	propane.

4.26 	Sec. 5. Minnesota Statutes 2014, section 216B.02, is amended by adding a subdivision 
4.27 	to read:
4.28 		Subd. 11.Repowering. "Repowering" means the modification of a large wind 
4.29 	energy conversion system or a solar-powered large energy facility to increase efficiency, 
4.30 	replace a large wind energy conversion system, or, if the Midcontinent Independent 
4.31 	System Operator has provided a signed generator interconnection agreement that reflects 
5.1 	the expected net power increase, an increase to the nameplate capacity of the wind energy 
5.2 	conversion system.

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

5.4 	Sec. 6. Minnesota Statutes 2014, section 216B.16, subdivision 6, is amended to read:
5.5 		Subd. 6.Factors considered, generally. The commission, in the exercise of its 
5.6 	powers under this chapter to determine just and reasonable rates for public utilities, shall 
5.7 	give due consideration to the public need for adequate, efficient, and reasonable service 
5.8 	and to the need of the public utility for revenue sufficient to enable it to meet the cost of 
5.9 	furnishing the service, including adequate provision for depreciation of its utility property 
5.10 	used and useful in rendering service to the public, and to earn a fair and reasonable return 
5.11 	upon the investment in such property. In determining the rate base upon which the utility 
5.12 	is to be allowed to earn a fair rate of return, the commission shall give due consideration to 
5.13 	evidence of the cost of the property when first devoted to public use, to prudent acquisition 
5.14 	cost to the public utility less appropriate depreciation on each, to construction work in 
5.15 	progress, to offsets in the nature of capital provided by sources other than the investors, 
5.16 	and to other expenses of a capital nature. For purposes of determining rate base, the 
5.17 	commission shall consider the original cost of utility property included in the base and 
5.18 	shall make no allowance for its estimated current replacement value. If the commission 
5.19 	orders a generating facility to terminate its operations before the end of the facility's 
5.20 	physical life in order to comply with a specific state or federal energy statute or policy, 
5.21 	the commission may allow the public utility to recover any positive net book value of the 
5.22 	facility as determined by the commission.

5.23 	Sec. 7. Minnesota Statutes 2014, section 216B.16, subdivision 7b, is amended to read:
5.24 		Subd. 7b.Transmission cost adjustment. (a) Notwithstanding any other provision 
5.25 	of this chapter, the commission may approve a tariff mechanism for the automatic annual 
5.26 	adjustment of charges for the Minnesota jurisdictional costs net of associated revenues of:
5.27 	(i) new transmission facilities that have been separately filed and reviewed and 
5.28 	approved by the commission under section 216B.243 or new transmission or distribution 
5.29 	facilities that are certified as a priority project or deemed to be a priority transmission 
5.30 	project under section 216B.2425;
5.31 	(ii) new transmission facilities approved by the regulatory commission of the state 
5.32 	in which the new transmission facilities are to be constructed, to the extent approval 
5.33 	is required by the laws of that state, and determined by the Midcontinent Independent 
5.34 	System Operator to benefit the utility or integrated transmission system; and
6.1 	(iii) charges incurred by a utility under a federally approved tariff that accrue 
6.2 	from other transmission owners' regionally planned transmission projects that have been 
6.3 	determined by the Midcontinent Independent System Operator to benefit the utility or 
6.4 	integrated transmission system.
6.5 	(b) Upon filing by a public utility or utilities providing transmission service, the 
6.6 	commission may approve, reject, or modify, after notice and comment, a tariff that:
6.7 	(1) allows the utility to recover on a timely basis the costs net of revenues of 
6.8 	facilities approved under section 216B.243 or certified or deemed to be certified under 
6.9 	section 216B.2425 or exempt from the requirements of section 216B.243;
6.10 	(2) allows the utility to recover charges incurred under a federally approved tariff that 
6.11 	accrue from other transmission owners' regionally planned transmission projects that have 
6.12 	been determined by the Midcontinent Independent System Operator to benefit the utility 
6.13 	or integrated transmission system. These charges must be reduced or offset by revenues 
6.14 	received by the utility and by amounts the utility charges to other regional transmission 
6.15 	owners, to the extent those revenues and charges have not been otherwise offset;
6.16 	(3) allows the utility to recover on a timely basis the costs net of revenues of facilities 
6.17 	approved by the regulatory commission of the state in which the new transmission 
6.18 	facilities are to be constructed and determined by the Midcontinent Independent System 
6.19 	Operator to benefit the utility or integrated transmission system;
6.20 	(4) allows the utility to recover costs associated with distribution planning required 
6.21 	under section 216B.2425;
6.22 	(5) allows the utility to recover costs associated with investments in distribution 
6.23 	facilities to modernize the utility's grid that have been certified by the commission under 
6.24 	section 216B.2425;
6.25 	(6) allows a return on investment at the level approved in the utility's last general 
6.26 	rate case, unless a different return is found to be consistent with the public interest;
6.27 	(5) (7) provides a current return on construction work in progress, provided that 
6.28 	recovery from Minnesota retail customers for the allowance for funds used during 
6.29 	construction is not sought through any other mechanism;
6.30 	(6) (8) allows for recovery of other expenses if shown to promote a least-cost project 
6.31 	option or is otherwise in the public interest;
6.32 	(7) (9) allocates project costs appropriately between wholesale and retail customers;
6.33 	(8) (10) provides a mechanism for recovery above cost, if necessary to improve the 
6.34 	overall economics of the project or projects or is otherwise in the public interest; and
6.35 	(9) (11) terminates recovery once costs have been fully recovered or have otherwise 
6.36 	been reflected in the utility's general rates.
7.1 	(c) A public utility may file annual rate adjustments to be applied to customer bills 
7.2 	paid under the tariff approved in paragraph (b). In its filing, the public utility shall provide:
7.3 	(1) a description of and context for the facilities included for recovery;
7.4 	(2) a schedule for implementation of applicable projects;
7.5 	(3) the utility's costs for these projects;
7.6 	(4) a description of the utility's efforts to ensure the lowest costs to ratepayers for 
7.7 	the project; and
7.8 	(5) calculations to establish that the rate adjustment is consistent with the terms 
7.9 	of the tariff established in paragraph (b).
7.10 	(d) Upon receiving a filing for a rate adjustment pursuant to the tariff established in 
7.11 	paragraph (b), the commission shall approve the annual rate adjustments provided that, 
7.12 	after notice and comment, the costs included for recovery through the tariff were or are 
7.13 	expected to be prudently incurred and achieve transmission system improvements at the 
7.14 	lowest feasible and prudent cost to ratepayers.

