1.1 	A bill for an act
1.2 	relating to energy; establishing and modifying provisions related to petroleum, 
1.3 	thermal energy network service, solar, and other energy policy; establishing the 
1.4 	supplemental energy assistance grant program; establishing a supplemental budget 
1.5 	for energy and renewable energy purposes; requiring reports;amending Minnesota 
1.6 	Statutes 2024, sections 115C.08, subdivision 4; 115C.09, by adding a subdivision; 
1.7 	216C.02, subdivision 1; 216C.05, subdivision 1; 216C.377, subdivisions 10, 13; 
1.8 	216C.391, subdivisions 6, 7; 216C.441, subdivisions 3, 4, by adding a subdivision; 
1.9 	216C.46, subdivision 3; Minnesota Statutes 2025 Supplement, section 216B.16, 
1.10 	subdivision 15; proposing coding for new law in Minnesota Statutes, chapters 
1.11 	216B; 216C.
1.12 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.13 	ARTICLE 1
1.14 	ENERGY FINANCE AND POLICY

1.15 	Section 1. Minnesota Statutes 2024, section 115C.08, subdivision 4, is amended to read:
1.16 		Subd. 4.Expenditures. (a) Money in the fund may only be spent:
1.17 	(1) to administer the petroleum tank release cleanup program established in this chapter;
1.18 	(2) for agency administrative costs under sections 116.46 to 116.50, sections 115C.03
1.19 	to 115C.06, and costs of corrective action taken by the agency under section 115C.03, 
1.20 	including investigations;
1.21 	(3) for costs of recovering expenses of corrective actions under section 115C.04;
1.22 	(4) for training, certification, and rulemaking under sections 116.46 to 116.50;
2.1 	(5) for agency administrative costs of enforcing rules governing the construction, 
2.2 	installation, operation, and closure of aboveground and underground petroleum storage 
2.3 	tanks;
2.4 	(6) for reimbursement of the environmental response, compensation, and compliance 
2.5 	account under subdivision 5 and section 115B.26, subdivision 4;
2.6 	(7) for administrative and staff costs as set by the board to administer the petroleum tank 
2.7 	release program established in this chapter;
2.8 	(8) for corrective action performance audits under section 115C.093;
2.9 	(9) for contamination cleanup grants, as provided in paragraph (c);
2.10 	(10) to assess and remove abandoned underground storage tanks under section 115C.094
2.11 	and, if a release is discovered, to pay for the specific consultant and contractor services 
2.12 	costs necessary to complete the tank removal project, including, but not limited to, excavation 
2.13 	soil sampling, groundwater sampling, soil disposal, and completion of an excavation report; 
2.14 	and
2.15 	(11) to acquire interests in real or personal property, including easements, environmental 
2.16 	covenants under chapter 114E, and leases, that the agency determines are necessary for 
2.17 	corrective actions or to ensure the protectiveness of corrective actions. A donation of an 
2.18 	interest in real property to the agency is not effective until the agency executes a certificate 
2.19 	of acceptance. The state is not liable under this chapter solely as a result of acquiring an 
2.20 	interest in real property under this clause. Agency approval of an environmental covenant 
2.21 	under chapter 114E is sufficient evidence of acceptance of an interest in real property when 
2.22 	the agency is expressly identified as a holder in the covenant. Acquisition of real property 
2.23 	under this clause, except environmental covenants under chapter 114E, is subject to approval 
2.24 	by the board.; and
2.25 	(12) to partially reimburse the cost of replacing pressurized single-walled steel piping 
2.26 	related equipment in underground petroleum storage tank systems under section 115C.09, 
2.27 	subdivision 3l.
2.28 	(b) Except as provided in paragraph (c), money in the fund is appropriated to the board 
2.29 	to make reimbursements or payments under this section.
2.30 	(c) In fiscal years 2010 and 2011, $3,700,000 is annually appropriated from the fund to 
2.31 	the commissioner of employment and economic development for contamination cleanup 
2.32 	grants under section 116J.554. Beginning in fiscal year 2012 and each year thereafter, 
2.33 	$6,200,000 is annually appropriated from the fund to the commissioner of employment and 
3.1 	economic development for contamination cleanup grants under section 116J.554. Of this 
3.2 	amount, the commissioner may spend up to $225,000 annually for administration of the 
3.3 	contamination cleanup grant program. The appropriation does not cancel and is available 
3.4 	until expended. The appropriation shall not be withdrawn from the fund nor the fund balance 
3.5 	reduced until the funds are requested by the commissioner of employment and economic 
3.6 	development. The commissioner shall schedule requests for withdrawals from the fund to 
3.7 	minimize the necessity to impose the fee authorized by subdivision 2. Unless otherwise 
3.8 	provided, the appropriation in this paragraph may be used for:
3.9 	(1) project costs at a qualifying site if a portion of the cleanup costs are attributable to 
3.10 	petroleum contamination or new and used tar and tar-like substances, including but not 
3.11 	limited to bitumen and asphalt, but excluding bituminous or asphalt pavement, that consist 
3.12 	primarily of hydrocarbons and are found in natural deposits in the earth or are distillates, 
3.13 	fractions, or residues from the processing of petroleum crude or petroleum products as 
3.14 	defined in section 296A.01; and
3.15 	(2) the costs of performing contamination investigation if there is a reasonable basis to 
3.16 	suspect the contamination is attributable to petroleum or new and used tar and tar-like 
3.17 	substances, including but not limited to bitumen and asphalt, but excluding bituminous or 
3.18 	asphalt pavement, that consist primarily of hydrocarbons and are found in natural deposits 
3.19 	in the earth or are distillates, fractions, or residues from the processing of petroleum crude 
3.20 	or petroleum products as defined in section 296A.01.

3.21 	Sec. 2. Minnesota Statutes 2024, section 115C.09, is amended by adding a subdivision to 
3.22 	read:
3.23 		Subd. 3l.Reimbursement; single-walled steel piping. (a) For the purposes of this 
3.24 	subdivision, the following terms have the meanings given:
3.25 	(1) "eligible equipment" means all equipment between the underground petroleum storage 
3.26 	tank and the dispenser, including piping, probes, monitors, pumps, containment, and electrical 
3.27 	equipment to support the equipment. Eligible equipment does not include underground 
3.28 	petroleum storage tanks, dispensers, canopies, site improvements, or signage replacement;
3.29 	(2) "eligible location" means an underground petroleum storage tank system that is 
3.30 	located in Minnesota, has pressurized single-walled steel piping, and was installed before 
3.31 	the effective date of this subdivision; and
4.1 	(3) "qualified person" means someone who is registered as a contractor under sections 
4.2 	115C.11 to 115C.12 and, as part of the person's trade or business, installs or repairs 
4.3 	pressurized underground petroleum storage tank systems.
4.4 	(b) Notwithstanding any other provision of this chapter or any rules adopted under this 
4.5 	chapter, for replacement projects beginning after January 1, 2027, the board must reimburse 
4.6 	an owner 50 percent of the cost of replacing existing eligible equipment at eligible locations 
4.7 	with eligible equipment that meets all current applicable federal and Minnesota regulations 
4.8 	and standards, provided that:
4.9 	(1) the owner considered at least two bids and selected the bid with the lowest total cost; 
4.10 	and
4.11 	(2) the board determines that the costs incurred were reasonable.
4.12 	(c) The board must not reimburse costs that the board determines were unreasonable.
4.13 	(d) Reimbursement under paragraph (b) must not exceed $100,000 per eligible location.
4.14 	(e) The maximum annual expenditure from the fund established under section 115C.08 
4.15 	for purposes of this subdivision must not exceed $4,000,000.
4.16 	(f) An owner that owns or operates multiple eligible locations must not receive 
4.17 	reimbursement for more than two eligible locations per calendar year.
4.18 	(g) An owner may be reimbursed for the costs of:
4.19 	(1) all eligible equipment;
4.20 	(2) labor completed by a qualified person and associated with eligible equipment 
4.21 	installation;
4.22 	(3) labor completed by a qualified person and associated with dirt and concrete work 
4.23 	directly associated with installing eligible equipment; and
4.24 	(4) permits, freight, and shipping directly related to eligible equipment.
4.25 	(h) Nothing in this subdivision prohibits an owner from receiving reimbursement from 
4.26 	other sources for costs that are not reimbursed under this subdivision.
4.27 	(i) This subdivision expires June 30, 2037.

