1.1 	A bill for an act
1.2 	relating to state government; appropriating money for energy, utilities, environment, 
1.3 	and climate; requiring utilities to accept an individual taxpayer identification 
1.4 	number when new customers apply for utility service; allowing public utilities 
1.5 	providing electric service to propose goals for efficient fuel-switching improvement 
1.6 	achievements to the commissioner of commerce; modifying the commercial 
1.7 	property assessed clean energy program; making technical changes to various 
1.8 	provisions governing or administered by the Department of Commerce;amending 
1.9 	Minnesota Statutes 2022, sections 216B.098, by adding a subdivision; 216B.16, 
1.10 	subdivisions 6c, 8; 216B.2402, subdivision 10, by adding a subdivision; 216B.2403, 
1.11 	subdivisions 2, 3, 5, 8; 216B.241, subdivisions 2, 11, 12; 216C.10; 216C.435, 
1.12 	subdivisions 3a, 3b, 4, 10, by adding subdivisions; 216C.436, subdivisions 1, 4, 
1.13 	7, 8, 10; Minnesota Statutes 2023 Supplement, sections 116C.779, subdivision 1; 
1.14 	216C.08; 216C.09; 216C.435, subdivision 8; 216C.436, subdivisions 1b, 2; 
1.15 	proposing coding for new law in Minnesota Statutes, chapter 216C.
1.16 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.17 	ARTICLE 1
1.18 	CLIMATE AND ENERGY FINANCE

1.19	Section 1. APPROPRIATIONS.
 	
1.20 	The sums shown in the columns marked "Appropriations" are appropriated to the agencies 
1.21 	and for the purposes specified in this article. The appropriations are from the general fund, 
1.22 	or another named fund, and are available for the fiscal years indicated for each purpose. 
1.23 	The figures "2024" and "2025" used in this article mean that the appropriations listed under 
1.24 	them are available for the fiscal year ending June 30, 2024, or June 30, 2025, respectively. 
1.25 	"The first year" is fiscal year 2024. "The second year" is fiscal year 2025. "The biennium" 
1.26 	is fiscal years 2024 and 2025.

1.27				APPROPRIATIONS
	
1.28				Available for the Year
	
2.1				Ending June 30
	
2.2					2024
		2025

2.3	Sec. 2. DEPARTMENT OF COMMERCE

2.4	Subdivision 1.Total Appropriation
 	$
	0
	$
	1,000,000
	
2.5 	The amounts that may be spent for each 
2.6 	purpose are specified in the following 
2.7 	subdivisions.

2.8	Subd. 2.Advanced Nuclear Technologies Study
 					
2.9 	$300,000 the second year is for the advanced 
2.10 	nuclear technologies study under article 3, 
2.11 	section 34. This is a onetime appropriation.

2.12
2.13	Subd. 3.Thermal Energy Network Site 
Suitability Study
 					
2.14 	$500,000 the second year is for the thermal 
2.15 	energy network site suitability study under 
2.16 	article 3, section 36. This is a onetime 
2.17 	appropriation.

2.18	Subd. 4.Grant Development Assistance
 					
2.19 	$200,000 the second year is transferred to the 
2.20 	state competitiveness fund account under 
2.21 	Minnesota Statutes, section 216C.391, for 
2.22 	grant development assistance under Minnesota 
2.23 	Statutes, section 216C.391, subdivision 4. This 
2.24 	is a onetime transfer.

2.25	Sec. 3. PUBLIC UTILITIES COMMISSION
 	$
	0
	$
	39,000
	
2.26 	$39,000 the second year is for the thermal 
2.27 	energy network deployment work group under 
2.28 	article 3, section 35. The base budget for this 
2.29 	appropriation is $39,000 in fiscal year 2026 
2.30 	and $0 in fiscal year 2027.

2.31 	ARTICLE 2
2.32 	RENEWABLE DEVELOPMENT ACCOUNT APPROPRIATIONS

2.33	Section 1. APPROPRIATIONS.
 	
3.1 	The sums shown in the columns marked "Appropriations" are appropriated to the agencies 
3.2 	and for the purposes specified in this article. Notwithstanding Minnesota Statutes, section 
3.3 	116C.779, subdivision 1, paragraph (j), the appropriations are from the renewable 
3.4 	development account in the special revenue fund established in Minnesota Statutes, section 
3.5 	116C.779, subdivision 1, and are available for the fiscal years indicated for each purpose. 
3.6 	The figures "2024" and "2025" used in this article mean that the appropriations listed under 
3.7 	them are available for the fiscal year ending June 30, 2024, or June 30, 2025, respectively. 
3.8 	"The first year" is fiscal year 2024. "The second year" is fiscal year 2025. "The biennium" 
3.9 	is fiscal years 2024 and 2025.

3.10				APPROPRIATIONS
	
3.11				Available for the Year
	
3.12				Ending June 30
	
3.13					2024
		2025

3.14	Sec. 2. DEPARTMENT OF COMMERCE

3.15	Subdivision 1.Total Appropriation
 	$
	0
	$
	13,650,000
	
3.16 	The amounts that may be spent for each 
3.17 	purpose are specified in the following 
3.18 	subdivisions.

3.19
3.20	Subd. 2.Geothermal Energy System; Sabathani 
Community Center
 					
3.21 	(a) $6,000,000 the second year is for a grant 
3.22 	to the Sabathani Community Center in 
3.23 	Minneapolis to construct a geothermal energy 
3.24 	system that provides space heating and cooling 
3.25 	to the center. This is a onetime appropriation 
3.26 	and is available until June 30, 2027.
3.27 	(b) For the purposes of this subdivision, 
3.28 	"geothermal energy system" means a system 
3.29 	composed of: a heat pump that moves a 
3.30 	heat-transferring fluid through piping 
3.31 	embedded in the earth and absorbs the earth's 
3.32 	constant temperature; a heat exchanger; and 
3.33 	ductwork to distribute heated and cooled air 
3.34 	to a building.

4.1
4.2	Subd. 3.Energy Efficiency Projects; Dakota 
County
 					
4.3 	(a) $500,000 the second year is for a grant to 
4.4 	Dakota County for energy efficiency projects 
4.5 	that are located in the service area of the public 
4.6 	utility subject to Minnesota Statutes, section 
4.7 	116C.779. This appropriation is available until 
4.8 	June 30, 2027. The base budget for this 
4.9 	appropriation is $500,000 in fiscal year 2026 
4.10 	and $0 in fiscal year 2027.
4.11 	(b) For purposes of this subdivision, "energy 
4.12 	efficiency project" includes but is not limited 
4.13 	to: (1) LED lighting, as defined under 
4.14 	Minnesota Statutes, section 216B.241, 
4.15 	subdivision 5; (2) solar arrays; or (3) heating, 
4.16 	ventilating, or air conditioning system 
4.17 	improvements.

4.18	Subd. 4.Anaerobic Digester Energy System
 					
4.19 	(a) $5,000,000 the second year is for a grant 
4.20 	to Recycling and Energy, in partnership with 
4.21 	Dem-Con HZI Bioenergy, LLC, to construct 
4.22 	an anaerobic energy system in Louisville 
4.23 	Township. This appropriation is available until 
4.24 	June 30, 2027. The base budget for this 
4.25 	appropriation is $5,000,000 in fiscal year 2026 
4.26 	and $0 in fiscal year 2027.
4.27 	(b) For the purposes of this subdivision, 
4.28 	"anaerobic energy system" means a facility 
4.29 	that uses diverted food and organic waste to 
4.30 	create renewable natural gas and biochar.

4.31
4.32	Subd. 5.Wildlife Rehabilitation Center of 
Minnesota
 					
4.33 	$400,000 the second year is for a grant to the 
4.34 	Wildlife Rehabilitation Center of Minnesota 
4.35 	to install solar panels. This is a onetime 
5.1 	appropriation and is available until June 30, 
5.2 	2027.

5.3
5.4	Subd. 6.Ultraefficient Vehicle Development 
Grants
 					
5.5 	$250,000 the second year is transferred to the 
5.6 	ultraefficient vehicle development grant 
5.7 	account under section 4, subdivision 4, to 
5.8 	provide grants for developers and producers 
5.9 	of ultraefficient vehicles. This is a onetime 
5.10 	transfer.

5.11
5.12	Subd. 7.Geothermal Heat Exchange System 
Rebate Program
 					
5.13 	$1,500,000 the second year is transferred to 
5.14 	the geothermal heat exchange system rebate 
5.15 	account established under Minnesota Statutes, 
5.16 	section 216C.47, to provide rebates for 
5.17 	geothermal heat exchange systems for eligible 
5.18 	applicants. This is a onetime transfer.

5.19	Subd. 8.Administrative Costs
 					
5.20 	(a) Notwithstanding Minnesota Statutes, 
5.21 	section 16B.98, subdivision 14, the 
5.22 	commissioner may use up to two percent of 
5.23 	the appropriations in subdivisions 2 to 5 for 
5.24 	administrative costs.
5.25 	(b) Notwithstanding Minnesota Statutes, 
5.26 	section 16B.98, subdivision 14, the 
5.27 	commissioner may use up to five percent of 
5.28 	the appropriations in subdivisions 6 and 7 for 
5.29 	administrative costs.

5.30 	Sec. 3. [216C.47] GEOTHERMAL HEAT EXCHANGE SYSTEM REBATE 
5.31 	PROGRAM.
5.32 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms have 
5.33 	the meanings given.
6.1 	(b) "Eligible applicant" means a person, business, nonprofit, government entity, federally 
6.2 	recognized Tribe in Minnesota, or religious institution who provides evidence to the 
6.3 	commissioner's satisfaction demonstrating that the person has received or has applied for 
6.4 	a geothermal heat exchange system rebate available from the federal Department of Treasury 
6.5 	under the Inflation Reduction Act of 2022, Public Law 117-189, for a commercial or 
6.6 	multifamily building located in Minnesota.
6.7 	(c) "Geothermal heat exchange system" means a heating or cooling exchange mechanism 
6.8 	composed of a mechanism to collect or reject heat from or to the underground.
6.9 	(d) "Commissioner" means the commissioner of the Department of Commerce.
6.10 		Subd. 2.Establishment. A geothermal heat exchange system rebate program is 
6.11 	established in the department to provide financial assistance to eligible applicants that install 
6.12 	geothermal heat exchange technology in the applicant's building.
6.13 		Subd. 3.Application. (a) An application for a rebate under this section must be made 
6.14 	to the commissioner on a form developed by the commissioner. The application must be 
6.15 	accompanied by documentation, as required by the commissioner, demonstrating:
6.16 	(1) that the applicant is an eligible applicant;
6.17 	(2) that the applicant owns the Minnesota building in which the geothermal exchange 
6.18 	system is to be installed;
6.19 	(3) that an energy audit of the building in which the geothermal exchange system is to 
6.20 	be installed has been conducted within the 18 months preceding the application date by a 
6.21 	person with a building analyst technician certification issued by the Building Performance 
6.22 	Institute, Inc., or an equivalent certification as determined by the commissioner;
6.23 	(4) that the applicant has installed a geothermal heat exchange system of the capacity 
6.24 	recommended by the auditor or contractor, and has had the heat pump installed by a 
6.25 	contractor with sufficient training and experience in installing heat pumps, as determined 
6.26 	by the commissioner; and
6.27 	(5) the total cost to install the geothermal heat exchange system in the applicant's building 
6.28 	and the associated geothermal loop installed and located outside of the building.
6.29 	(b) The commissioner must develop administrative procedures governing the application 
6.30 	and rebate award processes.
7.1 	(c) The commissioner may modify program requirements under this section when 
7.2 	necessary to align with comparable federal programs administered by the department under 
7.3 	the federal Inflation Reduction Act of 2022, Public Law 117-189.
7.4 		Subd. 4.Rebate amount. A rebate awarded under this section must not exceed the lower 
7.5 	of:
7.6 	(1) ten percent of geothermal heat exchange system costs, not to exceed $100,000 for a 
7.7 	single project; or
7.8 	(2) the total cost to purchase and install the heat exchange system in an eligible applicant's 
7.9 	building net of any financial support received for the system from other federal, state, or 
7.10 	utility programs.
7.11 		Subd. 5.Prioritization. In evaluating applications under this program, the commissioner 
7.12 	must give priority to applications that:
7.13 	(1) are located in environmental justice communities, as defined by section 115A.03, 
7.14 	subdivision 10b;
7.15 	(2) have submitted a workforce plan demonstrating the intention to use registered 
7.16 	apprenticeships; or
7.17 	(3) are multifamily housing or commercial buildings that:
7.18 	(i) are owned by a non-profit or government entity; and
7.19 	(ii) meet the definition of low-income rental property under section 273.128.
7.20 		Subd. 6.Account established. (a) The geothermal heat exchange system rebate account 
7.21 	is established as a separate account in the special revenue fund in the state treasury. The 
7.22 	commissioner must credit appropriations and transfers to the account. Earnings, including 
7.23 	interest, dividends, and any other earnings arising from assets of the account, must be 
7.24 	credited to the account. Money remaining in the account at the end of a fiscal year does not 
7.25 	cancel to the general fund, but remains in the account until expended. The commissioner 
7.26 	must manage the account.
7.27 	(b) Money in the account is appropriated to the commissioner for the purposes of this 
7.28 	section and to reimburse the reasonable costs incurred by the department to administer this 
7.29 	section. Any money remaining in the account on January 1, 2033, cancels to the renewable 
7.30 	development account.