7.15 	Sec. 8. Minnesota Statutes 2014, section 216B.16, subdivision 12, is amended to read:
7.16 		Subd. 12.Exemption for small gas utility franchise. (a) A municipality may file 
7.17 	with the commission a resolution of its governing body requesting exemption from the 
7.18 	provisions of this section for a public utility that is under a franchise with the municipality 
7.19 	to supply natural, manufactured, or mixed gas and that serves 650 or fewer customers in 
7.20 	the municipality as long as the public utility serves no more than a total of 2,000 5,000 
7.21 	customers.
7.22 	(b) The commission shall grant an exemption from this section for that portion of 
7.23 	a public utility's business that is requested by each municipality it serves. Furthermore, 
7.24 	the commission shall also grant the public utility an exemption from this section for any 
7.25 	service provided outside of a municipality's border that is considered by the commission 
7.26 	to be incidental. The public utility shall file with the commission and the department 
7.27 	all initial and subsequent changes in rates, tariffs, and contracts for service outside the 
7.28 	municipality at least 30 days in advance of implementation.
7.29 	(c) However, the commission shall require the utility to adopt the commission's 
7.30 	policies and procedures governing disconnection during cold weather. The utility shall 
7.31 	annually submit a copy of its municipally approved rates to the commission.
7.32 	(d) In all cases covered by this subdivision in which an exemption for service outside 
7.33 	of a municipality is granted, the commission may initiate an investigation under section 
7.34 	216B.17, on its own motion or upon complaint from a customer.
8.1 	(e) If a municipality files with the commission a resolution of its governing body 
8.2 	rescinding the request for exemption, the commission shall regulate the public utility's 
8.3 	business in that municipality under this section.

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

8.5 	Sec. 9. Minnesota Statutes 2014, section 216B.16, subdivision 19, is amended to read:
8.6 		Subd. 19.Multiyear rate plan. (a) A public utility may propose, and the 
8.7 	commission may approve, approve as modified, or reject, a multiyear rate plan as provided 
8.8 	in this subdivision. The term "multiyear rate plan" refers to a plan establishing the rates the 
8.9 	utility may charge for each year of the specified period of years, which cannot exceed three 
8.10 	five years, to be covered by the plan. A utility proposing a multiyear rate plan shall provide 
8.11 	a general description of the utility's major planned investments over the plan period. 
8.12 	The commission may also require the utility to provide a set of reasonable performance 
8.13 	measures and incentives that are quantifiable, verifiable, and consistent with state energy 
8.14 	policies. The commission may allow the utility to adjust recovery of its cost of capital or 
8.15 	other costs in a reasonable manner within the plan period. The utility may propose:
8.16 	(1) recovery of the utility's forecasted rate base, based on a formula, a budget forecast, 
8.17 	or a fixed escalation rate, individually or in combination. The forecasted rate base must 
8.18 	include the utility's planned capital investments and investment-related costs, including 
8.19 	income tax impacts, depreciation and property taxes, as well as forecasted capacity-related 
8.20 	costs from purchased power agreements that are not recovered through subdivision 7;
8.21 	(2) recovery of operations and maintenance expenses, based on an electricity-related 
8.22 	price index or other formula;
8.23 	(3) tariffs that expand the products and services available to customers, including, 
8.24 	but not limited to, an affordability rate for low-income residential customers; and
8.25 	(4) adjustments to the rates approved under the multiyear plan for rate changes 
8.26 	that the commission determines to be just and reasonable, including, but not limited 
8.27 	to, changes in the utility's cost of operating its nuclear facilities, or other significant 
8.28 	investments not addressed in the plan.
8.29 	(b) A utility that has filed a petition with the commission to approve a multiyear 
8.30 	rate plan may request to be allowed to implement interim rates for the first and second 
8.31 	years of the multiyear plan. If the commission approves the request, interim rates shall be 
8.32 	implemented in the same manner as allowed under subdivision 3.
8.33 	(c) The commission may approve a multiyear rate plan only if it finds that the plan 
8.34 	establishes just and reasonable rates for the utility, applying the factors described in 
9.1 	subdivision 6. Consistent with subdivision 4, the burden of proof to demonstrate that the 
9.2 	multiyear rate plan is just and reasonable is on the public utility proposing the plan.
9.3 	(b) (d) Rates charged under the multiyear rate plan must be based only upon the 
9.4 	utility's reasonable and prudent costs of service over the term of the plan, as determined 
9.5 	by the commission, provided that the costs are not being recovered elsewhere in rates. 
9.6 	Rate adjustments authorized under subdivisions 6b and 7 may continue outside of a plan 
9.7 	authorized under this subdivision.
9.8 	(c) (e) The commission may, by order, establish terms, conditions, and procedures 
9.9 	for a multiyear rate plan necessary to implement this section and ensure that rates remain 
9.10 	just and reasonable during the course of the plan, including terms and procedures for rate 
9.11 	adjustment. At any time prior to conclusion of a multiyear rate plan, the commission, 
9.12 	upon its own motion or upon petition of any party, has the discretion to examine the 
9.13 	reasonableness of the utility's rates under the plan, and adjust rates as necessary.
9.14 	(d) (f) In reviewing a multiyear rate plan proposed in a general rate case under 
9.15 	this section, the commission may extend the time requirements for issuance of a final 
9.16 	determination prescribed in this section by an additional 90 days beyond its existing 
9.17 	authority under subdivision 2, paragraph (f).
9.18 	(e) (g) A utility may not file a multiyear rate plan that would establish rates under the 
9.19 	terms of the plan until after May 31, 2012.
9.20 	(h) The commission may initiate a proceeding to determine a set of performance 
9.21 	measures that can be used to assess a utility operating under a multiyear rate plan.