5.1 	Sec. 3. Minnesota Statutes 2025 Supplement, section 216B.16, subdivision 15, is amended 
5.2 	to read:
5.3 		Subd. 15.Low-income affordability programs. (a) The commission must consider 
5.4 	ability to pay as a factor in setting utility rates and may establish affordability programs for 
5.5 	low-income residential ratepayers in order to ensure affordable, reliable, and continuous 
5.6 	service to low-income utility customers. A public utility serving low-income residential 
5.7 	ratepayers who use natural gas or service from a thermal energy network, as defined in 
5.8 	section 216B.2427, subdivision 1, for heating must file an affordability program with the 
5.9 	commission.
5.10 	(b) Any affordability program the commission orders a utility to implement must:
5.11 	(1) lower the percentage of income that participating low-income households devote to 
5.12 	energy bills;
5.13 	(2) increase participating customer payments over time by increasing the frequency of 
5.14 	payments;
5.15 	(3) decrease or eliminate participating customer arrears;
5.16 	(4) lower the utility costs associated with customer account collection activities; and
5.17 	(5) coordinate the program with other available low-income bill payment assistance and 
5.18 	conservation resources.
5.19 	(c) In ordering affordability programs, the commission may require public utilities to 
5.20 	file program evaluations that measure the effect of the affordability program on:
5.21 	(1) the percentage of income that participating households devote to energy bills;
5.22 	(2) service disconnections; and
5.23 	(3) frequency of customer payments, utility collection costs, arrearages, and bad debt.
5.24 	(d) The commission must issue orders necessary to implement, administer, and evaluate 
5.25 	affordability programs, and to allow a utility to recover program costs, including 
5.26 	administrative costs, on a timely basis. The commission may not allow a utility to recover 
5.27 	administrative costs, excluding start-up costs, in excess of five percent of total program 
5.28 	costs, or program evaluation costs in excess of two percent of total program costs. The 
5.29 	commission must permit deferred accounting, with carrying costs, for recovery of program 
5.30 	costs incurred during the period between general rate cases.
5.31 	(e) Public utilities may use information collected or created for the purpose of 
5.32 	administering energy assistance to administer affordability programs.

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

6.2 	Sec. 4. [216B.2413] PLUG-IN SOLAR PHOTOVOLTAIC DEVICE.
6.3 		Subdivision 1.Definitions. (a) "Electric utility" means a public utility, cooperative 
6.4 	electric association, or municipal utility that provides electric service at retail to customers 
6.5 	in Minnesota.
6.6 	(b) "Energy storage system" has the meaning given in section 216B.2422, subdivision 
6.7 	1.
6.8 	(c) "Photovoltaic device" has the meaning given in section 216C.06, subdivision 16.
6.9 	(d) "Plug-in solar photovoltaic device" means a portable photovoltaic device that:
6.10 	(1) is intended primarily to offset a portion of a customer's electricity consumption;
6.11 	(2) has a maximum power output of 1,200 watts;
6.12 	(3) is capable of being connected with an on-site energy storage system; and
6.13 	(4) is listed or certified to UL 3700 as compliant with the requirements for interactive 
6.14 	plug-in photovoltaic equipment and systems.
6.15 	(e) "UL 3700" means a standard that is compliant with the National Electric Code and 
6.16 	was developed by Underwriters Laboratories, a testing laboratory that is recognized under 
6.17 	the federal Occupational Safety and Health Agency's Nationally Recognized Testing 
6.18 	Laboratory program to certify photovoltaic equipment and systems.
6.19 		Subd. 2.Exemptions. (a) A plug-in solar photovoltaic device is exempt from:
6.20 	(1) a requirement to enter into an interconnection agreement with an electric utility;
6.21 	(2) the net metering provisions under section 216B.164; and
6.22 	(3) an electric utility's establishment of any fee, condition, required approval, or reporting 
6.23 	requirement, except as specified in subdivision 3, on its installation or operation.
6.24 	(b) An electric utility is not liable for damage or injury caused by a plug-in solar 
6.25 	photovoltaic device.
6.26 		Subd. 3.Registration. An electric utility may require a customer to register a plug-in 
6.27 	solar photovoltaic device installed by the customer and provide the following information:
6.28 	(1) the customer's name and contact information;
6.29 	(2) the customer's service address and utility account number;
7.1 	(3) the brand and model of the plug-in solar photovoltaic device; and
7.2 	(4) the size of the plug-in solar photovoltaic device in kilowatts.
7.3 		Subd. 4.Installation. A customer must install a plug-in solar photovoltaic device 
7.4 	according to the manufacturer's installation instructions.

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

7.6 	Sec. 5. [216B.2429] THERMAL ENERGY NETWORKS.
7.7 		Subdivision 1.Definitions. For the purposes of this section, "thermal energy network" 
7.8 	or "TEN" has the meaning given in section 216B.2427, subdivision 1.
7.9 		Subd. 2.Thermal energy network service. A public utility may offer service by a 
7.10 	thermal energy network.
7.11 		Subd. 3.Cost recovery. A public utility must, subject to commission review and 
7.12 	approval, recover reasonable and prudently incurred costs of implementing an approved 
7.13 	TEN in a general rate case or, before December 31, 2036, in a thermal energy network 
7.14 	service rider.
7.15 		Subd. 4.TEN consumer protection. A utility's provision of service by a TEN is subject 
7.16 	to the same laws, protections, and commission authority to which a utility's provision of 
7.17 	natural gas service is subject under this chapter.
7.18 		Subd. 5.TEN siting; priorities. In assessing locations at which to site a TEN, a utility 
7.19 	must give preference to an area:
7.20 	(1) whose residents have expressed a desire to have a TEN installed;
7.21 	(2) whose characteristics resemble those of an area in which a successful TEN was 
7.22 	completed under a natural gas innovation plan filed under section 216B.2427; or
7.23 	(3) that includes or is within an environmental justice area, as defined in section 116.065, 
7.24 	subdivision 1, paragraph (e).

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

7.26 	Sec. 6. Minnesota Statutes 2024, section 216C.02, subdivision 1, is amended to read:
7.27 		Subdivision 1.Powers. (a) The commissioner may:
7.28 	(1) apply for, receive, and spend money received from federal, municipal, county, 
7.29 	regional, and other government agencies and private sources;
8.1 	(2) apply for, accept, and disburse grants and other aids from public and private sources;
8.2 	(3) contract for professional services if work or services required or authorized to be 
8.3 	carried out by the commissioner cannot be satisfactorily performed by employees of the 
8.4 	department or by another state agency;
8.5 	(4) enter into interstate or intrastate partnerships or compacts to carry out research and 
8.6 	planning jointly with other states or the federal government, private entities, or 
8.7 	nongovernmental organizations when appropriate;
8.8 	(5) upon reasonable request, distribute informational material at no cost to the public; 
8.9 	and
8.10 	(6) enter into contracts for the performance of the commissioner's duties with federal, 
8.11 	state, regional, metropolitan, local, and other agencies or units of government and educational 
8.12 	institutions, including the University of Minnesota, without regard to the competitive bidding 
8.13 	requirements of chapters 16A and 16C.
8.14 	(b) The commissioner shall collect information on conservation and other energy-related 
8.15 	programs carried on by other agencies, by public utilities, by cooperative electric associations, 
8.16 	by municipal power agencies, by other fuel suppliers, by political subdivisions, and by 
8.17 	private organizations. Other agencies, cooperative electric associations, municipal power 
8.18 	agencies, and political subdivisions shall cooperate with the commissioner by providing 
8.19 	information requested by the commissioner. The commissioner may by rule require the 
8.20 	submission of information by other program operators. The commissioner shall make the 
8.21 	information available to other agencies and to the public and, as necessary, shall recommend 
8.22 	to the legislature changes in the laws governing conservation and other energy-related 
8.23 	programs to ensure that:
8.24 	(1) expenditures on the programs are adequate to meet identified needs;
8.25 	(2) the needs of low-income energy users are being adequately addressed;
8.26 	(3) duplication of effort is avoided or eliminated;
8.27 	(4) a program that is ineffective is improved or eliminated; and
8.28 	(5) voluntary efforts are encouraged through incentives for their operators.
8.29 	(c) By January 15 of each year, the commissioner shall report to the legislature on the 
8.30 	projected amount of federal money likely to be available to the state during the next fiscal 
8.31 	year, including grant money and money received by the state as a result of litigation or 
8.32 	settlements of alleged violations of federal petroleum-pricing regulations. The report must 
9.1 	also estimate the amount of money projected as needed during the next fiscal year to finance 
9.2 	a level of conservation and other energy-related programs adequate to meet projected needs, 
9.3 	particularly the needs of low-income persons and households, and must recommend the 
9.4 	amount of state appropriations needed to cover the difference between the projected 
9.5 	availability of federal money and the projected needs.