8.1 	Sec. 4. ULTRAEFFICIENT VEHICLE DEVELOPMENT GRANTS.
 8.2 		Subdivision 1.Program establishment. (a) A grant program is established in the 
8.3 	Department of Commerce to provide financial assistance to developers and producers of 
8.4 	ultraefficient vehicles that use proprietary technology.
8.5 	(b) For purposes of this section, "ultraefficient vehicle" means a fully closed compartment 
8.6 	vehicle designed to carry at least one adult passenger that achieves:
8.7 	(1) at least 75 miles per gallon while operating on gasoline;
8.8 	(2) at least 75 miles per gallon equivalent while operating as a hybrid electric-gasoline; 
8.9 	or
8.10 	(3) at least 75 miles per gallon equivalent while operating as a fully electric vehicle.
8.11 		Subd. 2.Application process. Applicants seeking a grant under this section must submit 
8.12 	an application to the commissioner of commerce on a form developed by the commissioner. 
8.13 	The commissioner is responsible for receiving and reviewing grant applications and awarding 
8.14 	grants under this subdivision. The commissioner must develop administrative procedures 
8.15 	to govern the application, evaluation, and grant-award process.
8.16 		Subd. 3.Grant awards. The maximum grant award for each eligible applicant awarded 
8.17 	a grant under this section is $250,000. In awarding grants under this section, the department 
8.18 	must:
8.19 	(1) give priority to ultraefficient vehicle projects that are deemed to be near production 
8.20 	ready; and
8.21 	(2) give priority to ultraefficient vehicle projects that maximize the use of electricity to 
8.22 	charge and run the vehicle.
8.23 		Subd. 4.Account established. An ultraefficient vehicle development grant account is 
8.24 	established in the special revenue fund in the state treasury. The commissioner of commerce 
8.25 	must credit to the account appropriations made for ultraefficient vehicle development grants. 
8.26 	Earnings, including interest, arising from assets in the account, must be credited to the 
8.27 	account. Money in the account is available until June 30, 2028. Any amount in the account 
8.28 	after June 30, 2028, cancels to the renewable development account. The commissioner of 
8.29 	commerce must manage the account.
8.30 		Subd. 5.Appropriation; expenditures. Money in the account established in subdivision 
8.31 	4 is appropriated to the commissioner of commerce and must be used only:
8.32 	(1) to make grant awards under this section; and
9.1 	(2) to pay the reasonable costs incurred by the department to administer this section.
9.2 		Subd. 6.Report. On January 15, 2026, and on January 15, 2029, the commissioner of 
9.3 	commerce must submit a report to the chairs and ranking minority members of the legislative 
9.4 	committees with jurisdiction over energy policy and finance on the grant awards under this 
9.5 	section.

9.6 	ARTICLE 3
9.7 	ENERGY, UTILITIES, ENVIRONMENT, AND CLIMATE POLICY

9.8 	Section 1. Minnesota Statutes 2023 Supplement, section 116C.779, subdivision 1, is 
9.9 	amended to read:
9.10 		Subdivision 1.Renewable development account. (a) The renewable development 
9.11 	account is established as a separate account in the special revenue fund in the state treasury. 
9.12 	Appropriations and transfers to the account shall be credited to the account. Earnings, such 
9.13 	as interest, dividends, and any other earnings arising from assets of the account, shall be 
9.14 	credited to the account. Funds remaining in the account at the end of a fiscal year are not 
9.15 	canceled to the general fund but remain in the account until expended. The account shall 
9.16 	be administered by the commissioner of management and budget as provided under this 
9.17 	section.
9.18 	(b) On July 1, 2017, the public utility that owns the Prairie Island nuclear generating 
9.19 	plant must transfer all funds in the renewable development account previously established 
9.20 	under this subdivision and managed by the public utility to the renewable development 
9.21 	account established in paragraph (a). Funds awarded to grantees in previous grant cycles 
9.22 	that have not yet been expended and unencumbered funds required to be paid in calendar 
9.23 	year 2017 under paragraphs (f) and (g), and sections 116C.7792 and 216C.41, are not subject 
9.24 	to transfer under this paragraph.
9.25 	(c) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing 
9.26 	each January 15 thereafter, the public utility that owns the Prairie Island nuclear generating 
9.27 	plant must transfer to the renewable development account $500,000 each year for each dry 
9.28 	cask containing spent fuel that is located at the Prairie Island power plant for each year the 
9.29 	plant is in operation, and $7,500,000 each year the plant is not in operation if ordered by 
9.30 	the commission pursuant to paragraph (i). The fund transfer must be made if nuclear waste 
9.31 	is stored in a dry cask at the independent spent-fuel storage facility at Prairie Island for any 
9.32 	part of a year. The total amount transferred annually under this paragraph must be reduced 
9.33 	by $3,750,000.
10.1 	(d) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing 
10.2 	each January 15 thereafter, the public utility that owns the Monticello nuclear generating 
10.3 	plant must transfer to the renewable development account $350,000 each year for each dry 
10.4 	cask containing spent fuel that is located at the Monticello nuclear power plant for each 
10.5 	year the plant is in operation, and $5,250,000 each year the plant is not in operation if ordered 
10.6 	by the commission pursuant to paragraph (i). The fund transfer must be made if nuclear 
10.7 	waste is stored in a dry cask at the independent spent-fuel storage facility at Monticello for 
10.8 	any part of a year.
10.9 	(e) Each year, the public utility shall withhold from the funds transferred to the renewable 
10.10 	development account under paragraphs (c) and (d) the amount necessary to pay its obligations 
10.11 	under paragraphs (f) and (g), and sections 116C.7792 and 216C.41, for that calendar year.
10.12 	(f) If the commission approves a new or amended power purchase agreement, the 
10.13 	termination of a power purchase agreement, or the purchase and closure of a facility under 
10.14 	section 216B.2424, subdivision 9, with an entity that uses poultry litter to generate electricity, 
10.15 	the public utility subject to this section shall enter into a contract with the city in which the 
10.16 	poultry litter plant is located to provide grants to the city for the purposes of economic 
10.17 	development on the following schedule: $4,000,000 in fiscal year 2018; $6,500,000 each 
10.18 	fiscal year in 2019 and 2020; and $3,000,000 in fiscal year 2021. The grants shall be paid 
10.19 	by the public utility from funds withheld from the transfer to the renewable development 
10.20 	account, as provided in paragraphs (b) and (e).
10.21 	(g) If the commission approves a new or amended power purchase agreement, or the 
10.22 	termination of a power purchase agreement under section 216B.2424, subdivision 9, with 
10.23 	an entity owned or controlled, directly or indirectly, by two municipal utilities located north 
10.24 	of Constitutional Route No. 8, that was previously used to meet the biomass mandate in 
10.25 	section 216B.2424, the public utility that owns a nuclear generating plant shall enter into a 
10.26 	grant contract with such entity to provide $6,800,000 per year for five years, commencing 
10.27 	30 days after the commission approves the new or amended power purchase agreement, or 
10.28 	the termination of the power purchase agreement, and on each June 1 thereafter through 
10.29 	2021, to assist the transition required by the new, amended, or terminated power purchase 
10.30 	agreement. The grant shall be paid by the public utility from funds withheld from the transfer 
10.31 	to the renewable development account as provided in paragraphs (b) and (e).
10.32 	(h) The collective amount paid under the grant contracts awarded under paragraphs (f) 
10.33 	and (g) is limited to the amount deposited into the renewable development account, and its 
10.34 	predecessor, the renewable development account, established under this section, that was 
11.1 	not required to be deposited into the account under Laws 1994, chapter 641, article 1, section 
11.2 	10.
11.3 	(i) After discontinuation of operation of the Prairie Island nuclear plant or the Monticello 
11.4 	nuclear plant and each year spent nuclear fuel is stored in dry cask at the discontinued 
11.5 	facility, the commission shall require the public utility to pay $7,500,000 for the discontinued 
11.6 	Prairie Island facility and $5,250,000 for the discontinued Monticello facility for any year 
11.7 	in which the commission finds, by the preponderance of the evidence, that the public utility 
11.8 	did not make a good faith effort to remove the spent nuclear fuel stored at the facility to a 
11.9 	permanent or interim storage site out of the state. This determination shall be made at least 
11.10 	every two years.
11.11 	(j) Funds in the account may be expended only for any of the following purposes:
11.12 	(1) to stimulate research and development of renewable electric energy technologies;
11.13 	(2) to encourage grid modernization, including, but not limited to, projects that implement 
11.14 	electricity storage, load control, and smart meter technology; and
11.15 	(3) to stimulate other innovative energy projects that reduce demand and increase system 
11.16 	efficiency and flexibility.
11.17 	Expenditures from the fund must benefit Minnesota ratepayers receiving electric service 
11.18 	from the utility that owns a nuclear-powered electric generating plant in this state or the 
11.19 	Prairie Island Indian community or its members.
11.20 	The utility that owns a nuclear generating plant is eligible to apply for grants under this 
11.21 	subdivision.
11.22 	(k) For the purposes of paragraph (j), the following terms have the meanings given:
11.23 	(1) "renewable" has the meaning given in section 216B.2422, subdivision 1, paragraph 
11.24 	(c), clauses (1), (2), (4), and (5); and
11.25 	(2) "grid modernization" means:
11.26 	(i) enhancing the reliability of the electrical grid;
11.27 	(ii) improving the security of the electrical grid against cyberthreats and physical threats; 
11.28 	and
11.29 	(iii) increasing energy conservation opportunities by facilitating communication between 
11.30 	the utility and its customers through the use of two-way meters, control technologies, energy 
11.31 	storage and microgrids, technologies to enable demand response, and other innovative 
11.32 	technologies.
12.1 	(l) A renewable development account advisory group that includes, among others, 
12.2 	representatives of the public utility and its ratepayers, and includes at least one representative 
12.3 	of the Prairie Island Indian community appointed by that community's tribal council, shall 
12.4 	develop recommendations on account expenditures. The advisory group must design a 
12.5 	request for proposal and evaluate projects submitted in response to a request for proposals. 
12.6 	The advisory group must utilize an independent third-party expert to evaluate proposals 
12.7 	submitted in response to a request for proposal, including all proposals made by the public 
12.8 	utility. A request for proposal for research and development under paragraph (j), clause (1), 
12.9 	may be limited to or include a request to higher education institutions located in Minnesota 
12.10 	for multiple projects authorized under paragraph (j), clause (1). The request for multiple 
12.11 	projects may include a provision that exempts the projects from the third-party expert review 
12.12 	and instead provides for project evaluation and selection by a merit peer review grant system. 
12.13 	In the process of determining request for proposal scope and subject and in evaluating 
12.14 	responses to request for proposals, the advisory group must strongly consider, where 
12.15 	reasonable:
12.16 	(1) potential benefit to Minnesota citizens and businesses and the utility's ratepayers; 
12.17 	and
12.18 	(2) the proposer's commitment to increasing the diversity of the proposer's workforce 
12.19 	and vendors.
12.20 	(m) The advisory group shall submit funding recommendations to the public utility, 
12.21 	which has full and sole authority to determine which expenditures shall be submitted by 
12.22 	the advisory group to the legislature. The commission may approve proposed expenditures, 
12.23 	may disapprove proposed expenditures that it finds not to be in compliance with this 
12.24 	subdivision or otherwise not in the public interest, and may, if agreed to by the public utility, 
12.25 	modify proposed expenditures. The commission shall, by order, submit its funding 
12.26 	recommendations to the legislature as provided under paragraph (n).
12.27 	(n) The commission shall present its recommended appropriations from the account to 
12.28 	the senate and house of representatives committees with jurisdiction over energy policy and 
12.29 	finance annually by February 15. Expenditures from the account must be appropriated by 
12.30 	law. In enacting appropriations from the account, the legislature:
12.31 	(1) may approve or disapprove, but may not modify, the amount of an appropriation for 
12.32 	a project recommended by the commission; and
12.33 	(2) may not appropriate money for a project the commission has not recommended 
12.34 	funding.
13.1 	(o) A request for proposal for renewable energy generation projects must, when feasible 
13.2 	and reasonable, give preference to projects that are most cost-effective for a particular energy 
13.3 	source.
13.4 	(p) The advisory group must annually, by February 15, report to the chairs and ranking 
13.5 	minority members of the legislative committees with jurisdiction over energy policy on 
13.6 	projects funded by the account for the prior year and all previous years. The report must, 
13.7 	to the extent possible and reasonable, itemize the actual and projected financial benefit to 
13.8 	the public utility's ratepayers of each project.
13.9 	(q) By February 1, 2018, and each February 1 thereafter, the commissioner of 
13.10 	management and budget shall submit a written report regarding the availability of funds in 
13.11 	and obligations of the account to the chairs and ranking minority members of the senate 
13.12 	and house committees with jurisdiction over energy policy and finance, the public utility, 
13.13 	and the advisory group.
13.14 	(r) (q) A project receiving funds from the account must produce a written final report 
13.15 	that includes sufficient detail for technical readers and a clearly written summary for 
13.16 	nontechnical readers. The report must include an evaluation of the project's financial, 
13.17 	environmental, and other benefits to the state and the public utility's ratepayers. A project 
13.18 	receiving funds from the account must submit a report that meets the requirements of section 
13.19 	216C.51, subdivisions 3 and 4, each year the project funded by the account is in progress.
13.20 	(s) (r) Final reports, any mid-project status reports, and renewable development account 
13.21 	financial reports must be posted online on a public website designated by the commissioner 
13.22 	of commerce.
13.23 	(t) (s) All final reports must acknowledge that the project was made possible in whole 
13.24 	or part by the Minnesota renewable development account, noting that the account is financed 
13.25 	by the public utility's ratepayers.
13.26 	(u) (t) Of the amount in the renewable development account, priority must be given to 
13.27 	making the payments required under section 216C.417.
13.28 	(v) (u) Construction projects receiving funds from this account are subject to the 
13.29 	requirement to pay the prevailing wage rate, as defined in section 177.42 and the requirements 
13.30 	and enforcement provisions in sections 177.27, 177.30, 177.32, 177.41 to 177.435, and 
13.31 	177.45.