9.22 	Sec. 10. [216B.1615] ELECTRIC VEHICLE PROMOTION PROGRAM.
9.23 		Subdivision 1.Definitions. (a) For the purposes of this section and section 
9.24 	216B.1616, the terms defined in this subdivision have the meanings given them.
9.25 	(b) "Electric vehicle charging station" means a public or private parking space 
9.26 	that is served by battery charging station equipment that has as its primary purpose the 
9.27 	transfer of electric energy by conductive or inductive means to a battery or other energy 
9.28 	storage device in an electric vehicle.
9.29 	(c) "Electric vehicle infrastructure" means structures, machinery, and equipment 
9.30 	necessary and integral to support an electric vehicle, including electric vehicle charging 
9.31 	stations and battery exchange stations.
9.32 	(d) "Public utility" has the meaning given in section 216B.02, subdivision 4.
9.33 	(e) "Electric vehicle" or "plug-in vehicle" means an electric drive motor vehicle that 
9.34 	draws propulsion using a traction battery that has at least five kilowatt hours (kWh) of 
10.1 	capacity, uses an external source of energy to recharge the battery, and has a gross vehicle 
10.2 	weight rating of up to 14,000 pounds.
10.3 		Subd. 2.Program. (a) By February 1, 2016, each public utility serving a city of the 
10.4 	first class must file with the commission a program to promote the purchase of electric 
10.5 	vehicles by their customers and the construction of electric vehicle infrastructure.
10.6 	(b) The program may include, but is not limited to, the following elements:
10.7 	(1) educational resources for individuals, electric vehicle dealers, multifamily 
10.8 	housing developers and property management companies, and vehicle fleet managers; and
10.9 	(2) rebates for installing electric vehicle charging stations at residences or workplaces.
10.10 		Subd. 3.Program review and implementation. The commissioner of commerce 
10.11 	shall review the program plans submitted under this section. The commissioner shall 
10.12 	approve, modify, or reject the plan based on the plan's effectiveness in promoting electric 
10.13 	vehicles among utility customers, and the extent to which the plan will result in the 
10.14 	construction of electric vehicle infrastructure. If the commissioner rejects a utility's plan, 
10.15 	the utility must submit a new plan for commissioner review within 75 days of the notice of 
10.16 	rejection. The utility shall begin implementing the plan within 90 days of commissioner 
10.17 	approval.
10.18 		Subd. 4.Cost recovery. Notwithstanding section 216B.16, subdivision 8, paragraph 
10.19 	(a), clause (3), the commission shall approve recovery of costs for expenses incurred by a 
10.20 	public utility to provide public advertisement as part of a promotion program and the costs 
10.21 	reasonably incurred to implement and administer the program in subdivision 2.
10.22 		Subd. 5.Reporting. Beginning one year after implementing a program approved by 
10.23 	the commissioner, each public utility implementing a plan under this section shall report 
10.24 	annually to the commissioner on its activities to promote electric vehicle usage and the 
10.25 	outcomes of those efforts and the potential to utilize plug-in vehicles as dynamic demand 
10.26 	response resources or to develop vehicle-to-grid technology.