9.6 	Sec. 7. Minnesota Statutes 2024, section 216C.05, subdivision 1, is amended to read:
9.7 		Subdivision 1.Energy planning. The legislature finds and declares that continued 
9.8 	growth in demand for energy will cause severe social and economic dislocations, and that 
9.9 	the state has a vital interest in providing for: increased efficiency in energy consumption, 
9.10 	the development and use of renewable energy resources wherever possible, a secure and 
9.11 	resilient energy system infrastructure, and the creation of an effective energy forecasting, 
9.12 	planning, and education program.
9.13 	The legislature further finds and declares that the protection of life, safety, and financial 
9.14 	security for citizens during an energy crisis is of paramount importance.
9.15 	Therefore, the legislature finds that it is in the public interest to review, analyze, and 
9.16 	encourage those energy programs that will minimize the need for annual increases in fossil 
9.17 	fuel consumption by 1990 and the need for additional electrical generating plants electric 
9.18 	generation, distribution, and storage, and provide for an optimum combination of energy 
9.19 	sources and energy conservation consistent with environmental protection and the protection 
9.20 	of citizens.
9.21 	The legislature further finds that maintaining an energy security plan that addresses (1) 
9.22 	all sources of regulated and unregulated energy, (2) a statewide risk assessment, (3) an 
9.23 	all-hazards threat assessment, (4) analysis of cross-sector critical infrastructure 
9.24 	interdependencies, (5) risk mitigation strategies, and (6) multistate and regional coordination 
9.25 	is in the public interest. The responsibilities pursuant to the energy security plan must be 
9.26 	executed under a planning, preparedness, and response framework, and in consultation with 
9.27 	state agencies, local units of government, energy providers, community-based organizations, 
9.28 	and others as appropriate.
9.29 	The legislature intends to monitor, through energy policy planning and implementation, 
9.30 	the transition from historic growth in energy demand to a period when demand for traditional 
9.31 	fuels becomes stable and the supply of renewable energy resources is readily available and 
9.32 	adequately utilized.
10.1 	The legislature further finds that for economic growth, environmental improvement, 
10.2 	and protection of citizens, it is in the public interest to encourage those energy programs
10.3 	and planning processes that will provide an optimum combination of energy resources, 
10.4 	including energy savings.
10.5 	Therefore, the legislature, through its committees, must monitor and evaluate progress 
10.6 	toward greater reliance on cost-effective energy efficiency and renewable energy and lesser 
10.7 	dependence on fossil fuels in order to reduce the economic burden of fuel imports, diversify 
10.8 	utility-owned and consumer-owned energy resources, reduce utility costs for businesses 
10.9 	and residents, improve the competitiveness and profitability of Minnesota businesses,
10.10 	increase energy security, create more energy-related jobs that contribute to the Minnesota 
10.11 	economy, and reduce pollution and emissions that cause climate change.

10.12 	Sec. 8. Minnesota Statutes 2024, section 216C.377, subdivision 10, is amended to read:
10.13 		Subd. 10.Application deadline. An application must not be submitted under this section 
10.14 	after June 30, 2026 2028.

10.15 	EFFECTIVE DATE. This section is effective June 1, 2026.

10.16 	Sec. 9. Minnesota Statutes 2024, section 216C.377, subdivision 13, is amended to read:
10.17 		Subd. 13.Reporting. Beginning January 15, 2025, and each year thereafter until January 
10.18 	15, 2027 2029, the commissioner must report to the chairs and ranking minority members 
10.19 	of the legislative committees with jurisdiction over energy finance and policy regarding 
10.20 	grants and amounts awarded to local units of government under this section during the 
10.21 	previous year and any remaining balances available in the account established under this 
10.22 	section.

10.23 	Sec. 10. Minnesota Statutes 2024, section 216C.391, subdivision 6, is amended to read:
10.24 		Subd. 6.Grant awards; administration. (a) An eligible entity seeking a grant award 
10.25 	under subdivision 3 or an entity seeking a grant award under subdivision 4 must submit an 
10.26 	application to the commissioner on a form prescribed by the commissioner. The 
10.27 	commissioner is responsible for receiving and reviewing grant applications and awarding 
10.28 	grants under this section, and shall develop administrative procedures governing the 
10.29 	application, evaluation, and award process. The commissioner may not make a grant award 
10.30 	under this section unless the commissioner has determined, and has notified the applicant 
10.31 	in writing, that the application is complete. In awarding grants under this section, the 
10.32 	commissioner shall endeavor to make awards to applicants from all regions of the state.
11.1 	(b) The department must provide technical assistance to applicants. Applicants may also 
11.2 	receive grant development assistance at no cost from entities awarded grants for that purpose 
11.3 	under subdivision 4.
11.4 	(c) Within ten business days of determining a grant award amount to an applicant, the 
11.5 	commissioner must:
11.6 	(1) reserve that amount for that specific grant in the state competitiveness fund account; 
11.7 	and
11.8 	(2) notify the Legislative Advisory Commission in writing of the reserved amount, the 
11.9 	name of the applicant, the purpose of the project, and the unreserved balance of funds 
11.10 	remaining in the account.
11.11 	(d) Reserved funds are committed to the grant and use specified in the notice provided 
11.12 	under paragraph (c) and are unavailable for reservation or appropriation for other applications 
11.13 	unless and until the commissioner receives written notice from the applicant that the 
11.14 	application for federal funds has been withdrawn or from the federal grantor that the 
11.15 	application for which funds from the account were reserved has been denied federal funds.
11.16 	(e) Reserved funds may only be expended upon presentation of written notice from the 
11.17 	federal grantor to the commissioner stating that the applicant will receive federal funds for 
11.18 	the project described in the application. If the amount of federal funds awarded to an applicant 
11.19 	differs from the amount requested in the application, the commissioner may adjust the award 
11.20 	made under this section accordingly. Notwithstanding sections 16B.98, subdivisions 5 and 
11.21 	7, and 16C.05, a reimbursement may cover cost-sharing expenses incurred after the start of 
11.22 	the federal award agreement but before the date the contract with the state of Minnesota is 
11.23 	effective, to ensure the applicant's compliance with federal award schedule requirements.
11.24 	(f) Reserved funds must be made for projects that demonstrate they will help meet the 
11.25 	state's clean energy and energy-related climate goals through renewable energy development, 
11.26 	energy conservation, efficiency, or energy-related greenhouse gas reduction benefits.
11.27 	(g) The commissioner must notify the chairs and ranking minority members of the 
11.28 	legislative committees with jurisdiction over energy finance when the unreserved balance 
11.29 	of the competitiveness fund account reaches the following amounts: 50 percent, unreserved; 
11.30 	25 percent, unreserved; 15 percent, unreserved; and five percent. The notification must be 
11.31 	within ten days after each level of unreserved balance is reached.