14.1 	Sec. 2. Minnesota Statutes 2022, section 216B.098, is amended by adding a subdivision 
14.2 	to read:
14.3 		Subd. 7.Social Security number and individual taxpayer identification number. If 
14.4 	a utility requires a new customer to provide a Social Security number on an application for 
14.5 	utility service, the utility must accept an individual taxpayer identification number in lieu 
14.6 	of a Social Security number. The utility application must indicate that the utility accepts an 
14.7 	individual taxpayer identification number.

14.8 	Sec. 3. Minnesota Statutes 2022, section 216B.16, subdivision 6c, is amended to read:
14.9 		Subd. 6c.Incentive plan for energy conservation and efficient fuel-switching 
14.10 	improvement. (a) The commission may order public utilities to develop and submit for 
14.11 	commission approval incentive plans that describe the method of recovery and accounting 
14.12 	for utility conservation and efficient fuel-switching expenditures and savings. For public 
14.13 	utilities that provide electric service, the commission must develop and implement incentive 
14.14 	plans designed to promote energy conservation separately from the plans designed to promote 
14.15 	efficient fuel-switching. In developing the incentive plans the commission shall ensure the 
14.16 	effective involvement of interested parties.
14.17 	(b) In approving incentive plans, the commission shall consider:
14.18 	(1) whether the plan is likely to increase utility investment in cost-effective energy 
14.19 	conservation or efficient fuel switching;
14.20 	(2) whether the plan is compatible with the interest of utility ratepayers and other 
14.21 	interested parties;
14.22 	(3) whether the plan links the incentive to the utility's performance in achieving 
14.23 	cost-effective conservation or efficient fuel switching; and
14.24 	(4) whether the plan is in conflict with other provisions of this chapter.;
14.25 	(5) whether the plan conflicts with other provisions of this chapter; and
14.26 	(6) the likely financial impacts of the conservation and efficient fuel-switching programs 
14.27 	on the utility.
14.28 	(c) The commission may set rates to encourage the vigorous and effective implementation 
14.29 	of utility conservation and efficient fuel-switching programs. The commission may:
14.30 	(1) increase or decrease any otherwise allowed rate of return on net investment based 
14.31 	upon the utility's skill, efforts, and success in conserving improving the efficient use of
14.32 	energy through energy conservation or efficient fuel switching;
15.1 	(2) share between ratepayers and utilities the net savings resulting from energy 
15.2 	conservation and efficient fuel-switching programs to the extent justified by the utility's 
15.3 	skill, efforts, and success in conserving improving the efficient use of energy; and
15.4 	(3) adopt any mechanism that satisfies the criteria of this subdivision, such that 
15.5 	implementation of cost-effective conservation or efficient fuel switching is a preferred 
15.6 	resource choice for the public utility considering the impact of conservation or efficient fuel 
15.7 	switching on earnings of the public utility.
15.8 	(d) Any incentives offered to electric utilities under this subdivision for efficient-fuel 
15.9 	switching projects expire December 31, 2032.

15.10 	Sec. 4. Minnesota Statutes 2022, section 216B.16, subdivision 8, is amended to read:
15.11 		Subd. 8.Advertising expense. (a) The commission shall disapprove the portion of any 
15.12 	rate which makes an allowance directly or indirectly for expenses incurred by a public utility 
15.13 	to provide a public advertisement which:
15.14 	(1) is designed to influence or has the effect of influencing public attitudes toward 
15.15 	legislation or proposed legislation, or toward a rule, proposed rule, authorization or proposed 
15.16 	authorization of the Public Utilities Commission or other agency of government responsible 
15.17 	for regulating a public utility;
15.18 	(2) is designed to justify or otherwise support or defend a rate, proposed rate, practice 
15.19 	or proposed practice of a public utility;
15.20 	(3) is designed primarily to promote consumption of the services of the utility;
15.21 	(4) is designed primarily to promote good will for the public utility or improve the 
15.22 	utility's public image; or
15.23 	(5) is designed to promote the use of nuclear power or to promote a nuclear waste storage 
15.24 	facility.
15.25 	(b) The commission may approve a rate which makes an allowance for expenses incurred 
15.26 	by a public utility to disseminate information which:
15.27 	(1) is designed to encourage conservation efficient use of energy supplies;
15.28 	(2) is designed to promote safety; or
15.29 	(3) is designed to inform and educate customers as to financial services made available 
15.30 	to them by the public utility.
16.1 	(c) The commission shall not withhold approval of a rate because it makes an allowance 
16.2 	for expenses incurred by the utility to disseminate information about corporate affairs to its 
16.3 	owners.

16.4 	Sec. 5. Minnesota Statutes 2022, section 216B.2402, is amended by adding a subdivision 
16.5 	to read:
16.6 		Subd. 3a.Data mining facility. "Data mining facility" means all buildings, structures, 
16.7 	equipment, and installations at a single site where electricity is used primarily by computers 
16.8 	to process transactions involving digital currency not issued by a central authority.

16.9 	Sec. 6. Minnesota Statutes 2022, section 216B.2402, subdivision 10, is amended to read:
16.10 		Subd. 10.Gross annual retail energy sales. "Gross annual retail energy sales" means 
16.11 	a utility's annual electric sales to all Minnesota retail customers, or natural gas throughput 
16.12 	to all retail customers, including natural gas transportation customers, on a utility's 
16.13 	distribution system in Minnesota. Gross annual retail energy sales does not include:
16.14 	(1) gas sales to:
16.15 	(i) a large energy facility;
16.16 	(ii) a large customer facility whose natural gas utility has been exempted by the 
16.17 	commissioner under section 216B.241, subdivision 1a, paragraph (a), with respect to natural 
16.18 	gas sales made to the large customer facility; and
16.19 	(iii) a commercial gas customer facility whose natural gas utility has been exempted by 
16.20 	the commissioner under section 216B.241, subdivision 1a, paragraph (b), with respect to 
16.21 	natural gas sales made to the commercial gas customer facility;
16.22 	(2) electric sales to:
16.23 	(i) a large customer facility whose electric utility has been exempted by the commissioner 
16.24 	under section 216B.241, subdivision 1a, paragraph (a), with respect to electric sales made 
16.25 	to the large customer facility; or and
16.26 	(ii) a data mining facility, if the facility:
16.27 	(A) has provided a signed letter to the utility verifying the facility meets the definition 
16.28 	of a data mining facility; and
16.29 	(B) imposes a peak electrical demand on a consumer-owned utility's system equal to or 
16.30 	greater than 40 percent of the peak electrical demand of the system, measured in the same 
17.1 	manner as the utility that serves the customer facility measures electric demand for billing 
17.2 	purposes; or
17.3 	(3) the amount of electric sales prior to December 31, 2032, that are associated with a 
17.4 	utility's program, rate, or tariff for electric vehicle charging based on a methodology and 
17.5 	assumptions developed by the department in consultation with interested stakeholders no 
17.6 	later than December 31, 2021. After December 31, 2032, incremental sales to electric 
17.7 	vehicles must be included in calculating a public utility's gross annual retail sales.