10.27 	Sec. 11. [216B.1638] RECOVERY OF NATURAL GAS EXTENSION PROJECT 
10.28 	COSTS.
10.29 		Subdivision 1.Definitions. (a) For the purposes of this section, the terms defined in 
10.30 	this subdivision have the meanings given them.
10.31 	(b) "Contribution in aid of construction" means a monetary contribution, paid by 
10.32 	a developer or local unit of government to a utility providing natural gas service to a 
10.33 	community receiving that service as the result of a natural gas extension project, that 
10.34 	reduces or offsets the difference between the total revenue requirement of the project and 
10.35 	the revenue generated from the customers served by the project.
11.1 	(c) "Developer" means a developer of the project or a person that owns or will own 
11.2 	the property served by the project.
11.3 	(d) "Local unit of government" means a city, county, township, commission, district, 
11.4 	authority, or other political subdivision or instrumentality of this state.
11.5 	(e) "Natural gas extension project" or "project" means the construction of new 
11.6 	infrastructure or upgrades to existing natural gas facilities necessary to serve currently 
11.7 	unserved or inadequately served areas.
11.8 	(f) "Revenue deficiency" means the deficiency in funds that results when projected 
11.9 	revenues from customers receiving natural gas service as the result of a natural gas 
11.10 	extension project, plus any contributions in aid of construction paid by these customers, 
11.11 	fall short of the total revenue requirement of the natural gas extension project.
11.12 	(g) "Total revenue requirement" means the total cost of extending and maintaining 
11.13 	service to a currently unserved or inadequately served area.
11.14 	(h) "Unserved or inadequately served area" means an area in this state lacking 
11.15 	adequate natural gas pipeline infrastructure to meet the demand of existing or potential 
11.16 	end-use customers.
11.17 		Subd. 2.Filing. (a) A public utility may petition the commission outside of a 
11.18 	general rate case for a rider that shall include all of the utility's customers, including 
11.19 	transport customers, to recover the revenue deficiency from a natural gas extension project.
11.20 	(b) The petition shall include:
11.21 	(1) a description of the natural gas extension project, including the number and 
11.22 	location of new customers to be served and the distance over which natural gas will be 
11.23 	distributed to serve the unserved or inadequately served area;
11.24 	(2) the project's construction schedule;
11.25 	(3) the proposed project budget;
11.26 	(4) the amount of any contributions in aid of construction;
11.27 	(5) a description of efforts made by the public utility to offset the revenue deficiency 
11.28 	through contributions in aid to construction;
11.29 	(6) the proposed method and amount of recovery by customer class and whether 
11.30 	the utility is proposing that the rider be a flat fee, a volumetric charge, or another form of 
11.31 	recovery;
11.32 	(7) how recovery of the revenue deficiency will be allocated between industrial, 
11.33 	commercial, residential, and transport customers;
11.34 	(8) the proposed termination date of the rider to recover the revenue deficiency; and
11.35 	(9) a description of benefits to the public utility's existing natural gas customers that 
11.36 	will accrue from the natural gas extension project.
12.1 		Subd. 3.Review; approval. (a) The commission shall allow opportunity for 
12.2 	comment on the petition.
12.3 	(b) The commission may approve a public utility's petition for a rider to recover the 
12.4 	costs of a natural gas extension project if it determines that:
12.5 	(1) the project is designed to extend natural gas service to an unserved or 
12.6 	inadequately served area; and
12.7 	(2) project costs are reasonable and prudently incurred.
12.8 	(c) The commission must not approve a rider under this section that allows a utility 
12.9 	to recover more than 33 percent of the costs of a natural gas extension project.
12.10 	(d) The revenue deficiency from a natural gas extension project recoverable through 
12.11 	a rider under this section must include the currently authorized rate of return, incremental 
12.12 	income taxes, incremental property taxes, incremental depreciation expenses, and any 
12.13 	incremental operation and maintenance costs.
12.14 		Subd. 4.Commission authority; order. The commission may issue orders 
12.15 	necessary to implement and administer this section.
12.16 		Subd. 5.Implementation. Nothing in this section commits a public utility to 
12.17 	implement a project approved by the commission. The public utility seeking to provide 
12.18 	natural gas service shall notify the commission whether it intends to proceed with the 
12.19 	project as approved by the commission.
12.20 		Subd. 6.Evaluation and report. By January 15, 2017, and every three years 
12.21 	thereafter, the commission shall report to the chairs and ranking minority members of the 
12.22 	senate and house of representatives committees having jurisdiction over energy:
12.23 	(1) the number of public utilities and projects proposed and approved under this 
12.24 	section;
12.25 	(2) the total cost of each project;
12.26 	(3) rate impacts of the cost recovery mechanism; and
12.27 	(4) an assessment of the effectiveness of the cost recovery mechanism in realizing 
12.28 	increased natural gas service to unserved or inadequately served areas from natural gas 
12.29 	extension projects.

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

12.31 	Sec. 12. Minnesota Statutes 2014, section 216B.1691, subdivision 2a, is amended to 
12.32 	read:
12.33 		Subd. 2a.Eligible energy technology standard. (a) Except as provided in 
12.34 	paragraph (b), each electric utility shall generate or procure sufficient electricity generated 
12.35 	by an eligible energy technology to provide its retail customers in Minnesota, or the 
13.1 	retail customers of a distribution utility to which the electric utility provides wholesale 
13.2 	electric service, so that at least the following standard percentages of the electric utility's 
13.3 	total retail electric sales to retail customers in Minnesota are generated by eligible energy 
13.4 	technologies by the end of the year indicated:

13.5	(1)
	2012
	12 percent
	
13.6	(2)
	2016
	17 percent
	
13.7	(3)
	2020
	20 percent
	
13.8	(4)
	2025
	25 percent.
	
13.9 	(b) An electric utility that owned a nuclear generating facility as of January 1, 2007, 
13.10 	must meet the requirements of this paragraph rather than paragraph (a). An electric utility 
13.11 	subject to this paragraph must generate or procure sufficient electricity generated by 
13.12 	an eligible energy technology to provide its retail customers in Minnesota or the retail 
13.13 	customer of a distribution utility to which the electric utility provides wholesale electric 
13.14 	service so that at least the following percentages of the electric utility's total retail electric 
13.15 	sales to retail customers in Minnesota are generated by eligible energy technologies by the 
13.16 	end of the year indicated:

13.17	(1)
	2010
	15 percent
	
13.18	(2)
	2012
	18 percent
	
13.19	(3)
	2016
	25 percent
	
13.20	(4)
	2020
	30 percent.
	
13.21 	Of the 30 percent in 2020, at least 25 percent must be generated by solar energy 
13.22 	or wind energy conversion systems and the remaining five percent by other eligible 
13.23 	energy technology. Of the 25 percent that must be generated by wind or solar, no more 
13.24 	than one percent may be solar generated and the remaining 24 percent or greater must 
13.25 	be wind generated.

13.26 	Sec. 13. Minnesota Statutes 2014, section 216B.2421, subdivision 2, is amended to read:
13.27 		Subd. 2.Large energy facility. "Large energy facility" means:
13.28 	(1) any electric power generating plant or combination of plants at a single site with 
13.29 	a combined capacity of 50,000 kilowatts or more and transmission lines directly associated 
13.30 	with the plant that are necessary to interconnect the plant to the transmission system;
13.31 	(2) any high-voltage transmission line with a capacity of 200 kilovolts or more and 
13.32 	greater than 1,500 feet in length;
13.33 	(3) any high-voltage transmission line with a capacity of 100 kilovolts or more with 
13.34 	more than ten miles of its length in Minnesota or that crosses a state line;
14.1 	(4) any pipeline greater than six inches in diameter and having more than 50 miles of 
14.2 	its length in Minnesota used for the transportation of coal, crude petroleum or petroleum 
14.3 	fuels or oil, or their derivatives;
14.4 	(5) any pipeline for transporting natural or synthetic gas at pressures in excess of 
14.5 	200 pounds per square inch with more than 50 miles of its length in Minnesota;
14.6 	(6) any facility designed for or capable of storing on a single site more than 100,000 
14.7 	gallons of liquefied natural gas or synthetic gas, excluding propane storage facilities;
14.8 	(7) any underground gas storage facility requiring a permit pursuant to section 
14.9 	103I.681;
14.10 	(8) any nuclear fuel processing or nuclear waste storage or disposal facility; and
14.11 	(9) any facility intended to convert any material into any other combustible fuel and 
14.12 	having the capacity to process in excess of 75 tons of the material per hour.