12.1 	Sec. 11. Minnesota Statutes 2024, section 216C.391, subdivision 7, is amended to read:
12.2 		Subd. 7.Report; audit. Beginning February 15, 2024, and each By February 15 thereafter
12.3 	each year until February 15, 2035, the commissioner must submit a written report to the 
12.4 	chairs and ranking minority members of the legislative committees with jurisdiction over 
12.5 	energy finance on the activities taken and expenditures made under this section. The report 
12.6 	must, at a minimum, include the following information for the most recent calendar year:
12.7 	(1) the number of applications for grants filed with the commissioner and the total amount 
12.8 	of grant funds requested;
12.9 	(2) each grant awarded;
12.10 	(3) the number of additional personnel hired for the purposes of this section;
12.11 	(4) expenditures on activities conducted under this section, reported separately for these 
12.12 	areas:
12.13 	(i) the provision of technical assistance;
12.14 	(ii) grants made under subdivision 4 to entities to assist applicants with grant 
12.15 	development;
12.16 	(iii) application review and evaluation, including applicants that were denied federal or 
12.17 	state grant awards and the reason for the denial;
12.18 	(iv) information technology activities; and
12.19 	(v) other expenditures;
12.20 	(5) the unreserved balance remaining in the state competitiveness fund account;
12.21 	(6) a copy of a financial audit of the department's expenditures under this section for the 
12.22 	previous fiscal year, conducted by an independent auditor;
12.23 	(7) recommendations for legislation to enhance the ability of eligible entities to 
12.24 	successfully compete for federal funds;
12.25 	(8) additional available funding opportunities to obtain energy-related funding from 
12.26 	federal agencies; and
12.27 	(9) federal grant program changes that would affect the federal funds available to the 
12.28 	state and eligible applicants, including changes that would affect the required match for 
12.29 	receiving federal funds.

13.1 	Sec. 12. [216C.392] SUPPLEMENTAL ENERGY ASSISTANCE GRANT 
13.2 	PROGRAM.
13.3 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms have 
13.4 	the meanings given.
13.5 	(b) "LIHEAP" has the meaning given in section 142G.02, subdivision 59.
13.6 	(c) "Crisis grant" means a grant to a low-income household to prevent shut-off of 
13.7 	residential energy services, reinstate residential energy services, or enable delivery of 
13.8 	residential fuels.
13.9 	(d) "Primary energy grant" means a grant to help a low-income household maintain and 
13.10 	continue affordable energy service.
13.11 		Subd. 2.Establishment. A supplemental energy assistance grant program is established 
13.12 	in the department to award grants to eligible applicants. The purpose of the program is to 
13.13 	assist low-income households experiencing energy burden to pay the costs of heating, 
13.14 	cooling, and other home energy costs throughout the year.
13.15 		Subd. 3.Applications; procedures. (a) The commissioner must develop policies and 
13.16 	procedures governing the grant application and award process, and must leverage existing 
13.17 	LIHEAP application processes and infrastructure to the maximum degree practicable.
13.18 	(b) An eligible applicant must file an application with the commissioner on a form 
13.19 	developed by the commissioner. The form must be available to eligible applicants in both 
13.20 	a paper and electronic format.
13.21 		Subd. 4.Eligibility. (a) A Minnesota resident whose household income is below the 
13.22 	income eligibility threshold identified in the Minnesota LIHEAP Detailed Model Plan 
13.23 	submitted to the United States Department of Health and Human Services for the applicable 
13.24 	program year is eligible to receive a grant award under this section. If the LIHEAP Detailed 
13.25 	Model Plan is not available, the commissioner may develop a similar income eligibility 
13.26 	threshold.
13.27 	(b) An organization with experience conducting outreach for programs designed for 
13.28 	low-income households is eligible for grants awarded under subdivision 6, clause (4).
13.29 		Subd. 5.Grant awards. (a) When awarding grants under this section, the commissioner 
13.30 	may give priority to expanding the number of households receiving energy assistance over 
13.31 	increasing grant amounts to households that already received assistance under LIHEAP 
13.32 	during the same year.
14.1 	(b) To the extent practicable, available LIHEAP funds must be awarded to all eligible 
14.2 	applicants for primary energy and crisis grants before energy and crisis grants are awarded 
14.3 	under this section.
14.4 		Subd. 6.Types of grants. The commissioner may award grants under this section for:
14.5 	(1) crisis grants to households that received a LIHEAP primary energy grant from federal 
14.6 	funds but did not receive the maximum crisis grant amount while federal funds allocated 
14.7 	for crisis grants were available;
14.8 	(2) primary energy and crisis grants to eligible households that did not receive LIHEAP 
14.9 	primary energy and crisis grants from federal funds;
14.10 	(3) emergency heating system repair or replacement; and
14.11 	(4) outreach activities.
14.12 		Subd. 7.Reporting. (a) Beginning January 31, 2028, and annually thereafter until January 
14.13 	31, 2030, the commissioner must submit a report to the chairs and ranking minority members 
14.14 	of the senate and house of representatives committees with primary jurisdiction over energy 
14.15 	policy and finance that documents state supplemental energy assistance grant awards made 
14.16 	under this section during the previous program year from October 1 to September 30.
14.17 	(b) To the extent practicable, the following information on grants awarded under this 
14.18 	section must be reported by statewide total, by county, and by census tract within cities with 
14.19 	populations over 30,000:
14.20 	(1) the number of households awarded a grant;
14.21 	(2) the number of households served that did not receive a LIHEAP primary energy 
14.22 	grant;
14.23 	(3) the average primary energy grant award;
14.24 	(4) the average crisis grant award; and
14.25 	(5) average annual costs of heating and electricity for households served.
14.26 	(c) The following information on grants awarded under this section may be reported as 
14.27 	statewide totals:
14.28 	(1) the average household income of grant recipients;
14.29 	(2) a distribution of grant awards by grant recipients' household income, expressed as a 
14.30 	percentage of the federal poverty level established by the United States Department of 
14.31 	Health and Human Services;
15.1 	(3) the number of households that include a person over 60 years old;
15.2 	(4) the number of households that include a disabled person;
15.3 	(5) the number of households that include a child under six years old; and
15.4 	(6) the number of households served by race or ethnicity.
15.5 	(d) A report under this section must comply with chapter 13, including provisions 
15.6 	establishing data on individuals as not public in order to ensure the individual privacy of 
15.7 	applicants.

15.8 	Sec. 13. Minnesota Statutes 2024, section 216C.441, subdivision 3, is amended to read:
15.9 		Subd. 3.General powers. (a) For the purpose of exercising the specific powers granted 
15.10 	in this section, the authority has the general powers granted in this subdivision.
15.11 	(b) The authority may:
15.12 	(1) hire an executive director and staff to conduct the authority's operations;
15.13 	(2) sue and be sued;
15.14 	(3) have a seal and alter the seal;
15.15 	(4) acquire, hold, lease, manage, and dispose of real or personal property for the 
15.16 	authority's corporate purposes;
15.17 	(5) enter into agreements, including cooperative financing agreements, contracts, or 
15.18 	other transactions, with a Tribal government, any federal or state agency, county, local unit 
15.19 	of government, regional development commission, person, domestic or foreign partnership, 
15.20 	corporation, association, or organization;
15.21 	(6) acquire by purchase real property, or an interest therein, in the authority's own name 
15.22 	where acquisition is necessary or appropriate;
15.23 	(7) provide general technical and consultative services related to the authority's purpose;
15.24 	(8) promote research and development in matters related to the authority's purpose;
15.25 	(9) conduct market analysis to determine where the market is underserved;
15.26 	(10) analyze greenhouse gas emissions reduction project financing needs in the state 
15.27 	and recommend measures to alleviate any shortage of financing capacity;
15.28 	(11) contract with any governmental or private agency or organization, legal counsel, 
15.29 	financial advisor, investment banker, or others to assist in the exercise of the authority's 
15.30 	powers;
16.1 	(12) borrow money or other property for any purpose pertaining to the authority's 
16.2 	activities;
16.3 	(12) (13) enter into agreements with qualified lenders or others insuring or guaranteeing 
16.4 	to the state the payment of qualified loans or other financing instruments; and
16.5 	(14) sell at a public or private sale a note, mortgage, or other interest or obligation that 
16.6 	evidences or secures a loan; and
16.7 	(13) (15) accept on behalf of the state any gift, grant, or interest in money or personal 
16.8 	property tendered to the state for any purpose pertaining to the authority's activities. Money 
16.9 	received under this clause must be deposited in the account under subdivision 11.