17.8 	Sec. 7. Minnesota Statutes 2022, section 216B.2403, subdivision 2, is amended to read:
17.9 		Subd. 2.Consumer-owned utility; energy-savings goal. (a) Each individual 
17.10 	consumer-owned electric utility subject to this section has an annual energy-savings goal 
17.11 	equivalent to 1.5 percent of gross annual retail energy sales and each individual 
17.12 	consumer-owned natural gas utility subject to this section has an annual energy-savings 
17.13 	goal equivalent to one percent of gross annual retail energy sales, to be met with a minimum 
17.14 	of energy savings from energy conservation improvements equivalent to at least 0.95 0.90
17.15 	percent of the consumer-owned utility's gross annual retail energy sales. The balance of 
17.16 	energy savings toward the annual energy-savings goal may be achieved only by the following 
17.17 	consumer-owned utility activities:
17.18 	(1) energy savings from additional energy conservation improvements;
17.19 	(2) electric utility infrastructure projects, as defined in section 216B.1636, subdivision 
17.20 	1, that result in increased efficiency greater than would have occurred through normal 
17.21 	maintenance activity;
17.22 	(3) net energy savings from efficient fuel-switching improvements that meet the criteria 
17.23 	under subdivision 8, which may contribute up to 0.55 0.60 percent of the goal; or
17.24 	(4) subject to department approval, demand-side natural gas or electric energy displaced 
17.25 	by use of waste heat recovered and used as thermal energy, including the recovered thermal 
17.26 	energy from a cogeneration or combined heat and power facility.
17.27 	(b) The energy-savings goals specified in this section must be calculated based on 
17.28 	weather-normalized sales averaged over the most recent three years. A consumer-owned 
17.29 	utility may elect to carry forward energy savings in excess of 1.5 percent for a year to the 
17.30 	next three years, except that energy savings from electric utility infrastructure projects may 
17.31 	be carried forward for five years. A particular energy savings can only be used to meet one 
17.32 	year's goal.
18.1 	(c) A consumer-owned utility subject to this section is not required to make energy 
18.2 	conservation improvements that are not cost-effective, even if the improvement is necessary 
18.3 	to attain the energy-savings goal. A consumer-owned utility subject to this section must 
18.4 	make reasonable efforts to implement energy conservation improvements that exceed the 
18.5 	minimum level established under this subdivision if cost-effective opportunities and funding 
18.6 	are available, considering other potential investments the consumer-owned utility intends 
18.7 	to make to benefit customers during the term of the plan filed under subdivision 3.
18.8 	(d) Notwithstanding any provision to the contrary, until July 1, 2026, spending by a 
18.9 	consumer-owned utility subject to this section on efficient fuel-switching improvements 
18.10 	implemented to meet the annual energy savings goal under this section must not exceed 
18.11 	0.550.6 percent per year, averaged over a three-year period, of the consumer-owned utility's 
18.12 	gross annual retail energy sales.

18.13 	Sec. 8. Minnesota Statutes 2022, section 216B.2403, subdivision 3, is amended to read:
18.14 		Subd. 3.Consumer-owned utility; energy conservation and optimization plans. (a) 
18.15 	By June 1, 2022, and at least every three years thereafter, each consumer-owned utility must 
18.16 	file with the commissioner an energy conservation and optimization plan that describes the 
18.17 	programs for energy conservation, efficient fuel-switching, load management, and other 
18.18 	measures the consumer-owned utility intends to offer to achieve the utility's energy savings 
18.19 	goal.
18.20 	(b) A plan's term may extend up to three years. A multiyear plan must identify the total 
18.21 	energy savings and energy savings resulting from energy conservation improvements that 
18.22 	are projected to be achieved in each year of the plan. A multiyear plan that does not, in each 
18.23 	year of the plan, meet both the minimum energy savings goal from energy conservation 
18.24 	improvements and the total energy savings goal of 1.5 percent, or lower goals adjusted by 
18.25 	the commissioner under paragraph (k), must:
18.26 	(1) state why each goal is projected to be unmet; and
18.27 	(2) demonstrate how the consumer-owned utility proposes to meet both goals on an 
18.28 	average basis over the duration of the plan.
18.29 	(c) A plan filed under this subdivision must provide:
18.30 	(1) for existing programs, an analysis of the cost-effectiveness of the consumer-owned 
18.31 	utility's programs offered under the plan, using a list of baseline energy- and capacity-savings 
18.32 	assumptions developed in consultation with the department; and
19.1 	(2) for new programs, a preliminary analysis upon which the program will proceed, in 
19.2 	parallel with further development of assumptions and standards.
19.3 	(d) The commissioner must evaluate a plan filed under this subdivision based on the 
19.4 	plan's likelihood to achieve the energy-savings goals established in subdivision 2. The 
19.5 	commissioner may make recommendations to a consumer-owned utility regarding ways to 
19.6 	increase the effectiveness of the consumer-owned utility's energy conservation activities 
19.7 	and programs under this subdivision. The commissioner may recommend that a 
19.8 	consumer-owned utility implement a cost-effective energy conservation or efficient 
19.9 	fuel-switching program, including an energy conservation program suggested by an outside 
19.10 	source such as a political subdivision, nonprofit corporation, or community organization.
19.11 	(e) Beginning June 1, 2023, and every June 1 thereafter, each consumer-owned utility 
19.12 	must file: (1) an annual update identifying the status of the plan filed under this subdivision, 
19.13 	including: (i) total expenditures and investments made to date under the plan; and (ii) any 
19.14 	intended changes to the plan; and (2) a summary of the annual energy-savings achievements 
19.15 	under a plan. An annual filing made in the last year of a plan must contain a new plan that 
19.16 	complies with this section.
19.17 	(f) When evaluating the cost-effectiveness of a consumer-owned utility's energy 
19.18 	conservation programs, the consumer-owned utility and the commissioner must consider 
19.19 	the costs and benefits to ratepayers, the utility, participants, and society. The commissioner 
19.20 	must also consider the rate at which the consumer-owned utility is increasing energy savings 
19.21 	and expenditures on energy conservation, and lifetime energy savings and cumulative energy 
19.22 	savings.
19.23 	(g) A consumer-owned utility may annually spend and invest up to ten percent of the 
19.24 	total amount spent and invested on energy conservation, efficient fuel-switching, or load 
19.25 	management improvements on research and development projects that meet the applicable 
19.26 	definition of energy conservation, efficient fuel-switching, or load management improvement.
19.27 	(h) A generation and transmission cooperative electric association or municipal power 
19.28 	agency that provides energy services to consumer-owned utilities may file a plan under this 
19.29 	subdivision on behalf of the consumer-owned utilities to which the association or agency 
19.30 	provides energy services and may make investments, offer conservation programs, and 
19.31 	otherwise fulfill the energy-savings goals and reporting requirements of this subdivision 
19.32 	for those consumer-owned utilities on an aggregate basis.
20.1 	(i) A consumer-owned utility is prohibited from spending for or investing in energy 
20.2 	conservation improvements that directly benefit a large energy facility or a large electric 
20.3 	customer facility the commissioner has exempted under section 216B.241, subdivision 1a.
20.4 	(j) The energy conservation and optimization plan of a consumer-owned utility may 
20.5 	include activities to improve energy efficiency in the public schools served by the utility. 
20.6 	These activities may include programs to:
20.7 	(1) increase the efficiency of the school's lighting and heating and cooling systems;
20.8 	(2) recommission buildings;
20.9 	(3) train building operators; and
20.10 	(4) provide opportunities to educate students, teachers, and staff regarding energy 
20.11 	efficiency measures implemented at the school.
20.12 	(k) A consumer-owned utility may request that the commissioner adjust the 
20.13 	consumer-owned utility's minimum goal for energy savings from energy conservation 
20.14 	improvements under subdivision 2, paragraph (a), for the duration of the plan filed under 
20.15 	this subdivision. The request must be made by January 1 of the year when the 
20.16 	consumer-owned utility must file a plan under this subdivision. The request must be based 
20.17 	on:
20.18 	(1) historical energy conservation improvement program achievements;
20.19 	(2) customer class makeup;
20.20 	(3) projected load growth;
20.21 	(4) an energy conservation potential study that estimates the amount of cost-effective 
20.22 	energy conservation potential that exists in the consumer-owned utility's service territory;
20.23 	(5) the cost-effectiveness and quality of the energy conservation programs offered by 
20.24 	the consumer-owned utility; and
20.25 	(6) other factors the commissioner and consumer-owned utility determine warrant an 
20.26 	adjustment.
20.27 	The commissioner must adjust the energy savings goal to a level the commissioner determines 
20.28 	is supported by the record, but must not approve a minimum energy savings goal from 
20.29 	energy conservation improvements that is less than an average of 0.95 percent per year over 
20.30 	the consecutive years of the plan's duration, including the year the minimum energy savings 
20.31 	goal is adjusted.
21.1 	(l) A consumer-owned utility filing a conservation and optimization plan that includes 
21.2 	an efficient fuel-switching program to achieve the utility's energy savings goal must, as part 
21.3 	of the filing, demonstrate by a comparison of greenhouse gas emissions between the fuels
21.4 	that the requirements of subdivision 8 are met, using a full fuel-cycle energy analysis.