14.13 	Sec. 14. Minnesota Statutes 2014, section 216B.2425, is amended to read:
14.14 	216B.2425 STATE TRANSMISSION AND DISTRIBUTION PLAN.
14.15 		Subdivision 1.List. The commission shall maintain a list of certified high-voltage 
14.16 	transmission line projects.
14.17 		Subd. 2.List development; transmission projects report. (a) By November 
14.18 	1 of each odd-numbered year, a transmission projects report must be submitted to the 
14.19 	commission by each utility, organization, or company that:
14.20 	(1) is a public utility, a municipal utility, a cooperative electric association, the 
14.21 	generation and transmission organization that serves each utility or association, or a 
14.22 	transmission company; and
14.23 	(2) owns or operates electric transmission lines in Minnesota, except a company or 
14.24 	organization that owns a transmission line that serves a single customer or interconnects a 
14.25 	single generating facility.
14.26 	(b) The report may be submitted jointly or individually to the commission.
14.27 	(c) The report must:
14.28 	(1) list specific present and reasonably foreseeable future inadequacies in the 
14.29 	transmission system in Minnesota;
14.30 	(2) identify alternative means of addressing each inadequacy listed;
14.31 	(3) identify general economic, environmental, and social issues associated with 
14.32 	each alternative; and
14.33 	(4) provide a summary of public input related to the list of inadequacies and the role 
14.34 	of local government officials and other interested persons in assisting to develop the list 
14.35 	and analyze alternatives.
15.1 	(d) To meet the requirements of this subdivision, reporting parties may rely on 
15.2 	available information and analysis developed by a regional transmission organization 
15.3 	or any subgroup of a regional transmission organization and may develop and include 
15.4 	additional information as necessary.
15.5 	(e) In addition to providing the information required under this subdivision, a utility 
15.6 	operating under a multiyear rate plan approved by the commission under section 216B.16, 
15.7 	subdivision 19, shall identify in its report investments that it considers necessary to 
15.8 	modernize the transmission and distribution system by enhancing reliability, improving 
15.9 	security against cyber and physical threats, and by increasing energy conservation 
15.10 	opportunities by facilitating communication between the utility and its customers 
15.11 	through the use of two-way meters, control technologies, energy storage and microgrids, 
15.12 	technologies to enable demand response, and other innovative technologies.
15.13 		Subd. 3.Commission approval. By June 1 of each even-numbered year, the 
15.14 	commission shall adopt a state transmission project list and shall certify, certify as 
15.15 	modified, or deny certification of the transmission and distribution projects proposed 
15.16 	under subdivision 2. The commission may only certify a project that is a high-voltage 
15.17 	transmission line as defined in section 216B.2421, subdivision 2, that the commission 
15.18 	finds is:
15.19 	(1) necessary to maintain or enhance the reliability of electric service to Minnesota 
15.20 	consumers;
15.21 	(2) needed, applying the criteria in section 216B.243, subdivision 3; and
15.22 	(3) in the public interest, taking into account electric energy system needs and 
15.23 	economic, environmental, and social interests affected by the project.
15.24 		Subd. 4.List; effect. Certification of a project as a priority electric transmission 
15.25 	project satisfies section 216B.243. A certified project on which construction has not begun 
15.26 	more than six years after being placed on the list, must be reapproved by the commission.
15.27 		Subd. 5.Transmission inventory. The Department of Commerce shall create, 
15.28 	maintain, and update annually an inventory of transmission lines in the state.
15.29 		Subd. 6.Exclusion. This section does not apply to any transmission line proposal 
15.30 	that has been approved by, or was pending before, a local unit of government, the 
15.31 	Environmental Quality Board, or the Public Utilities Commission on August 1, 2001.
15.32 		Subd. 7.Transmission needed to support renewable resources. (a) Each entity 
15.33 	subject to this section shall determine necessary transmission upgrades to support 
15.34 	development of renewable energy resources required to meet objectives under section 
15.35 	216B.1691 and shall include those upgrades in its report under subdivision 2.
15.36 	(b) MS 2008 [Expired]
16.1 		Subd. 8.Distribution study for distributed generation. Each entity subject to 
16.2 	this section that is operating under a multiyear rate plan approved under section 216B.16, 
16.3 	subdivision 19, shall conduct a distribution study to identify interconnection points on 
16.4 	its distribution system for small-scale distributed generation resources and shall identify 
16.5 	necessary distribution upgrades to support the continued development of distributed 
16.6 	generation resources, and shall include the study in its report required under subdivision 2.

16.7 	Sec. 15. [216B.247] LARGE SOLAR ENERGY SYSTEM OR LWECS 
16.8 	REPOWERING.
16.9 	(a) A large wind energy conversion system, as defined in section 216F.01, 
16.10 	subdivision 2, or a solar-powered large energy facility, as defined in section 216B.2421, 
16.11 	subdivision 2, engaging in a repowering project that will not result in the facility exceeding 
16.12 	the nameplate capacity under its most recent interconnection agreement is exempt from 
16.13 	the certificate of need requirements under section 216B.243.
16.14 	(b) A large wind energy conversion system, as defined in section 216F.01, 
16.15 	subdivision 2, or a solar-powered large energy facility, as defined in section 216B.2421, 
16.16 	subdivision 2, engaging in a repowering project that will result in the facility exceeding 
16.17 	the nameplate capacity under its most recent interconnection agreement is exempt from 
16.18 	the certificate of need requirements under section 216B.243, if the project has obtained a 
16.19 	signed generator interconnection agreement from the Midcontinent Independent System 
16.20 	Operator that reflects the net power increase.