16.10 	Sec. 14. Minnesota Statutes 2024, section 216C.441, subdivision 4, is amended to read:
16.11 		Subd. 4.Authority duties. (a) The authority must:
16.12 	(1) serve as a financial resource to reduce the upfront and total costs of implementing 
16.13 	qualified projects;
16.14 	(2) ensure that all financed projects reduce greenhouse gas emissions;
16.15 	(3) ensure that financing terms and conditions offered are well-suited to qualified projects;
16.16 	(4) strategically prioritize the use of the authority's funds to leverage private investment 
16.17 	in qualified projects, with the aim of achieving a high ratio of private to public money 
16.18 	invested through funding mechanisms that support, enhance, and complement private lending 
16.19 	and investment;
16.20 	(5) coordinate with existing federal, state, local, utility, and other programs to ensure 
16.21 	that the authority's resources are being used most effectively to add to and complement 
16.22 	those programs;
16.23 	(6) stimulate demand for qualified projects by:
16.24 	(i) contracting with the department to provide, including through subcontracts with 
16.25 	community navigators, information to project participants about federal, state, local, utility, 
16.26 	and other authority financial assistance for qualifying projects, and technical information 
16.27 	on energy conservation and renewable energy measures;
16.28 	(ii) forming partnerships with contractors and informing contractors about the authority's 
16.29 	financing programs;
16.30 	(iii) developing innovative marketing strategies to stimulate project owner interest, 
16.31 	especially in underserved communities; and
17.1 	(iv) incentivizing financing entities to increase activity in underserved markets;
17.2 	(7) finance projects in all regions of the state;
17.3 	(8) develop participant eligibility standards and other terms and conditions for financial 
17.4 	support provided by the authority;
17.5 	(9) develop and administer:
17.6 	(i) policies to collect reasonable fees for authority services; and
17.7 	(ii) risk management activities to support ongoing authority activities;
17.8 	(10) develop consumer protection standards governing the authority's investments to 
17.9 	ensure that financial support is provided responsibly and transparently and is in the financial 
17.10 	interest of participating project owners;
17.11 	(11) develop methods to accurately measure the impact of the authority's activities, 
17.12 	particularly on low-income communities and on greenhouse gas emissions reductions;
17.13 	(12) hire an executive director and sufficient staff with the appropriate skills and 
17.14 	qualifications to carry out the authority's programs, making an affirmative effort to recruit 
17.15 	and hire a director and staff who are from, or share the interests of, the communities the 
17.16 	authority must serve;
17.17 	(13) apply for, either as a direct or subgrantee applicant, and accept Greenhouse Gas 
17.18 	Reduction Fund grants authorized by the federal Clean Air Act, United States Code, title 
17.19 	42, section 7434, paragraph (a), clauses (1), (2), and (3). Until the Climate Innovation 
17.20 	Finance Authority is established, the commissioner shall apply for and receive funding 
17.21 	through Public Law 117-169 in order to leverage state investment, on behalf of the authority. 
17.22 	To the extent practicable, applications for these funds by or on behalf of the authority should 
17.23 	be made in coordination with other Minnesota applicants;
17.24 	(14) acting under its powers as a state energy financing institution under United States 
17.25 	Code, title 42, section 16511, collaborate with the United States Department of Energy Loan 
17.26 	Programs Office to ensure that authorities made available under the Inflation Reduction 
17.27 	Act of 2022, Public Law 117-169, maximally benefit Minnesotans. Until the Climate 
17.28 	Innovation Finance Authority is established, the commissioner may engage with the United 
17.29 	States Department of Energy Loan Programs Office on behalf of the authority; and
17.30 	(15) ensure that authority contracts with all third-party administrators, contractors, and 
17.31 	subcontractors contain required covenants, representations, and warranties specifying that 
17.32 	contracted third parties are agents of the authority and that all acts of contracted third parties 
18.1 	are considered acts of the authority, provided that the act is within the contracted scope of 
18.2 	work.
18.3 	(b) The authority may:
18.4 	(1) employ credit enhancement mechanisms that reduce financial risk for financing 
18.5 	entities by providing assurance that a limited portion of a loan or other financial instrument 
18.6 	is assumed by the authority via a loan loss reserve, loan guarantee, or other mechanism;
18.7 	(2) co-invest in a qualified project by providing senior or subordinated debt, equity, or 
18.8 	other mechanisms in conjunction with other investment, co-lending, or financing;
18.9 	(3) aggregate small and geographically dispersed qualified projects in order to diversify 
18.10 	risk;or
18.11 	(4) secure additional private investment through securitization or similar resale of the 
18.12 	authority's interest in a completed qualified project;
18.13 	(4) (5) expend up to 25 percent of funds appropriated to the authority for start-up 
18.14 	purposes, which may be used for financing programs and project investments authorized 
18.15 	under this section, prior to adoption of the strategic plan required under subdivision 7 and 
18.16 	the investment strategy under subdivision 8; and
18.17 	(5) (6) require a specific project to agree to implement a project labor agreement as a 
18.18 	condition of receiving financing from the authority.

18.19 	Sec. 15. Minnesota Statutes 2024, section 216C.441, is amended by adding a subdivision 
18.20 	to read:
18.21 		Subd. 4a.Liability; limitation. (a) The state is not liable on notes, loans, or other interests 
18.22 	or obligations evidencing or securing a loan entered into by the authority under this section. 
18.23 	A note, loan, or other interest or obligation securing a loan under this section is not a debt 
18.24 	of the state.
18.25 	(b) A note, loan, or other agreement or contract evidencing security for a loan entered 
18.26 	into under this section must contain a statement that clearly indicates the liability limitation 
18.27 	under paragraph (a).

18.28 	Sec. 16. Minnesota Statutes 2024, section 216C.46, subdivision 3, is amended to read:
18.29 		Subd. 3.Application. (a) An application for a rebate under this section must be made 
18.30 	to the commissioner on a form developed by the commissioner. The application must be 
18.31 	accompanied by documentation, as required by the commissioner, demonstrating that:
19.1 	(1) the applicant is an eligible applicant;
19.2 	(2) the applicant owns the Minnesota residence in which the heat pump is to be installed
19.3 	or has the signed approval from the owner of the Minnesota residence in which the heat 
19.4 	pump is to be installed;
19.5 	(3) the applicant has had an energy audit conducted of the residence in which the heat 
19.6 	pump is to be installed within the last 18 months by a person with a Building Analyst 
19.7 	Technician certification issued by the Building Performance Institute, Inc., or an equivalent 
19.8 	certification, as determined by the commissioner, heat pump, and installation meet the 
19.9 	federal Department of Energy's documentation and eligibility requirements to receive a heat 
19.10 	pump rebate under the federal Inflation Reduction Act of 2022, Public Law 117-169;
19.11 	(4) either: the applicant has accepted the potential impacts of replacing a natural gas 
19.12 	primary heating system with a heat pump in the applicant's home;
19.13 	(i) the applicant has installed in the applicant's residence, by a contractor with an Air 
19.14 	Leakage Control Installer certification issued by the Building Performance Institute, Inc., 
19.15 	or an equivalent certification, as determined by the commissioner, the amount of insulation 
19.16 	and the air sealing measures recommended by the auditor; or
19.17 	(ii) the auditor has otherwise determined that the amount of insulation and air sealing 
19.18 	measures in the residence are sufficient to enable effective heat pump performance;
19.19 	(5) the applicant has purchased a heat pump of the capacity recommended by the auditor 
19.20 	or contractor, and has had the heat pump installed by a contractor with sufficient training 
19.21 	and experience in installing heat pumps, as determined by the commissioner approved to 
19.22 	install heat pumps under comparable federal programs administered by the department 
19.23 	under the federal Inflation Reduction Act of 2022, Public Law 117-169; and
19.24 	(6) the total cost to purchase and install the heat pump in the applicant's residence.
19.25 	(b) The commissioner must develop administrative procedures governing the application 
19.26 	and rebate award processes.
19.27 	(c) The commissioner may modify program requirements under this section when 
19.28 	necessary to align with comparable federal programs administered by the department under 
19.29 	the federal Inflation Reduction Act of 2022, Public Law 117-189 117-169.