21.5 	Sec. 9. Minnesota Statutes 2022, section 216B.2403, subdivision 5, is amended to read:
21.6 		Subd. 5.Energy conservation programs for low-income households. (a) A 
21.7 	consumer-owned utility subject to this section must provide energy conservation programs 
21.8 	to low-income households. The commissioner must evaluate a consumer-owned utility's 
21.9 	plans under this section by considering the consumer-owned utility's historic spending on 
21.10 	energy conservation programs directed to low-income households, the rate of customer 
21.11 	participation in and the energy savings resulting from those programs, and the number of 
21.12 	low-income persons residing in the consumer-owned utility's service territory. A municipal 
21.13 	utility that furnishes natural gas service must spend at least 0.2 percent of the municipal 
21.14 	utility's most recent three-year average gross operating revenue from residential customers 
21.15 	in Minnesota on energy conservation programs for low-income households. A 
21.16 	consumer-owned utility that furnishes electric service must spend at least 0.2 percent of the 
21.17 	consumer-owned utility's gross operating revenue from residential customers in Minnesota 
21.18 	on energy conservation programs for low-income households. The requirement under this 
21.19 	paragraph applies to each generation and transmission cooperative association's aggregate 
21.20 	gross operating revenue from the sale of electricity to residential customers in Minnesota 
21.21 	by all of the association's member distribution cooperatives.
21.22 	(b) To meet all or part of the spending requirements of paragraph (a), a consumer-owned 
21.23 	utility may contribute money to the energy and conservation account established in section 
21.24 	216B.241, subdivision 2a. An energy conservation optimization plan must state the amount 
21.25 	of contributions the consumer-owned utility plans to make to the energy and conservation 
21.26 	account. Contributions to the account must be used for energy conservation programs serving 
21.27 	low-income households, including renters, located in the service area of the consumer-owned 
21.28 	utility making the contribution. Contributions must be remitted to the commissioner by 
21.29 	February 1 each year.
21.30 	(c) The commissioner must establish energy conservation programs for low-income 
21.31 	households funded through contributions to the energy and conservation account under 
21.32 	paragraph (b). When establishing energy conservation programs for low-income households, 
21.33 	the commissioner must consult political subdivisions, utilities, and nonprofit and community 
21.34 	organizations, including organizations providing energy and weatherization assistance to 
22.1 	low-income households. The commissioner must record and report expenditures and energy 
22.2 	savings achieved as a result of energy conservation programs for low-income households 
22.3 	funded through the energy and conservation account in the report required under section 
22.4 	216B.241, subdivision 1c, paragraph (f). The commissioner may contract with a political 
22.5 	subdivision, nonprofit or community organization, public utility, municipality, or 
22.6 	consumer-owned utility to implement low-income programs funded through the energy and 
22.7 	conservation account.
22.8 	(d) A consumer-owned utility may petition the commissioner to modify the required 
22.9 	spending under this subdivision if the consumer-owned utility and the commissioner were 
22.10 	unable to expend the amount required for three consecutive years.
22.11 	(e) The commissioner must develop and establish guidelines for determining the eligibility 
22.12 	of multifamily buildings to participate in energy conservation programs provided to 
22.13 	low-income households. Notwithstanding the definition of low-income household in section 
22.14 	216B.2402, a consumer-owned utility or association may apply the most recent guidelines 
22.15 	published by the department for purposes of determining the eligibility of multifamily 
22.16 	buildings to participate in low-income programs. The commissioner must convene a 
22.17 	stakeholder group to review and update these guidelines by August 1, 2021, and at least 
22.18 	once every five years thereafter. The stakeholder group must include but is not limited to 
22.19 	representatives of public utilities; municipal electric or gas utilities; electric cooperative 
22.20 	associations; multifamily housing owners and developers; and low-income advocates.
22.21 	(f) Up to 15 percent of a consumer-owned utility's spending on low-income energy 
22.22 	conservation programs may be spent on preweatherization measures. A consumer-owned 
22.23 	utility is prohibited from claiming energy savings from preweatherization measures toward 
22.24 	the consumer-owned utility's energy savings goal.
22.25 	(g) The commissioner must, by order, establish a list of preweatherization measures 
22.26 	eligible for inclusion in low-income energy conservation programs no later than March 15, 
22.27 	2022.
22.28 	(h) A Healthy AIR (Asbestos Insulation Removal) account is established as a separate 
22.29 	account in the special revenue fund in the state treasury. A consumer-owned utility may 
22.30 	elect to contribute money to the Healthy AIR account to provide preweatherization measures 
22.31 	for households eligible for weatherization assistance from the state weatherization assistance 
22.32 	program in section 216C.264. Remediation activities must be executed in conjunction with 
22.33 	federal weatherization assistance program services. Money contributed to the account by a 
22.34 	consumer-owned utility counts toward: (1) the minimum low-income spending requirement 
23.1 	under paragraph (a); and (2) the cap on preweatherization measures under paragraph (f). 
23.2 	Money in the account is annually appropriated to the commissioner of commerce to pay for 
23.3 	Healthy AIR-related activities.
23.4 	(i) This paragraph applies to a consumer-owned utility that supplies electricity to a 
23.5 	low-income household whose primary heating fuel is supplied by an entity other than a 
23.6 	public utility. Any spending on space and water heating energy conservation improvements 
23.7 	and efficient fuel-switching by the consumer-owned utility on behalf of the low-income 
23.8 	household may be applied to the consumer owned utility's spending requirement under 
23.9 	paragraph (a). To the maximum extent possible, a consumer-owned utility providing services 
23.10 	under this paragraph must offer the services in conjunction with weatherization services 
23.11 	provided under section 216C.264.

23.12 	Sec. 10. Minnesota Statutes 2022, section 216B.2403, subdivision 8, is amended to read:
23.13 		Subd. 8.Criteria for efficient fuel-switching improvements. (a) A fuel-switching 
23.14 	improvement is deemed efficient if, applying the technical criteria established under section 
23.15 	216B.241, subdivision 1d, paragraph (e), the improvement, relative to the fuel being 
23.16 	displaced:
23.17 	(1) results in a net reduction in the amount of source energy consumed for a particular 
23.18 	use, measured on a fuel-neutral basis, using (i) the consumer-owned utility's or the utility's 
23.19 	electricity supplier's annual system average efficiency, or (ii) if the utility elects, a seasonal, 
23.20 	monthly, or more granular level of analysis for the electric utility system over the measure's 
23.21 	life;
23.22 	(2) results in a net reduction of statewide greenhouse gas emissions, as defined in section 
23.23 	216H.01, subdivision 2, over the lifetime of the improvement. For an efficient fuel-switching 
23.24 	improvement installed by an electric consumer-owned utility, the reduction in emissions 
23.25 	must be measured based on the hourly emissions profile of the consumer-owned utility or 
23.26 	the utility's electricity supplier, as reported in the most recent resource plan approved by 
23.27 	the commission under section 216B.2422. If the hourly emissions profile is not available, 
23.28 	the commissioner must develop a method consumer-owned utilities must use to estimate 
23.29 	that value using (i) the consumer-owned utility's or the utility's electricity supplier's annual 
23.30 	average emissions factor, or (ii) if the utility elects, the seasonal, monthly, or more granular 
23.31 	level of analysis for the electric utility system over the measure's life; and
23.32 	(3) is cost-effective, considering the costs and benefits from the perspective of the 
23.33 	consumer-owned utility, participants, and society; and.
24.1 	(4) is installed and operated in a manner that improves the consumer-owned utility's 
24.2 	system load factor.
24.3 	(b) For purposes of this subdivision, "source energy" means the total amount of primary 
24.4 	energy required to deliver energy services, adjusted for losses in generation, transmission, 
24.5 	and distribution, and expressed on a fuel-neutral basis.

24.6 	Sec. 11. Minnesota Statutes 2022, section 216B.241, subdivision 2, is amended to read:
24.7 		Subd. 2.Public utility; energy conservation and optimization plans. (a) The 
24.8 	commissioner may require a public utility to make investments and expenditures in energy 
24.9 	conservation improvements, explicitly setting forth the interest rates, prices, and terms under 
24.10 	which the improvements must be offered to the customers.
24.11 	(b) A public utility shall file an energy conservation and optimization plan by June 1, 
24.12 	on a schedule determined by order of the commissioner, but at least every three years. As 
24.13 	provided in subdivisions 11 to 13, plans may include programs for efficient fuel-switching 
24.14 	improvements and load management. An individual utility program may combine elements 
24.15 	of energy conservation, load management, or efficient fuel-switching. The plan must estimate 
24.16 	the lifetime energy savings and cumulative lifetime energy savings projected to be achieved 
24.17 	under the plan. A plan filed by a public utility by June 1 must be approved or approved as 
24.18 	modified by the commissioner by December 1 of that same year.
24.19 	(c) The commissioner shall evaluate the plan on the basis of cost-effectiveness and the 
24.20 	reliability of technologies employed. The commissioner's order must provide to the extent 
24.21 	practicable for a free choice, by consumers participating in an energy conservation program, 
24.22 	of the device, method, material, or project constituting the energy conservation improvement 
24.23 	and for a free choice of the seller, installer, or contractor of the energy conservation 
24.24 	improvement, provided that the device, method, material, or project seller, installer, or 
24.25 	contractor is duly licensed, certified, approved, or qualified, including under the residential 
24.26 	conservation services program, where applicable.
24.27 	(d) The commissioner may require a utility subject to subdivision 1c to make an energy 
24.28 	conservation improvement investment or expenditure whenever the commissioner finds 
24.29 	that the improvement will result in energy savings at a total cost to the utility less than the 
24.30 	cost to the utility to produce or purchase an equivalent amount of new supply of energy.
24.31 	(e) Each public utility subject to this subdivision may spend and invest annually up to 
24.32 	ten percent of the total amount spent and invested that the public utility spends and invests
24.33 	on energy conservation, efficient fuel-switching, or load management improvements under 
25.1 	this section by the public utility on research and development projects that meet the applicable 
25.2 	definition of energy conservation, efficient fuel-switching, or load management improvement.
25.3 	(f) The commissioner shall consider and may require a public utility to undertake an 
25.4 	energy conservation programor efficient fuel-switching program, subject to the requirements 
25.5 	of subdivisions 11 and 12, that is suggested by an outside source, including a political 
25.6 	subdivision, a nonprofit corporation, or community organization. In approving a proposal 
25.7 	under this paragraph, the commissioner must consider the qualifications and experience of 
25.8 	the entity proposing the program and any other criteria the commissioner deems relevant.
25.9 	(g) A public utility, a political subdivision, or a nonprofit or community organization 
25.10 	that has suggested an energy conservation program, the attorney general acting on behalf 
25.11 	of consumers and small business interests, or a public utility customer that has suggested 
25.12 	an energy conservation program and is not represented by the attorney general under section 
25.13 	8.33 may petition the commission to modify or revoke a department decision under this 
25.14 	section, and the commission may do so if it determines that the energy conservation program 
25.15 	is not cost-effective, does not adequately address the residential conservation improvement 
25.16 	needs of low-income persons, has a long-range negative effect on one or more classes of 
25.17 	customers, or is otherwise not in the public interest. The commission shall reject a petition 
25.18 	that, on its face, fails to make a reasonable argument that an energy conservation program 
25.19 	is not in the public interest.
25.20 	(h) The commissioner may order a public utility to include, with the filing of the public 
25.21 	utility's annual status report, the results of an independent audit of the public utility's 
25.22 	conservation improvement programs and expenditures performed by the department or an 
25.23 	auditor with experience in the provision of energy conservation and energy efficiency 
25.24 	services approved by the commissioner and chosen by the public utility. The audit must 
25.25 	specify the energy savings or increased efficiency in the use of energy within the service 
25.26 	territory of the public utility that is the result of the public utility's spending and investments. 
25.27 	The audit must evaluate the cost-effectiveness of the public utility's conservation programs.
25.28 	(i) The energy conservation and optimization plan of each public utility subject to this 
25.29 	section must include activities to improve energy efficiency in public schools served by the 
25.30 	utility. As applicable to each public utility, at a minimum the activities must include programs 
25.31 	to increase the efficiency of the school's lighting and heating and cooling systems, and to 
25.32 	provide for building recommissioning, building operator training, and opportunities to 
25.33 	educate students, teachers, and staff regarding energy efficiency measures implemented at 
25.34 	the school.
26.1 	(j) The commissioner may require investments or spending greater than the amounts 
26.2 	proposed in a plan filed under this subdivision or section 216C.17 for a public utility whose 
26.3 	most recent advanced forecast required under section 216B.2422 projects a peak demand 
26.4 	deficit of 100 megawatts or more within five years under midrange forecast assumptions.
26.5 	(k) A public utility filing a conservation and optimization plan that includes an efficient 
26.6 	fuel-switching program to achieve the utility's energy savings goal must, as part of the filing, 
26.7 	demonstrate by a comparison of greenhouse gas emissions between the fuels that the 
26.8 	requirements of subdivisions 11 or 12 are met, as applicable, using a full fuel-cycle energy 
26.9 	analysis.