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

16.22 	Sec. 16. Minnesota Statutes 2014, section 216C.31, is amended to read:
16.23 	216C.31 ENERGY AUDIT PROGRAMS.
16.24 	The commissioner shall develop state or approve programs of for energy audits of 
16.25 	residential and commercial buildings including the training and qualifications necessary 
16.26 	auditors for the auditing of residential and commercial buildings under the auspices of a 
16.27 	program created under section 216B.241, 216C.436, or any other energy program.

16.28 	Sec. 17. Minnesota Statutes 2014, section 216C.435, subdivision 3a, is amended to read:
16.29 		Subd. 3a.Cost-effective energy improvements. "Cost-effective energy 
16.30 	improvements" mean energy improvements that have been identified in an energy audit 
16.31 	or renewable energy system feasibility study as repaying their purchase and installation 
17.1 	costs in 20 years or less, based on the amount of future energy saved and estimated future 
17.2 	energy prices.

17.3 	Sec. 18. Minnesota Statutes 2014, section 216C.435, subdivision 4, is amended to read:
17.4 		Subd. 4.Energy audit. "Energy audit" means a formal evaluation of the energy 
17.5 	consumption of a building by a certified energy auditor, whose certification is approved by 
17.6 	the commissioner qualified professional, for the purpose of identifying appropriate energy 
17.7 	improvements that could be made to the building and including an estimate of the length 
17.8 	of time a specific energy improvement will take to repay its purchase and installation 
17.9 	costs, based on the amount of energy saved and estimated future energy prices.

17.10 	Sec. 19. Minnesota Statutes 2014, section 216C.435, subdivision 5, is amended to read:
17.11 		Subd. 5.Energy improvement. "Energy improvement" means:
17.12 	(1) any renovation or retrofitting of a building to improve energy efficiency that 
17.13 	is permanently affixed to the property and that results in a net reduction in energy 
17.14 	consumption without altering the principal source of energy;
17.15 	(2) permanent installation of new or upgraded electrical circuits and related 
17.16 	equipment to enable electrical vehicle charging; or
17.17 	(3) a renewable energy system attached to, installed within, or proximate to a 
17.18 	building that generates electrical or thermal energy from a renewable energy source; or
17.19 	(4) the installation of infrastructure, machinery, and appliances that will allow 
17.20 	natural gas to be used as a heating fuel on the premises of a building that was previously 
17.21 	not connected to a source of natural gas.

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

17.23 	Sec. 20. Minnesota Statutes 2014, section 216C.435, subdivision 10, is amended to read:
17.24 		Subd. 10.Renewable energy system feasibility study. "Renewable energy system 
17.25 	feasibility study" means a written study, conducted by a contractor qualified professional 
17.26 	trained to perform that analysis, for the purpose of determining the feasibility of installing 
17.27 	a renewable energy system in a building, including an estimate of the length of time 
17.28 	a specific renewable energy system will take to repay its purchase and installation 
17.29 	costs, based on the amount of energy saved and estimated future energy prices. For a 
17.30 	geothermal energy improvement, the feasibility study must calculate net savings in terms 
17.31 	of nongeothermal energy and costs.

18.1 	Sec. 21. Minnesota Statutes 2014, section 216C.435, is amended by adding a 
18.2 	subdivision to read:
18.3 		Subd. 13.Qualified professional. "Qualified professional" means an individual 
18.4 	who has successfully completed one of the programs developed or approved by the 
18.5 	commissioner, as referenced in section 216C.31.

18.6 	Sec. 22. Minnesota Statutes 2014, section 216C.436, subdivision 1, is amended to read:
18.7 		Subdivision 1.Program authority. An implementing entity may establish a 
18.8 	program to finance energy improvements to enable owners of qualifying real property 
18.9 	to pay for cost-effective energy improvements to the qualifying real property with the 
18.10 	net proceeds and interest earnings of revenue bonds authorized in this section. An 
18.11 	implementing entity may limit the number of qualifying real properties for which a 
18.12 	property owner may receive program financing.

18.13 	Sec. 23. Minnesota Statutes 2014, section 216C.436, subdivision 2, is amended to read:
18.14 		Subd. 2.Program requirements. A The implementing entity must ensure that a 
18.15 	financing program must:
18.16 	(1) impose imposes requirements and conditions on financing arrangements to 
18.17 	ensure timely repayment;
18.18 	(2) require requires an energy audit or renewable energy system feasibility study to 
18.19 	be conducted on the qualifying real property and reviewed by the implementing entity 
18.20 	prior to approval of the financing;
18.21 	(3) require requires the inspection of all installations and a performance verification 
18.22 	of at least ten percent of the energy improvements financed by the program;
18.23 	(4) does not prohibit the financing of all cost-effective energy improvements not 
18.24 	otherwise prohibited by this section;
18.25 	(5) require requires that all cost-effective energy improvements be made to a 
18.26 	qualifying real property are completed and operational prior to, or in conjunction with, 
18.27 	an applicant's repayment of financing for energy improvements for that property the first 
18.28 	scheduled assessment payment due to the taxing authority;
18.29 	(6) have has energy improvements financed by the program performed by licensed 
18.30 	contractors as required by chapter 326B or other law or ordinance;
18.31 	(7) require requires disclosures to borrowers by the implementing entity of the risks 
18.32 	involved in borrowing, including the risk of foreclosure forfeiture if a tax delinquency 
18.33 	results from a default;
18.34 	(8) provide provides financing only to those who demonstrate an ability to repay;
19.1 	(9) does not provide financing for a qualifying real property in which the owner is 
19.2 	not current on mortgage or real property tax payments;
19.3 	(10) require requires a petition to the implementing entity by all owners of the 
19.4 	qualifying real property requesting collections of repayments as a special assessment 
19.5 	under section 429.101;
19.6 	(11) provide provides that payments and assessments are not accelerated due to a 
19.7 	default and that a tax delinquency exists only for assessments not paid when due; and
19.8 	(12) require requires that liability for special assessments related to the financing 
19.9 	runs with the qualifying real property.