20.1 	Sec. 17. APPROPRIATION; PUBLIC UTILITIES COMMISSION.
 20.2 	$40,000 in fiscal year 2027 is appropriated from the general fund to the Public Utilities 
20.3 	Commission for thermal energy network services provided under Minnesota Statutes, section 
20.4 	216B.2429.

20.5 	Sec. 18. APPROPRIATION; DEPARTMENT OF COMMERCE.
 20.6 	(a) $15,000,000 in fiscal year 2027 is appropriated from the general fund to the 
20.7 	commissioner of commerce for the supplemental energy assistance grant program under 
20.8 	Minnesota Statutes, section 216C.392. This is a onetime appropriation and is available until 
20.9 	December 31, 2029.
20.10 	(b) Of the amount appropriated in paragraph (a):
20.11 	(1) up to 12.5 percent may be used for staffing and other costs associated with 
20.12 	administering the supplemental energy assistance grant program under Minnesota Statutes, 
20.13 	section 216C.392, including program planning and preparation, reviewing applications and 
20.14 	verifying information, and entering data into a central electronic system maintained by the 
20.15 	Department of Commerce. Of this funding, up to 2.5 percent may be used by the Department 
20.16 	of Commerce. The remaining amount allocated under this clause may be used to reimburse 
20.17 	reasonable administrative costs incurred under Minnesota Statutes, section 216C.392, by 
20.18 	service providers contracted by the Department of Commerce to deliver LIHEAP services; 
20.19 	and
20.20 	(2) up to five percent may be used to reimburse the reasonable costs incurred under 
20.21 	Minnesota Statutes, section 216C.392, by organizations the department has contracted with 
20.22 	to provide outreach and assistance to households to complete grant applications under 
20.23 	Minnesota Statutes, section 216C.392. Priority for grants awarded under this clause must 
20.24 	be given to organizations that have the ability to conduct outreach to underserved 
20.25 	communities and populations, including current service providers and other organizations.

20.26 	ARTICLE 2
20.27 	RENEWABLE DEVELOPMENT FINANCE

20.28	Section 1. RENEWABLE DEVELOPMENT FINANCE.
 	
20.29 	The sums shown in the columns marked "Appropriations" are appropriated to the agencies 
20.30 	and for the purposes specified in this article. Notwithstanding Minnesota Statutes, section 
20.31 	116C.779, subdivision 1, paragraph (j), the appropriations are from the renewable 
20.32 	development account in the special revenue fund established in Minnesota Statutes, section 
20.33 	116C.779, subdivision 1, and are available for the fiscal years indicated for each purpose. 
21.1 	The figures "2026" and "2027" used in this article mean that the appropriations listed under 
21.2 	them are available for the fiscal year ending June 30, 2026, or June 30, 2027, respectively. 
21.3 	"The first year" is fiscal year 2026. "The second year" is fiscal year 2027. "The biennium" 
21.4 	is fiscal years 2026 and 2027. The appropriations in this article are onetime.

21.5				APPROPRIATIONS
	
21.6				Available for the Year
	
21.7				Ending June 30
	
21.8					2026
		2027

21.9	Sec. 2. DEPARTMENT OF COMMERCE

21.10	Subdivision 1.Total Appropriation
 	$
	-0-
	$
	22,335,000
	
21.11 	The amounts that may be spent for each 
21.12 	purpose are specified in the following 
21.13 	subdivisions.

21.14	Subd. 2.Microgrid Research and Application
 					
21.15 	$800,000 the second year is for a grant to the 
21.16 	University of St. Thomas Center for Microgrid 
21.17 	Research, which must be used to:
21.18 	(1) increase the center's capacity to provide 
21.19 	industry partners with opportunities to test 
21.20 	near-commercial microgrid products on a 
21.21 	real-world scale and to multiply opportunities 
21.22 	for innovative research;
21.23 	(2) procure advanced equipment and controls 
21.24 	to enable the extension of the university's 
21.25 	microgrid to additional buildings; and
21.26 	(3) expand (i) hands-on educational 
21.27 	opportunities for undergraduate and graduate 
21.28 	electrical engineering students to increase 
21.29 	understanding of microgrid operations, and 
21.30 	(ii) partnerships with community colleges. 
21.31 	This appropriation is available until June 30, 
21.32 	2029.

22.1	Subd. 3.Green Hydrogen Project
 					
22.2 	$3,500,000 the second year is for a grant to 
22.3 	the city of St. Cloud for the Green Hydrogen 
22.4 	Project to incorporate a battery and renewable 
22.5 	energy system. This appropriation is available 
22.6 	until June 30, 2029.

22.7	Subd. 4.Anaerobic Digester Energy System
 					
22.8 	$5,000,000 the second year is for a grant to 
22.9 	Ramsey/Washington Recycling and Energy, 
22.10 	in partnership with Dem-Con HZI Bioenergy, 
22.11 	LLC, to construct an anaerobic digester energy 
22.12 	system in Louisville Township. For the 
22.13 	purposes of this subdivision, "anaerobic 
22.14 	digester energy system" means a facility that 
22.15 	uses diverted food and organic waste to create 
22.16 	renewable natural gas and biochar. This 
22.17 	appropriation is available until June 30, 2029.

22.18	Subd. 5.Como Zoo Geothermal Energy System
 					
22.19 	$2,250,000 the second year is for a grant to 
22.20 	Como Zoo in the city of St. Paul to construct 
22.21 	a geothermal energy system that provides 
22.22 	space heating and cooling to the large cats 
22.23 	building. For the purposes of this subdivision, 
22.24 	"geothermal energy system" means a system 
22.25 	composed of a heat pump that moves a 
22.26 	heat-transferring fluid through piping 
22.27 	embedded in the earth and absorbs the earth's 
22.28 	constant temperature, a heat exchanger, and 
22.29 	ductwork to distribute heated and cooled air 
22.30 	to a building. This appropriation is available 
22.31 	until June 30, 2029.

22.32	Subd. 6.Minnesota Energy Alley
 					
22.33 	(a) $2,000,000 the first year is for a grant to 
22.34 	Clean Energy Economy Minnesota for the 
23.1 	Minnesota Energy Alley initiative. The 
23.2 	initiative is designed to promote energy 
23.3 	innovation through supporting energy 
23.4 	entrepreneurs and emerging businesses to 
23.5 	commercialize energy solutions by matching 
23.6 	promising innovators with established and 
23.7 	trustworthy Minnesota-based public and 
23.8 	private partners to demonstrate emerging 
23.9 	technologies in real-world applications. The 
23.10 	grant may be used to provide seed funding for 
23.11 	businesses, develop a training and 
23.12 	development program, support recruitment of 
23.13 	entrepreneurs to Minnesota, and secure 
23.14 	funding from federal programs and corporate 
23.15 	partners to establish a self-sustaining, 
23.16 	long-term revenue model. This appropriation 
23.17 	is available until June 30, 2028.
23.18 	(b) By January 15, 2028, the commissioner of 
23.19 	commerce must submit a written report to the 
23.20 	chairs and ranking minority members of the 
23.21 	house of representatives and senate 
23.22 	committees with jurisdiction over energy 
23.23 	finance and policy on the activities and 
23.24 	accomplishments of the Minnesota Energy 
23.25 	Alley initiative during the previous fiscal year 
23.26 	and the disposition of this appropriation, 
23.27 	including a separate statement of the amount 
23.28 	of administrative costs.