26.10 	Sec. 12. Minnesota Statutes 2022, section 216B.241, subdivision 11, is amended to read:
26.11 		Subd. 11.Programs for efficient fuel-switching improvements; electric utilities. (a) 
26.12 	A public utility providing electric service at retail may include in the plan required under 
26.13 	subdivision 2 a proposed goal for efficient fuel-switching improvements that the utility 
26.14 	expects to achieve under the plan and the programs to implement efficient fuel-switching 
26.15 	improvements or combinations of energy conservation improvements, fuel-switching 
26.16 	improvements, and load management. For each program, the public utility must provide a 
26.17 	proposed budget, an analysis of the program's cost-effectiveness, and estimated net energy 
26.18 	and demand savings.
26.19 	(b) The department may approve proposed programs for efficient fuel-switching 
26.20 	improvements if the department determines the improvements meet the requirements of 
26.21 	paragraph (d). For fuel-switching improvements that require the deployment of electric 
26.22 	technologies, the department must also consider whether the fuel-switching improvement 
26.23 	can be operated in a manner that facilitates the integration of variable renewable energy 
26.24 	into the electric system. The net benefits from an efficient fuel-switching improvement that 
26.25 	is integrated with an energy efficiency program approved under this section may be counted 
26.26 	toward the net benefits of the energy efficiency program, if the department determines the 
26.27 	primary purpose and effect of the program is energy efficiency.
26.28 	(c) A public utility may file a rate schedule with the commission that provides for annual 
26.29 	cost recovery of reasonable and prudent costs to implement and promote efficient 
26.30 	fuel-switching programs. The utility, department, or other entity may propose, and the 
26.31 	commission may not approve, modify, or reject, a proposal for a financial incentive to 
26.32 	encourage efficient fuel-switching programs operated by a public utility providing electric 
26.33 	service approved under this subdivision. When making a decision on the financial incentive 
27.1 	proposal, the commission must apply the considerations established in section 216B.16, 
27.2 	subdivision 6c, paragraphs (b) and (c).
27.3 	(d) A fuel-switching improvement is deemed efficient if, applying the technical criteria 
27.4 	established under section 216B.241, subdivision 1d, paragraph (e), the improvement meets 
27.5 	the following criteria, relative to the fuel that is being displaced:
27.6 	(1) results in a net reduction in the amount of source energy consumed for a particular 
27.7 	use, measured on a fuel-neutral basis, using (i) the utility's annual system average efficiency, 
27.8 	or (ii) if the utility elects, a seasonal, monthly, or more granular level of analysis for the 
27.9 	electric utility system over the measure's life;
27.10 	(2) results in a net reduction of statewide greenhouse gas emissions as defined in section 
27.11 	216H.01, subdivision 2, over the lifetime of the improvement. For an efficient fuel-switching 
27.12 	improvement installed by an electric utility, the reduction in emissions must be measured 
27.13 	based on the hourly emission profile of the electric utility, using the hourly emissions profile 
27.14 	in the most recent resource plan approved by the commission under section 216B.2422
27.15 	using (i) the utility's annual average emissions factor, or (ii) if the utility elects, a seasonal, 
27.16 	monthly, or more granular level of analysis for the electric utility system over the measure's 
27.17 	life; and
27.18 	(3) is cost-effective, considering the costs and benefits from the perspective of the utility, 
27.19 	participants, and society; and.
27.20 	(4) is installed and operated in a manner that improves the utility's system load factor.
27.21 	(e) For purposes of this subdivision, "source energy" means the total amount of primary 
27.22 	energy required to deliver energy services, adjusted for losses in generation, transmission, 
27.23 	and distribution, and expressed on a fuel-neutral basis.

27.24 	Sec. 13. Minnesota Statutes 2022, section 216B.241, subdivision 12, is amended to read:
27.25 		Subd. 12.Programs for efficient fuel-switching improvements; natural gas 
27.26 	utilities. (a) As part of a public utility's plan filed under subdivision 2, a public utility that 
27.27 	provides natural gas service to Minnesota retail customers may propose one or more programs 
27.28 	to install electric technologies that reduce the consumption of natural gas by the utility's 
27.29 	retail customers as an energy conservation improvement. The commissioner may approve 
27.30 	a proposed program if the commissioner, applying the technical criteria developed under 
27.31 	section 216B.241, subdivision 1d, paragraph (e), determines that:
27.32 	(1) the electric technology to be installed meets the criteria established under section 
27.33 	216B.241, subdivision 11, paragraph (d), clauses (1) and (2); and
28.1 	(2) the program is cost-effective, considering the costs and benefits to ratepayers, the 
28.2 	utility, participants, and society.
28.3 	(b) If a program is approved by the commission under this subdivision, the public utility 
28.4 	may count the program's energy savings toward its energy savings goal under section 
28.5 	216B.241, subdivision 1c. Notwithstanding section 216B.2402, subdivision 4, efficient 
28.6 	fuel-switching achieved through programs approved under this subdivision is energy 
28.7 	conservation.
28.8 	(c) A public utility may file rate schedules with the commission that provide annual 
28.9 	cost-recovery for programs approved by the department under this subdivision, including 
28.10 	reasonable and prudent costs to implement and promote the programs.
28.11 	(d) The commission may approve, modify, or reject a proposal made by the department 
28.12 	or a utility for an incentive plan to encourage efficient fuel-switching programs approved 
28.13 	under this subdivision, applying the considerations established under section 216B.16, 
28.14 	subdivision 6c, paragraphs (b) and (c). The commission may approve a financial incentive 
28.15 	mechanism that is calculated based on the combined energy savings and net benefits that 
28.16 	the commission has determined have been achieved by a program approved under this 
28.17 	subdivision, provided the commission determines that the financial incentive mechanism 
28.18 	is in the ratepayers' interest.
28.19 	(e) A public utility is not eligible for a financial incentive for an efficient fuel-switching 
28.20 	program under this subdivision in any year in which the utility achieves energy savings 
28.21 	below one percent of gross annual retail energy sales, excluding savings achieved through 
28.22 	fuel-switching programs.

28.23 	Sec. 14. Minnesota Statutes 2023 Supplement, section 216C.08, is amended to read:
28.24 	216C.08 JURISDICTION.
28.25 	(a) The commissioner has sole authority and responsibility for the administration of 
28.26 	sections 216C.05 to 216C.30 and 216C.375 to administer this chapter. Other laws 
28.27 	notwithstanding, the authority granted to the commissioner shall supersede under this section 
28.28 	supersedes the authority given any other agency whenever overlapping, duplication, or 
28.29 	additional administrative or legal procedures might occur in the administration of sections 
28.30 	216C.05 to 216C.30 and 216C.375 administering this chapter. The commissioner shall 
28.31 	consult with other state departments or agencies in matters related to energy and shall 
28.32 	contract with them the other state departments or agencies to provide appropriate services 
28.33 	to effectuate the purposes of sections 216C.05 to 216C.30 and 216C.375 this chapter. Any 
29.1 	other department, agency, or official of this state or political subdivision thereof which 
29.2 	would in any way affect the administration or enforcement of sections 216C.05 to 216C.30
29.3 	and 216C.375 this chapter shall cooperate and coordinate all activities with the commissioner 
29.4 	to assure orderly and efficient administration and enforcement of sections 216C.05 to 
29.5 	216C.30 and 216C.375 this chapter.
29.6 	(b) The commissioner shall designate a liaison officer whose duty shall be to insure the 
29.7 	maximum possible consistency in procedures and to eliminate duplication between the 
29.8 	commissioner and the other agencies that may be involved in energy.

29.9 	Sec. 15. Minnesota Statutes 2023 Supplement, section 216C.09, is amended to read:
29.10 	216C.09 COMMISSIONER DUTIES.
29.11 	(a) The commissioner shall:
29.12 	(1) manage the department as the central repository within the state government for the 
29.13 	collection of data on energy;
29.14 	(2) prepare and adopt an emergency allocation plan specifying actions to be taken in the 
29.15 	event of an impending serious shortage of energy, or a threat to public health, safety, or 
29.16 	welfare;
29.17 	(3) undertake a continuing assessment of trends in the consumption of all forms of energy 
29.18 	and analyze the social, economic, and environmental consequences of these trends;
29.19 	(4) carry out energy conservation measures as specified by the legislature and recommend 
29.20 	to the governor and the legislature additional energy policies and conservation measures as 
29.21 	required to meet the objectives of sections 216C.05 to 216C.30 and 216C.375 this chapter;
29.22 	(5) collect and analyze data relating to present and future demands and resources for all 
29.23 	sources of energy;
29.24 	(6) evaluate policies governing the establishment of rates and prices for energy as related 
29.25 	to energy conservation, and other goals and policies of sections 216C.05 to 216C.30 and 
29.26 	216C.375 this chapter, and make recommendations for changes in energy pricing policies 
29.27 	and rate schedules;
29.28 	(7) study the impact and relationship of the state energy policies to international, national, 
29.29 	and regional energy policies;
29.30 	(8) design and implement a state program for the conservation of energy; this program 
29.31 	shall include but not be limited to, general commercial, industrial, and residential, and 
29.32 	transportation areas; such program shall also provide for the evaluation of energy systems 
30.1 	as they relate to lighting, heating, refrigeration, air conditioning, building design and 
30.2 	operation, and appliance manufacturing and operation;
30.3 	(9) inform and educate the public about the sources and uses of energy and the ways in 
30.4 	which persons can conserve energy;
30.5 	(10) dispense funds made available for the purpose of research studies and projects of 
30.6 	professional and civic orientation, which are related to either energy conservation, resource 
30.7 	recovery, or the development of alternative energy technologies which conserve 
30.8 	nonrenewable energy resources while creating minimum environmental impact;
30.9 	(11) charge other governmental departments and agencies involved in energy-related 
30.10 	activities with specific information gathering goals and require that those goals be met;
30.11 	(12) design a comprehensive program for the development of indigenous energy 
30.12 	resources. The program shall include, but not be limited to, providing technical, 
30.13 	informational, educational, and financial services and materials to persons, businesses, 
30.14 	municipalities, and organizations involved in the development of solar, wind, hydropower, 
30.15 	peat, fiber fuels, biomass, and other alternative energy resources. The program shall be 
30.16 	evaluated by the alternative energy technical activity; and
30.17 	(13) dispense loans, grants, or other financial aid from money received from litigation 
30.18 	or settlement of alleged violations of federal petroleum-pricing regulations made available 
30.19 	to the department for that purpose.
30.20 	(b) Further, the commissioner may participate fully in hearings before the Public Utilities 
30.21 	Commission on matters pertaining to rate design, cost allocation, efficient resource utilization, 
30.22 	utility conservation investments, small power production, cogeneration, and other rate issues. 
30.23 	The commissioner shall support the policies stated in section 216C.05 and shall prepare 
30.24 	and defend testimony proposed to encourage energy conservation improvements as defined 
30.25 	in section 216B.241.

30.26 	Sec. 16. Minnesota Statutes 2022, section 216C.10, is amended to read:
30.27 	216C.10 COMMISSIONER POWERS.
30.28 	(a) The commissioner may:
30.29 	(1) adopt rules under chapter 14 as necessary to carry out the purposes of sections 
30.30 	216C.05 to 216C.30 this chapter;
30.31 	(2) make all contracts under sections 216C.05 to 216C.30 this chapter and do all things 
30.32 	necessary to cooperate with the United States government, and to qualify for, accept, and 
31.1 	disburse any grant intended for the administration of sections 216C.05 to 216C.30 to 
31.2 	administer this chapter;
31.3 	(3) provide on-site technical assistance to units of local government in order to enhance 
31.4 	local capabilities for dealing with energy problems;
31.5 	(4) administer for the state, energy programs under federal law, regulations, or guidelines, 
31.6 	and coordinate the programs and activities with other state agencies, units of local 
31.7 	government, and educational institutions;
31.8 	(5) develop a state energy investment plan with yearly energy conservation and alternative 
31.9 	energy development goals, investment targets, and marketing strategies;
31.10 	(6) perform market analysis studies relating to conservation, alternative and renewable 
31.11 	energy resources, and energy recovery;
31.12 	(7) assist with the preparation of proposals for innovative conservation, renewable, 
31.13 	alternative, or energy recovery projects;
31.14 	(8) manage and disburse funds made available for the purpose of research studies or 
31.15 	demonstration projects related to energy conservation or other activities deemed appropriate 
31.16 	by the commissioner;
31.17 	(9) intervene in certificate of need proceedings before the Public Utilities Commission;
31.18 	(10) collect fees from recipients of loans, grants, or other financial aid from money 
31.19 	received from litigation or settlement of alleged violations of federal petroleum-pricing 
31.20 	regulations, which fees must be used to pay the department's costs in administering those 
31.21 	financial aids; and
31.22 	(11) collect fees from proposers and operators of conservation and other energy-related 
31.23 	programs that are reviewed, evaluated, or approved by the department, other than proposers 
31.24 	that are political subdivisions or community or nonprofit organizations, to cover the 
31.25 	department's cost in making the reviewal, evaluation, or approval and in developing additional 
31.26 	programs for others to operate.
31.27 	(b) Notwithstanding any other law, the commissioner is designated the state agent to 
31.28 	apply for, receive, and accept federal or other funds made available to the state for the 
31.29 	purposes of sections 216C.05 to 216C.30 this chapter.