19.10 	Sec. 24. Minnesota Statutes 2014, section 216E.01, subdivision 5, is amended to read:
19.11 		Subd. 5.Large electric power generating plant. "Large electric power generating 
19.12 	plant" shall mean electric power generating equipment and associated facilities designed 
19.13 	for or capable of operation at a capacity of 50,000 kilowatts or more, or a solar energy 
19.14 	generating system designed for or capable of operation at a capacity of 10,000 kilowatts 
19.15 	or more.

19.16 	Sec. 25. Minnesota Statutes 2014, section 216E.021, is amended to read:
19.17 	216E.021 SOLAR ENERGY SYSTEM SIZE DETERMINATION.
19.18 	(a) This section must be used to determine whether a combination of solar energy 
19.19 	generating systems meets the definition of large electric power generating plant and is 
19.20 	subject to the commission's siting authority jurisdiction under this chapter. The alternating 
19.21 	current nameplate capacity of one solar energy generating system must be combined with 
19.22 	the alternating current nameplate capacity of any other solar energy generating system that:
19.23 	(1) is constructed within the same 12-month period as the solar energy generating 
19.24 	system; and
19.25 	(2) exhibits characteristics of being a single development, including but not limited 
19.26 	to ownership structure, an umbrella sales arrangement, shared interconnection, revenue 
19.27 	sharing arrangements, and common debt or equity financing.
19.28 	(b) An application to a county or municipality for a permit to construct a solar 
19.29 	energy generating system with a capacity of 1,000 kilowatts or greater is not complete 
19.30 	unless it includes a solar energy system size determination under this section.
19.31 	(b) (c) The commissioner of commerce shall provide forms and assistance for 
19.32 	applicants to make a request for a size determination. Upon written request of an applicant, 
19.33 	the commissioner shall provide a written size determination within 30 days of receipt of 
20.1 	the request and of any information requested by the commissioner. In the case of a dispute, 
20.2 	the chair of the Public Utilities Commission shall make the final size determination.

20.3 	Sec. 26. Minnesota Statutes 2014, section 216E.03, subdivision 3, is amended to read:
20.4 		Subd. 3.Application. Any person seeking to construct a large electric power 
20.5 	generating plant or a high-voltage transmission line must apply to the commission for a 
20.6 	site or route permit. The application shall contain such information as the commission may 
20.7 	require. The applicant shall propose at least two sites for a large electric power generating 
20.8 	plant and two routes for a high-voltage transmission line, except that an applicant shall 
20.9 	only be required to propose one site for a large electric power generating plant that is a 
20.10 	solar energy generating system. Neither of the two proposed routes may be designated as 
20.11 	a preferred route and all proposed routes must be numbered and designated as alternatives. 
20.12 	The commission shall determine whether an application is complete and advise the 
20.13 	applicant of any deficiencies within ten days of receipt. An application is not incomplete if 
20.14 	information not in the application can be obtained from the applicant during the first phase 
20.15 	of the process and that information is not essential for notice and initial public meetings.

20.16 	Sec. 27. Minnesota Statutes 2014, section 216E.05, subdivision 2, is amended to read:
20.17 		Subd. 2.Applicable projects. Applicants may seek approval from local units of 
20.18 	government to construct the following projects:
20.19 	(1) large electric power generating plants, except solar energy generating systems, 
20.20 	with a capacity of less than 80 megawatts;
20.21 	(2) large electric power generating plants of any size that burn natural gas and are 
20.22 	intended to be a peaking plant;
20.23 	(3) high-voltage transmission lines of between 100 and 200 kilovolts;
20.24 	(4) substations with a voltage designed for and capable of operation at a nominal 
20.25 	voltage of 100 kilovolts or more;
20.26 	(5) a high-voltage transmission line service extension to a single customer between 
20.27 	200 and 300 kilovolts and less than ten miles in length; and
20.28 	(6) a high-voltage transmission line rerouting to serve the demand of a single 
20.29 	customer when the rerouted line will be located at least 80 percent on property owned or 
20.30 	controlled by the customer or the owner of the transmission line.

20.31 	Sec. 28. [216E.055] SOLAR FACILITY PERMIT AUTHORITY; ASSUMPTION 
20.32 	BY COUNTIES AND MUNICIPALITIES.
21.1 	(a) A county or municipality may, by resolution and upon written notice to the 
21.2 	Public Utilities Commission, assume responsibility for processing applications for permits 
21.3 	required under this chapter for large electric power generating plants solely within their 
21.4 	jurisdiction that are solar energy generating systems up to 25,000 kilowatts. If a county 
21.5 	or municipality assumes the responsibility for permit application processing, the county 
21.6 	or municipality may delegate the authority to issue the permit to an appropriate county 
21.7 	officer or employee; or the county or municipality may determine the permit application 
21.8 	should be processed as a conditional use in accordance with procedures and processes 
21.9 	established under chapter 394 or 462. 
21.10 	(b) A county or municipality that exercises its option under paragraph (a) may issue, 
21.11 	deny, modify, impose conditions upon, or revoke permits pursuant to this section. The 
21.12 	action of the county or municipality about a permit application is final, subject to appeal. 
21.13 	(c) The commission shall, by order, establish general permit standards, including 
21.14 	appropriate set-backs, governing site permits for solar energy generating systems under 
21.15 	this chapter. The order must consider existing and historic commission standards for 
21.16 	permits issued by the commission. The general permit standards shall apply to permits 
21.17 	issued by counties and municipalities under this section and to permits issued by the 
21.18 	commission under this chapter. The commission or a county or municipality may grant a 
21.19 	variance from a general permit standard if the variance is found to be in the public interest.
21.20 	(d) A county or municipality may by ordinance adopt standards for solar energy 
21.21 	generating systems that are more stringent than standards in commission rules or in the 
21.22 	commission's permit standards. The commission, when considering a permit application 
21.23 	for a solar energy generating system in a jurisdiction that has assumed permitting authority 
21.24 	under this section, shall consider and apply the jurisdiction's more stringent standards 
21.25 	unless the commission finds good cause to not apply the standards.
21.26 	(e) The commission and the commissioner of commerce shall provide technical 
21.27 	assistance to a county or municipality with respect to the processing of site permit 
21.28 	applications for solar energy generating systems under this section.
21.29 	(f) This section does not exempt applicants from the requirements under section 
21.30 	216E.021.