23.29
23.30	Subd. 7.Ammonia, Hydrogen, and Renewable 
Energy Certificate Tracking
 					
23.31 	(a) $2,000,000 the second year is for a grant 
23.32 	to CleanCounts for technology that enables 
23.33 	tradable ammonia, hydrogen, and renewable 
23.34 	energy certificates.
24.1 	(b) Beginning January 1, 2027, and through 
24.2 	January 1, 2031, an entity that receives a grant 
24.3 	under this subdivision must submit a report to 
24.4 	the legislative auditor that details how the 
24.5 	grant money received has been spent.
24.6 	(c) Beginning January 1, 2031, and through 
24.7 	January 1, 2036, an entity that receives a grant 
24.8 	under this subdivision must report to the 
24.9 	commissioners of commerce and agriculture 
24.10 	regarding the number of ammonia certificates 
24.11 	issued in Minnesota as a result of the grant 
24.12 	money received.
24.13 	(d) This appropriation is available until June 
24.14 	30, 2029.

24.15	Subd. 8.Great Plains Institute
 					
24.16 	$500,000 the second year is for a grant to the 
24.17 	Great Plains Institute for work related to 
24.18 	identifying existing and future areas of the 
24.19 	state that are suitable for additional distributed 
24.20 	ammonia production and that have nearby 
24.21 	wind or other curtailed power. This 
24.22 	appropriation is available until June 30, 2029.

24.23
24.24	Subd. 9.Macalester College Geothermal Energy 
System
 					
24.25 	(a) $2,570,000 the second year is for a grant 
24.26 	to Macalester College in St. Paul to construct 
24.27 	an aquifer-based geothermal energy system 
24.28 	that provides space heating and cooling to a 
24.29 	new campus residence hall and welcome 
24.30 	center, with the capacity for future expansion 
24.31 	to serve as a district heating and cooling plant 
24.32 	for all campus buildings north of Grand 
24.33 	Avenue. This appropriation is available until 
24.34 	June 30, 2029.
25.1 	(b) For purposes of this section, "aquifer-based 
25.2 	geothermal energy system" means a system 
25.3 	composed of wells that access underground 
25.4 	aquifers, heat pumps that transfer thermal 
25.5 	energy between buildings and the aquifer, heat 
25.6 	exchangers, and associated distribution 
25.7 	infrastructure.

25.8	Subd. 10.Biomass Energy Facility
 					
25.9 	(a) $715,000 the second year is for a grant to 
25.10 	Liberty Paper, Inc. to study and plan for an 
25.11 	anaerobic digester or a biomass thermal 
25.12 	generation facility in the city of Becker. This 
25.13 	is a onetime appropriation and is available 
25.14 	until June 30, 2029.
25.15 	(b) For purposes of this section, the following 
25.16 	terms have the meanings given: (1) "anaerobic 
25.17 	digester" means a facility that uses diverted 
25.18 	food and organic waste to generate renewable 
25.19 	natural gas and biochar; (2) "biochar" means 
25.20 	a solid substance, made from burning organic 
25.21 	material, that sequesters carbon and is capable 
25.22 	of being used as a soil application; and (3) 
25.23 	"biomass thermal generation facility" means 
25.24 	a facility that generates energy for commercial 
25.25 	heat or industrial process heat from the 
25.26 	combustion of organic material.

25.27
25.28	Subd. 11.Geothermal Energy System; The 
Heights Community Energy
 					
25.29 	(a) $3,000,000 in the second year is for a grant 
25.30 	to The Heights Community Energy to 
25.31 	construct a geothermal energy system.
25.32 	(b) For purposes of this section, "geothermal 
25.33 	energy system" means a system composed of 
25.34 	one or more heat pumps connected to piping 
25.35 	embedded in the earth that exchanges thermal 
26.1 	energy with the earth and associated 
26.2 	distribution and building mechanical 
26.3 	infrastructure to provide heating and cooling 
26.4 	to one or more buildings.

26.5	Subd. 12.Grant Administration
 					
26.6 	Notwithstanding Minnesota Statutes, section 
26.7 	16B.98, subdivision 14, the commissioner may 
26.8 	use up to $250,000 of the amount in this 
26.9 	section for the administrative costs of the 
26.10 	grants in this section.

26.11	Sec. 3. UNIVERSITY OF MINNESOTA
 	$
	-0-
	$
	2,900,000
	
26.12 	(a) $1,500,000 the second year is for research, 
26.13 	development, outreach, and demonstration of 
26.14 	energy systems that use hydrogen and 
26.15 	ammonia production from renewable energy 
26.16 	resources and other sources of clean energy 
26.17 	as a means of storing and generating 
26.18 	electricity. This appropriation is available until 
26.19 	June 30, 2029.
26.20 	(b) $650,000 the second year is for the Natural 
26.21 	Resources Research Institute to evaluate the 
26.22 	state's geological hydrogen potential. The 
26.23 	evaluation must include: (1) the availability 
26.24 	of the mined hydrogen resource; (2) the 
26.25 	feasibility of extracting the hydrogen from 
26.26 	underground deposits; (3) the potential 
26.27 	groundwater management challenges; and (4) 
26.28 	cost-effective strategies for storing and 
26.29 	transporting mined hydrogen. The Natural 
26.30 	Resources Research Institute must submit the 
26.31 	evaluation and an interim report to the chairs 
26.32 	and ranking minority members of the 
26.33 	legislative committees with jurisdiction over 
27.1 	energy policy and finance by May 15, 2028, 
27.2 	and a final report by May 15, 2029.
27.3 	(c) $750,000 the second year is for the Natural 
27.4 	Resources Research Institute to evaluate new 
27.5 	feedstock resources for a globally competitive, 
27.6 	next generation iron ore industry. The study 
27.7 	must include but is not limited to 
27.8 	quantification and characterization of 
27.9 	resources related to iron ore, energy, water, 
27.10 	hydrogen, biomass, carbon materials, process 
27.11 	technologies, transportation, and 
27.12 	manufacturing infrastructure that support 
27.13 	cross-coupling of iron production with 
27.14 	industries such as liquid fuels and ammonia. 
27.15 	The Natural Resources Research Institute must 
27.16 	submit the results of the study and an interim 
27.17 	report to the chairs and ranking minority 
27.18 	members of the legislative committees with 
27.19 	jurisdiction over energy policy and finance by 
27.20 	May 15, 2028, and a final report by May 15, 
27.21 	2029.

27.22	Sec. 4. POLLUTION CONTROL AGENCY
 	$
	-0-
	$
	3,000,000
	
27.23 	$3,000,000 the second year is for a grant to 
27.24 	the owner of a biomass energy generation 
27.25 	plant in Shakopee that uses waste heat from 
27.26 	the generation of electricity in the malting 
27.27 	process to purchase equipment to facilitate the 
27.28 	disposal of wood that is infested by emerald 
27.29 	ash borer. This appropriation is available until 
27.30 	June 30, 2029. Notwithstanding Minnesota 
27.31 	Statutes, section 16B.98, subdivision 14, the 
27.32 	commissioner of the Pollution Control Agency 
27.33 	may use up to $25,000 of the amount in this 
27.34 	section for the administrative costs of this 
27.35 	grant.

28.1	Sec. 5. DEPARTMENT OF AGRICULTURE
 	$
	-0-
	$
	4,000,000
	
28.2 	$4,000,000 the second year is for a grant to 
28.3 	TalusAg for the production and operation of 
28.4 	at least two green fertilizer production systems 
28.5 	located in Minnesota. This appropriation is 
28.6 	available until June 30, 2029. Notwithstanding 
28.7 	Minnesota Statutes, section 16B.98, 
28.8 	subdivision 14, the commissioner of 
28.9 	agriculture may use up to $25,000 of the 
28.10 	amount in this section for the administrative 
28.11 	costs of this grant.