31.30 	Sec. 17. Minnesota Statutes 2022, section 216C.435, subdivision 3a, is amended to read:
31.31 		Subd. 3a.Cost-effective Energy improvements. "Cost-effective Energy improvements" 
31.32 	means:
32.1 	(1) any new construction, renovation, or retrofitting of qualifying commercial real 
32.2 	property to improve energy efficiency that: (i) is permanently affixed to the property,; and 
32.3 	(ii) results in a net reduction in energy consumption without altering the principal source 
32.4 	of energy, and has been identified or greenhouse gas emissions, as documented in an energy 
32.5 	audit as repaying the purchase and installation costs in 20 years or less, based on the amount 
32.6 	of future energy saved and estimated future energy prices or emissions avoided;
32.7 	(2) any renovation or retrofitting of qualifying residential real property that is permanently 
32.8 	affixed to the property and is eligible to receive an incentive through a program offered by 
32.9 	the electric or natural gas utility that provides service under section 216B.241 to the property 
32.10 	or is otherwise determined to be a cost-effective an eligible energy improvement by the 
32.11 	commissioner under section 216B.241, subdivision 1d, paragraph (a);
32.12 	(3) permanent installation of new or upgraded electrical circuits and related equipment 
32.13 	to enable electrical vehicle charging; or
32.14 	(4) a solar voltaic or solar thermal energy system attached to, installed within, or 
32.15 	proximate to a building that generates electrical or thermal energy from a renewable energy 
32.16 	source that has been identified documented in an energy audit or renewable energy system 
32.17 	feasibility study as repaying their purchase and installation costs in 20 years or less, based 
32.18 	on the amount of future energy saved and estimated future energy prices, along with the 
32.19 	estimated amount of related renewable energy production.

32.20 	Sec. 18. Minnesota Statutes 2022, section 216C.435, subdivision 3b, is amended to read:
32.21 		Subd. 3b.Commercial PACE loan contractor. "Commercial PACE loan contractor" 
32.22 	means a person or entity that installs cost-effective energy eligible improvements financed 
32.23 	under a commercial PACE loan program.

32.24 	Sec. 19. Minnesota Statutes 2022, section 216C.435, is amended by adding a subdivision 
32.25 	to read:
32.26 		Subd. 3e.Eligible improvement. "Eligible improvement" means one or more energy 
32.27 	improvements, resiliency improvements, or water improvements made to qualifying real 
32.28 	property.

32.29 	Sec. 20. Minnesota Statutes 2022, section 216C.435, subdivision 4, is amended to read:
32.30 		Subd. 4.Energy audit. "Energy audit" means a formal evaluation of the energy 
32.31 	consumption of a building by a certified energy auditor, whose certification is approved by 
32.32 	the commissioner, for the purpose of identifying appropriate energy improvements that 
33.1 	could be made to the building and including an estimate of the length of time a specific 
33.2 	energy improvement will take to repay its purchase and installation costs, based on the 
33.3 	amount of energy saved and estimated future energy prices effective useful life, the reduction 
33.4 	of energy consumption, and the related avoided greenhouse gas emissions resulting from 
33.5 	the proposed eligible improvements.

33.6 	Sec. 21. Minnesota Statutes 2023 Supplement, section 216C.435, subdivision 8, is amended 
33.7 	to read:
33.8 		Subd. 8.Qualifying commercial real property. "Qualifying commercial real property" 
33.9 	means a multifamily residential dwelling, a commercial or industrial building, or farmland, 
33.10 	as defined in section 216C.436, subdivision 1b, that the implementing entity has determined, 
33.11 	after review of an energy audit, renewable energy system feasibility study, water 
33.12 	improvement study, resiliency improvement study, or agronomic assessment, as defined in 
33.13 	section 216C.436, subdivision 1b, can benefit from the installation of cost-effective energy
33.14 	installing eligible improvements or land and water improvements, as defined in section 
33.15 	216C.436, subdivision 1b. Qualifying commercial real property includes new construction.

33.16 	Sec. 22. Minnesota Statutes 2022, section 216C.435, subdivision 10, is amended to read:
33.17 		Subd. 10.Renewable energy system feasibility study. "Renewable energy system 
33.18 	feasibility study" means a written study, conducted by a contractor trained to perform that 
33.19 	analysis, for the purpose of determining the feasibility of installing a renewable energy 
33.20 	system in a building, including an estimate of the length of time a specific effective useful 
33.21 	life, the production of renewable energy, and any related avoided greenhouse gas emissions 
33.22 	of the proposed renewable energy system will take to repay its purchase and installation 
33.23 	costs, based on the amount of energy saved and estimated future energy prices. For a 
33.24 	geothermal energy improvement, the feasibility study must calculate net savings in terms 
33.25 	of nongeothermal energy and costs.

33.26 	Sec. 23. Minnesota Statutes 2022, section 216C.435, is amended by adding a subdivision 
33.27 	to read:
33.28 		Subd. 11a.Resiliency improvement. "Resiliency improvement" means one or more 
33.29 	installations or modifications to eligible commercial real property that are designed to 
33.30 	improve a property's resiliency by improving the eligible real property's:
33.31 	(1) structural integrity for seismic events;
33.32 	(2) indoor air quality;
34.1 	(3) durability to resist wind, fire, and flooding;
34.2 	(4) ability to withstand an electric power outage;
34.3 	(5) stormwater control measures, including structural and nonstructural measures to 
34.4 	mitigate stormwater runoff;
34.5 	(6) ability to mitigate the impacts of extreme temperatures; or
34.6 	(7) ability to mitigate greenhouse gas embodied emissions from the eligible real property.

34.7 	Sec. 24. Minnesota Statutes 2022, section 216C.435, is amended by adding a subdivision 
34.8 	to read:
34.9 		Subd. 11b.Resiliency improvement feasibility study. "Resiliency improvement 
34.10 	feasibility study" means a written study that is conducted by a contractor trained to perform 
34.11 	the analysis to: (1) determine the feasibility of installing a resiliency improvement; (2) 
34.12 	document the improved resiliency capabilities of the property; and (3) estimate the effective 
34.13 	useful life of the proposed resiliency improvements.

34.14 	Sec. 25. Minnesota Statutes 2022, section 216C.435, is amended by adding a subdivision 
34.15 	to read:
34.16 		Subd. 14.Water improvement. "Water improvement" means one or more installations 
34.17 	or modifications to qualifying commercial real property that are designed to improve water 
34.18 	efficiency or water quality by:
34.19 	(1) reducing water consumption;
34.20 	(2) improving the quality, potability, or safety of water for the qualifying property; or
34.21 	(3) conserving or remediating water, in whole or in part, on qualifying real property.

34.22 	Sec. 26. Minnesota Statutes 2022, section 216C.435, is amended by adding a subdivision 
34.23 	to read:
34.24 		Subd. 15.Water improvement feasibility study. "Water improvement feasibility study" 
34.25 	means a written study that is conducted by a contractor trained to perform the analysis to: 
34.26 	(1) determine the appropriate water improvements that could be made to the building; and 
34.27 	(2) estimate the effective useful life, the reduction of water consumption, and any 
34.28 	improvement in water quality resulting from the proposed water improvements.

35.1 	Sec. 27. Minnesota Statutes 2022, section 216C.436, subdivision 1, is amended to read:
35.2 		Subdivision 1.Program purpose and authority. An implementing entity may establish 
35.3 	a commercial PACE loan program to finance cost-effective energy, water, and resiliency
35.4 	improvements to enable owners of qualifying commercial real property to pay for the 
35.5 	cost-effective energy eligible improvements to the qualifying real property with the net 
35.6 	proceeds and interest earnings of revenue bonds authorized in this section. An implementing 
35.7 	entity may limit the number of qualifying commercial real properties for which a property 
35.8 	owner may receive program financing.

35.9 	Sec. 28. Minnesota Statutes 2023 Supplement, section 216C.436, subdivision 1b, is 
35.10 	amended to read:
35.11 		Subd. 1b.Definitions. (a) For the purposes of this section, the following terms have the 
35.12 	meanings given.
35.13 	(b) "Agronomic assessment" means a study by an independent third party that assesses 
35.14 	the environmental impacts of proposed land and water improvements on farmland.
35.15 	(c) "Farmland" means land classified as 2a, 2b, or 2c for property tax purposes under 
35.16 	section 273.13, subdivision 23.
35.17 	(d) "Land and water improvement" means:
35.18 	(1) an improvement to farmland that:
35.19 	(i) is permanent;
35.20 	(ii) results in improved agricultural profitability or resiliency;
35.21 	(iii) reduces the environmental impact of agricultural production; and
35.22 	(iv) if the improvement affects drainage, complies with the most recent versions of the 
35.23 	applicable following conservation practice standards issued by the United States Department 
35.24 	of Agriculture's Natural Resources Conservation Service: Drainage Water Management 
35.25 	(Code 554), Saturated Buffer (Code 604), Denitrifying Bioreactor (Code 605), and 
35.26 	Constructed Wetland (Code 656); or
35.27 	(2) water conservation and quality measures, which include permanently affixed 
35.28 	equipment, appliances, or improvements that reduce a property's water consumption or that 
35.29 	enable water to be managed more efficiently.
35.30 	(e) "Resiliency" means:
36.1 	(1) the ability of farmland to maintain and enhance profitability, soil health, and water 
36.2 	quality.;
36.3 	(2) the ability to mitigate greenhouse gas embodied emissions from an eligible real 
36.4 	property; or
36.5 	(3) an increase in building resilience through flood mitigation, stormwater management, 
36.6 	wildfire and wind resistance, energy storage use, or microgrid use.