21.31 	Sec. 29. Minnesota Statutes 2014, section 453A.02, subdivision 5, is amended to read:
21.32 		Subd. 5.Gas. "Gas" means either natural or synthetic gas, including propane, 
21.33 	manufactured gas, methane from coal beds, geothermal gas, or any mixture thereof, 
21.34 	whether in gaseous or liquid form, or any by-product resulting therefrom.

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

22.1 	Sec. 30. COMPETITIVE RATE FOR ENERGY-INTENSIVE, 
22.2 	TRADE-EXPOSED ELECTRIC UTILITY CUSTOMER.
 22.3 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms 
22.4 	have the meanings given them.
22.5 	(b) "Energy-intensive, trade-exposed (EITE) customer" means a customer of an 
22.6 	investor-owned utility that provides electric service at retail to fewer than 200,000 
22.7 	customers and is:
22.8 	(1) an iron mining extraction and processing facility, including a "scram mining 
22.9 	operation," as that term is defined in Minnesota Rules, part 6130.0100, subpart 16;
22.10 	(2) a paper mill, wood products manufacturer, sawmill, or oriented strand board 
22.11 	manufacturer;
22.12 	(3) a steel mill and related facility; or
22.13 	(4) any other globally competitive electric customer who can demonstrate that: (i) 
22.14 	energy costs are at least 15 percent of the customer's overall cost of production; (ii) their 
22.15 	energy rates are significantly higher than their competitors;  and (iii) those higher rates 
22.16 	impede the customer's ability to compete in the global market.
22.17 	(c) "EITE rate schedule" means a rate schedule that establishes the terms of service 
22.18 	for an individual or group of energy-intensive, trade-exposed customers.
22.19 	(d) "EITE rate" means the rate or rates offered by the utility under an EITE rate 
22.20 	schedule.
22.21 		Subd. 2.Rates and terms of EITE rate schedule. (a) An investor-owned electric 
22.22 	utility that provides electric service at retail to fewer than 200,000 customers may propose 
22.23 	an EITE rate schedule within its service territory for commission approval that includes 
22.24 	various EITE rate options such as fixed rates or market-based rates.
22.25 	(b) The minimum rate for the EITE schedule must recover at least the incremental 
22.26 	cost of providing the service, including the cost of additional capacity that is to be added 
22.27 	while the rate is in effect and any applicable on-peak or off-peak differential.
22.28 	(c) Notwithstanding Minnesota Statutes, section 216B.03, 216B.05, 216B.06, 
22.29 	216B.07, or 216B.16, the commission shall approve a proposed EITE rate schedule if 
22.30 	it finds the schedule provides net benefits to the utility and its customers, considering 
22.31 	among other things:
22.32 	(1) potential cost impacts to the utility's customers;
22.33 	(2) the net benefit to the local or state economy through the retention or increase of 
22.34 	jobs;
22.35 	(3) a net increase in economic development in the utility's service territory; and 
23.1 	(4) the extent to which a significant rate increase for all other customers might 
23.2 	otherwise be avoided by preventing a reduction of EITE customer load.
23.3 		Subd. 3.Eligibility for EITE rate. A customer is eligible for an EITE rate under 
23.4 	the EITE rate schedule if the customer can demonstrate to the commission that it meets 
23.5 	the defined criteria under subdivision 1, paragraph (b).
23.6 		Subd. 4.Commission process. (a) The commission shall review the EITE rate 
23.7 	schedule proposed by an investor-owned electric utility and make a final determination in 
23.8 	any proceeding begun under this section within 120 days of a miscellaneous rate filing by 
23.9 	the electric utility. 
23.10 	(b) An EITE rate offered by an electric utility under an approved EITE rate schedule 
23.11 	must be filed with the commission.
23.12 		Subd. 5.Cost recovery. (a) Upon approval of an EITE rate, the utility shall create 
23.13 	a separate account to track the difference in revenue between what would have been 
23.14 	collected under the electric utility's applicable standard tariff and the EITE rate schedule.  
23.15 	In its next general rate case or other methodology the commission shall determine, the 
23.16 	commission shall allow the utility to recover the incremental costs if it determines that 
23.17 	recovery is in the public interest, or refund the incremental revenues, associated with 
23.18 	providing service to a customer under the EITE rate from the utility's nonenergy-intensive, 
23.19 	trade-exposed customers.
23.20 	(b) The commission shall take steps as necessary to mitigate the impacts of 
23.21 	cost recovery of the implementation of the EITE rate on other ratepayers, unless the 
23.22 	commission finds that the cost impacts are minimal.

23.23 	Sec. 31.  REPEALER.
 23.24 	Minnesota Statutes 2014, section 216C.436, subdivision 6, is repealed.