28.12	Sec. 6. PUBLIC UTILITIES COMMISSION
 	$
	-0-
	$
	300,000
	
28.13 	(a) $300,000 the second year is to contract 
28.14 	with a third party to conduct a study to inform 
28.15 	policymakers regarding the potential impact 
28.16 	of new nuclear generation on the public 
28.17 	interest of Minnesota, including affordability, 
28.18 	reliability, environmental protection, public 
28.19 	health, and equitable outcomes.
28.20 	(b) The commission must issue a competitive 
28.21 	request for proposals and contract with an 
28.22 	independent, qualified entity or consortium 
28.23 	with demonstrated expertise in relevant subject 
28.24 	matter, and with no material financial interest 
28.25 	in the expansion of nuclear generation. The 
28.26 	commission must ensure balanced 
28.27 	representation of perspectives in the study. 
28.28 	The selected entity must disclose any potential 
28.29 	conflicts of interest to the commission. If the 
28.30 	commission determines that issuing a 
28.31 	competitive request for proposals would 
28.32 	unreasonably delay completion of the study 
28.33 	within the required timeline, the commission 
28.34 	may contract on a sole-source basis, provided 
28.35 	that the selected entity meets the qualifications 
29.1 	and independence requirements under this 
29.2 	paragraph.
29.3 	(c) The study must be completed no later than 
29.4 	January 30, 2027, and must include, at a 
29.5 	minimum, discussion of:
29.6 	(1) changes in federal regulations governing 
29.7 	the licensing of nuclear-powered facilities that 
29.8 	may speed the review and approval process;
29.9 	(2) technological advances made with respect 
29.10 	to conventional nuclear-powered facilities that 
29.11 	affect safety and cost;
29.12 	(3) full lifecycle costs, including capital costs, 
29.13 	financing costs, construction risk, cost 
29.14 	overruns, decommissioning costs, waste 
29.15 	management, and long-term liability exposure 
29.16 	compared to alternative resource options. The 
29.17 	analysis must include historical evidence from 
29.18 	comparable projects in the United States and 
29.19 	internationally;
29.20 	(4) ratepayer impacts where new nuclear 
29.21 	generation has been developed, including 
29.22 	effects on electricity rates, cost and schedule 
29.23 	overruns, and the allocation of financial risk 
29.24 	between ratepayers and developers;
29.25 	(5) public finance protections such as public 
29.26 	subsidies, tax expenditures, and financial 
29.27 	incentives required, and the opportunity cost 
29.28 	of those public investments;
29.29 	(6) the prospects for small modular reactors 
29.30 	and factory-built portable modules with a 
29.31 	capacity up to 300 megawatts, including:
29.32 	(i) the types of technologies available;
29.33 	(ii) current licensing status; and
30.1 	(iii) estimated costs;
30.2 	(7) siting issues, including:
30.3 	(i) the degree to which the requirement for 
30.4 	proximity to water resources sufficient for 
30.5 	cooling purposes restricts possible locations 
30.6 	of nuclear facilities, and what locations 
30.7 	meeting that requirement are available in this 
30.8 	state;
30.9 	(ii) the potential for colocating nuclear 
30.10 	facilities with businesses that demand very 
30.11 	large amounts of electricity;
30.12 	(iii) the environmental impacts of nuclear 
30.13 	facilities, including impacts on the health of 
30.14 	nearby residents;
30.15 	(iv) the prospects for acceptance of nuclear 
30.16 	facilities by host communities, and best 
30.17 	practices for engaging communities on this 
30.18 	issue; and
30.19 	(v) how interconnection and transmission 
30.20 	issues affect potential plant locations;
30.21 	(8) nuclear waste issues, including:
30.22 	(i) the amount and toxicity of radioactive 
30.23 	waste produced by both conventional nuclear 
30.24 	technologies and small modular reactors;
30.25 	(ii) the costs of on-site storage;
30.26 	(iii) the prospects for developing permanent 
30.27 	storage of radioactive waste at either a 
30.28 	federally-owned or privately-owned repository 
30.29 	to which Minnesota's waste could be 
30.30 	transported; and
30.31 	(iv) the feasibility and cost of reprocessing 
30.32 	nuclear waste;
31.1 	(9) the economic impacts of various nuclear 
31.2 	technologies on a host community, including:
31.3 	(i) increased employment levels during 
31.4 	construction and operations;
31.5 	(ii) increased local economic activity resulting 
31.6 	from purchases made by the nuclear-powered 
31.7 	facility and the facility's employees; and
31.8 	(iii) potential tax revenue to local 
31.9 	communities, local schools, and the state;
31.10 	(10) impacts of new nuclear-powered electric 
31.11 	generating plants on public safety officials and 
31.12 	emergency responders in host communities 
31.13 	and adjacent areas with respect to emergency 
31.14 	planning efforts;
31.15 	(11) system integration, including impacts on 
31.16 	grid flexibility, compatibility with high levels 
31.17 	of renewable energy, ramping capability, and 
31.18 	implications for achieving Minnesota's 
31.19 	greenhouse gas reduction goals;
31.20 	(12) how new nuclear generation could 
31.21 	accelerate or delay achievement of, and assist 
31.22 	or hinder ongoing compliance with, 
31.23 	Minnesota's statutory greenhouse gas 
31.24 	reduction and carbon-free electricity goals, 
31.25 	including comparison of deployment 
31.26 	timelines;
31.27 	(13) expected timelines from permitting 
31.28 	through operation, including historical 
31.29 	averages and delays for similar projects;
31.30 	(14) current Minnesota statutes and 
31.31 	administrative rules that would require 
31.32 	modification in order to enable the 
32.1 	construction and operation of advanced 
32.2 	nuclear reactors;
32.3 	(15) the feasibility of replacing retiring 
32.4 	generation assets in host communities with 
32.5 	advanced nuclear reactors; and
32.6 	(16) the workforce required and available, and 
32.7 	the training capacity necessary to construct 
32.8 	and operate new nuclear reactors.
32.9 	(d) The study must be conducted transparently, 
32.10 	with all data, assumptions, and models 
32.11 	publicly available.
32.12 	(e) No later than February 1, 2027, the 
32.13 	commission must submit the study to the 
32.14 	chairs and ranking minority members of the 
32.15 	senate and house of representatives 
32.16 	committees responsible for energy policy and 
32.17 	finance.

32.18 	Sec. 7. TRANSFERS.
 32.19 	(a) $2,000,000 in fiscal year 2027 is transferred from the renewable development account 
32.20 	in the special revenue fund to the geothermal planning grant account under Minnesota 
32.21 	Statutes, section 216C.47, subdivision 3. This is a onetime transfer.
32.22 	(b) $4,465,000 in fiscal year 2027 is transferred from the renewable development account 
32.23 	in the special revenue fund to the preweatherization account under Minnesota Statutes, 
32.24 	section 216C.264, subdivision 1c. This is a onetime transfer.

32.25 	Sec. 8. RENEWABLE DEVELOPMENT ACCOUNT; ONETIME REDUCTION.
 32.26 	(a) The amount transferred to the renewable development account under Minnesota 
32.27 	Statutes, section 116C.779, subdivision 1, paragraph (c), on January 15, 2027, is reduced 
32.28 	by $2,000,000.
32.29 	(b) The amount transferred to the renewable development account under Minnesota 
32.30 	Statutes, section 116C.779, subdivision 1, paragraph (d), on January 15, 2027, is reduced 
32.31 	by $2,000,000.
33.1 	(c) The public utility subject to Minnesota Statutes, section 116C.779, must reduce the 
33.2 	public utility's cost recovery under Minnesota Statutes, section 216B.1645, subdivision 2, 
33.3 	to reflect the reduced transfers in paragraphs (a) and (b) in calendar year 2027.

	ARTICLE 1	ENERGY FINANCE AND POLICY........	Page.Ln 1.13	
	ARTICLE 2	RENEWABLE DEVELOPMENT FINANCE........	Page.Ln 20.26