36.7 	Sec. 29. Minnesota Statutes 2023 Supplement, section 216C.436, subdivision 2, is amended 
36.8 	to read:
36.9 		Subd. 2.Program requirements. A commercial PACE loan program must:
36.10 	(1) impose requirements and conditions on financing arrangements to ensure timely 
36.11 	repayment;
36.12 	(2) require an energy audit, renewable energy system feasibility study, resiliency 
36.13 	improvement study, water improvement study, or agronomic or soil health assessment to 
36.14 	be conducted on the qualifying commercial real property and reviewed by the implementing 
36.15 	entity prior to approval of the financing;
36.16 	(3) require the inspection or verification of all installations and a performance verification 
36.17 	of at least ten percent of the cost-effective energyeligible improvements or land and water 
36.18 	improvements financed by the program;
36.19 	(4) not prohibit the financing of all cost-effective energyeligible improvements or land 
36.20 	and water improvements not otherwise prohibited by this section;
36.21 	(5) require that all cost-effective energy eligible improvements or land and water 
36.22 	improvements be made to a qualifying commercial real property prior to, or in conjunction 
36.23 	with, an applicant's repayment of financing for cost-effective energy eligible improvements 
36.24 	or land and water improvements for that the qualifying commercial real property;
36.25 	(6) have cost-effective energy eligible improvements or land and water improvements 
36.26 	financed by the program performed by a licensed contractor as required by chapter 326B
36.27 	or other law or ordinance;
36.28 	(7) require disclosures in the loan document to borrowers by the implementing entity 
36.29 	of: (i) the risks involved in borrowing, including the risk of foreclosure if a tax delinquency 
36.30 	results from a default; and (ii) all the terms and conditions of the commercial PACE loan 
36.31 	and the installation of cost-effective energy eligible improvements or land and water 
36.32 	improvements, including the interest rate being charged on the loan;
37.1 	(8) provide financing only to those who demonstrate an ability to repay;
37.2 	(9) not provide financing for a qualifying commercial real property in which the owner 
37.3 	is not current on mortgage or real property tax payments;
37.4 	(10) require a petition to the implementing entity by all owners of the qualifying 
37.5 	commercial real property requesting collections of repayments as a special assessment under 
37.6 	section 429.101;
37.7 	(11) provide that payments and assessments are not accelerated due to a default and that 
37.8 	a tax delinquency exists only for assessments not paid when due;
37.9 	(12) require that liability for special assessments related to the financing runs with the 
37.10 	qualifying commercial real property; and
37.11 	(13) prior to financing any improvements to or imposing any assessment upon qualifying 
37.12 	commercial real property, require notice to and written consent from the mortgage lender 
37.13 	of any mortgage encumbering or otherwise secured by the qualifying commercial real 
37.14 	property.

37.15 	Sec. 30. Minnesota Statutes 2022, section 216C.436, subdivision 4, is amended to read:
37.16 		Subd. 4.Financing terms. Financing provided under this section must have:
37.17 	(1) a cost-weighted average maturity not exceeding the useful life of the energy eligible
37.18 	improvements installed, as determined by the implementing entity, but in no event may a 
37.19 	term exceed 20 30 years;
37.20 	(2) a principal amount not to exceed the lesser of:
37.21 	(i) the greater of 20 30 percent of the assessed value of the real property on which the 
37.22 	improvements are to be installed or 20 30 percent of the real property's appraised value, 
37.23 	accepted or approved by the mortgage lender; or
37.24 	(ii) the actual cost of installing the energy eligible improvements, including the costs of 
37.25 	necessary equipment, materials, and labor,; the costs of each related energy audit or,
37.26 	renewable energy system feasibility study, water improvement study, or resiliency 
37.27 	improvement study; and the cost of verification of installation; and
37.28 	(3) an interest rate sufficient to pay the financing costs of the program, including the 
37.29 	issuance of bonds and any financing delinquencies.

38.1 	Sec. 31. Minnesota Statutes 2022, section 216C.436, subdivision 7, is amended to read:
38.2 		Subd. 7.Repayment. An implementing entity that finances an energy eligible
38.3 	improvement under this section must:
38.4 	(1) secure payment with a lien against the qualifying commercial real property; and
38.5 	(2) collect repayments as a special assessment as provided for in section 429.101 or by 
38.6 	charter, provided that special assessments may be made payable in up to 20 30 equal annual 
38.7 	installments.
38.8 	If the implementing entity is an authority, the local government that authorized the 
38.9 	authority to act as implementing entity shall impose and collect special assessments necessary 
38.10 	to pay debt service on bonds issued by the implementing entity under subdivision 8, and 
38.11 	shall transfer all collections of the assessments upon receipt to the authority.

38.12 	Sec. 32. Minnesota Statutes 2022, section 216C.436, subdivision 8, is amended to read:
38.13 		Subd. 8.Bond issuance; repayment. (a) An implementing entity may issue revenue 
38.14 	bonds as provided in chapter 475 for the purposes of this section and section 216C.437, 
38.15 	provided the revenue bond must not be payable more than 20 30 years from the date of 
38.16 	issuance.
38.17 	(b) The bonds must be payable as to both principal and interest solely from the revenues 
38.18 	from the assessments established in subdivision 7 and section 216C.437, subdivision 28.
38.19 	(c) No holder of bonds issued under this subdivision may compel any exercise of the 
38.20 	taxing power of the implementing entity that issued the bonds to pay principal or interest 
38.21 	on the bonds, and if the implementing entity is an authority, no holder of the bonds may 
38.22 	compel any exercise of the taxing power of the local government. Bonds issued under this 
38.23 	subdivision are not a debt or obligation of the issuer or any local government that issued 
38.24 	them, nor is the payment of the bonds enforceable out of any money other than the revenue 
38.25 	pledged to the payment of the bonds.

38.26 	Sec. 33. Minnesota Statutes 2022, section 216C.436, subdivision 10, is amended to read:
38.27 		Subd. 10.Improvements; real property or fixture. A cost-effective energy An eligible
38.28 	improvement financed under a PACE loan program, including all equipment purchased in 
38.29 	whole or in part with loan proceeds under a loan program, is deemed real property or a 
38.30 	fixture attached to the real property.

39.1 	Sec. 34. ADVANCED NUCLEAR TECHNOLOGIES STUDY.
 39.2 		Subdivision 1.Definitions. For the purposes of this section, the following terms have 
39.3 	the meanings given:
39.4 	(1) "advanced nuclear reactor" means a small modular reactor or a molten sodium reactor;
39.5 	(2) "molten sodium reactor" means a nuclear fission reactor that uses a fluid fuel in the 
39.6 	form of very hot fluoride or chloride salt; and
39.7 	(3) "small modular reactor" means a nuclear fission reactor that (i) has a capacity of 300 
39.8 	megawatts or less, and (ii) can be factory assembled and transported as a unit.
39.9 		Subd. 2.Study required. (a) The commissioner of commerce must conduct a study 
39.10 	evaluating the potential costs, benefits, and impacts of advanced nuclear reactors operating 
39.11 	in Minnesota.
39.12 	(b) At a minimum, the study must analyze the impacts the operation of advanced nuclear 
39.13 	reactors have on:
39.14 	(1) air emissions from electric generating facilities in Minnesota;
39.15 	(2) retail electricity prices;
39.16 	(3) reliability of Minnesota's electric grid;
39.17 	(4) the state's air resources, water resources, land resources, and public health, including 
39.18 	the impact of any waste material generated by the reactors;
39.19 	(5) new employment opportunities for Minnesota workers;
39.20 	(6) local economic development;
39.21 	(7) Minnesota's eligible energy technology standard under Minnesota Statutes, section 
39.22 	216B.1691, subdivision 2a; and
39.23 	(8) Minnesota's carbon-free standard under Minnesota Statutes, section 216B.1691, 
39.24 	subdivision 2g.
39.25 	(c) The study must also identify Minnesota statutes and administrative rules that would 
39.26 	require modifications in order to enable the construction and operation of advanced nuclear 
39.27 	reactors.
39.28 	(d) The study must evaluate the technologies and methods most likely to minimize the 
39.29 	environmental impacts of nuclear waste and the costs of managing nuclear waste.
40.1 		Subd. 3.Report. The commissioner of commerce must submit the results of the study 
40.2 	under subdivision 2 to the chairs and ranking minority members of the legislative committees 
40.3 	having jurisdiction over energy finance and policy no later than January 31, 2025.

40.4 	Sec. 35. THERMAL ENERGY NETWORK DEPLOYMENT WORK GROUP.
 40.5 		Subdivision 1.Direction. The Public Utilities Commission must establish and appoint 
40.6 	a thermal energy network deployment work group to examine the potential regulatory 
40.7 	opportunities for regulated natural gas utilities to deploy thermal energy networks and 
40.8 	potential barriers to development. The work group must examine the public benefits, costs, 
40.9 	and impacts of deployment of thermal energy networks, as well as examine rate design 
40.10 	options.
40.11 		Subd. 2.Membership. (a) The work group consists of at least the following:
40.12 	(1) representatives of the Department of Commerce;
40.13 	(2) representatives of the Department of Health;
40.14 	(3) representatives of the Pollution Control Agency;
40.15 	(4) representatives of the Department of Natural Resources;
40.16 	(5) representatives of the Office of the Attorney General;
40.17 	(6) representatives from utilities;
40.18 	(7) representatives from clean energy advocacy organizations;
40.19 	(8) representatives from labor organizations;
40.20 	(9) geothermal technology providers;
40.21 	(10) representatives from consumer protection organizations;
40.22 	(11) representatives from cities; and
40.23 	(12) representatives from low-income communities.
40.24 	(b) The executive director may invite others to participate in one or more meetings of 
40.25 	the work group.
40.26 		Subd. 3.Duties. The work group must prepare a report containing findings and 
40.27 	recommendations regarding how to deploy thermal energy networks within a regulated 
40.28 	context in a manner that protects the public interest and considers reliability, affordability, 
40.29 	environmental impacts, and socioeconomic impacts.
41.1 		Subd. 4.Report to legislature. The work group must submit a report detailing the work 
41.2 	group's findings and recommendations to the chairs and ranking minority members of the 
41.3 	legislative committees and divisions with jurisdiction over energy policy and finance by 
41.4 	December 31, 2025. The work group terminates the day after the report under this subdivision 
41.5 	is submitted.
41.6 		Subd. 5.Notice and comment period. The executive secretary of the Public Utilities 
41.7 	Commission must file the completed report in Public Utilities Commission Docket No. 
41.8 	G-999/CI-21-565 and provide notice to all docket participants and other interested persons 
41.9 	that comments on the findings and recommendations may be filed in the docket.
41.10 		Subd. 6.Definition. For the purposes of this section, "thermal energy network" means 
41.11 	a project that provides heating and cooling to multiple buildings connected via underground 
41.12 	piping containing fluids that, in concert with heat pumps, exchange thermal energy from 
41.13 	the earth and underground or surface waters.

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

41.15 	Sec. 36. THERMAL ENERGY NETWORK SITE SUITABILITY STUDY.
 41.16 	(a) The Department of Commerce must conduct or contract for a study to determine the 
41.17 	suitability of sites to deploy thermal energy networks statewide.
41.18 	(b) The study must:
41.19 	(1) identify areas more and less suitable for deployment of thermal energy networks 
41.20 	statewide; and
41.21 	(2) identify potential barriers to thermal energy networks and potential ways to address 
41.22 	the barriers.
41.23 	(c) In determining site suitability, the study must consider:
41.24 	(1) geologic or hydrologic access to thermal storage;
41.25 	(2) existing built environment, including but not limited to age, density, building uses, 
41.26 	existing heating and cooling systems, and existing electrical services;
41.27 	(3) the condition of existing natural gas infrastructure;
41.28 	(4) road and street conditions, including planned replacement or maintenance;
41.29 	(5) local land use regulation;
41.30 	(6) area permitting requirements; and
42.1 	(7) whether the area is an environmental justice area, as defined in Minnesota Statutes, 
42.2 	section 116.065, subdivision 1, paragraph (e).
42.3 	(c) No later than January 15, 2026, the Department of Commerce must submit a written 
42.4 	report documenting the study's findings to the chairs and ranking minority members of the 
42.5 	senate and house of representatives committees with jurisdiction over energy policy and 
42.6 	finance.