HF 218

2nd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; extending eligibility to receive
the renewable energy production incentive under
certain circumstances; amending Minnesota Statutes
2004, section 216C.41, subdivision 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 216C.41,
subdivision 3, is amended to read:

Subd. 3.

Eligibility window.

Payments may be made under
this section only for electricity generated:

(1) from a qualified hydroelectric facility that is
operational and generating electricity before December 31,
deleted text begin 2005 deleted text end new text begin 2007 new text end ;

(2) from a qualified wind energy conversion facility that
is operational and generating electricity before January 1,
2007; or

(3) from a qualified on-farm biogas recovery facility from
July 1, 2001, through December 31, 2017.

Sec. 2. new text begin RENEWABLE DEVELOPMENT FUND; RENEWABLE ENERGY
PRODUCTION INCENTIVE EXTENSION.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin This section applies to renewable
energy production incentives funded by the renewable development
account under Minnesota Statutes, section 116C.779. Minnesota
Statutes, section 216C.41, governs the approval for and terms of
the incentives except as modified by this section.
new text end

new text begin Subd. 2. new text end

new text begin Definition. new text end

new text begin For the purpose of this section,
"lapse period" means the period from January 1, 2004, to October
22, 2004.
new text end

new text begin Subd. 3. new text end

new text begin Previously approved applicant. new text end

new text begin An applicant who
received a letter of approval from the commissioner of commerce
under Minnesota Statutes, section 216C.41, subdivision 7, may,
if any part of the lapse period occurred within 18 months after
receipt of the approval, seek to extend the 18-month eligibility
period by submitting to the commissioner the following:
new text end

new text begin (1) evidence that all required interconnection and delivery
studies for the qualifying project have been completed and an
interconnection agreement signed by all the parties has been
executed. If the interconnection agreement requires
improvements to be made to the transmission system, the
applicant must provide evidence that equity and debt financing
sufficient to pay the cost of those improvements is secured and
that construction of the improvements can be expected to be
completed by the date the proposed extension will expire; and
new text end

new text begin (2) documents demonstrating that the project has secured
equity and debt financing sufficient to complete the project by
the date the proposed extension will expire.
new text end

new text begin If the commissioner determines that the applicant has
complied with clauses (1) and (2), the commissioner shall,
within 30 days of receiving the submission, notify the applicant
that the 18-month period is extended by the length of time of
the lapse period occurring within the 18-month period,
notwithstanding any provision making the credit retroactive. If
the federal production credit has lapsed when the commissioner
determines whether the applicant has made the submission
required by clauses (1) and (2), the commissioner shall extend
the 18-month eligibility period for 12 months.
new text end

new text begin If the commissioner determines that an applicant has failed
to comply with the requirement for obtaining an extension, the
commissioner shall notify the applicant that an extension of the
18-month eligibility period is denied.
new text end

new text begin Subd. 4. new text end

new text begin Previously unapproved projects. new text end

new text begin An applicant
who filed an application prior to January 1, 2005, but who has
not received a letter of approval may qualify to receive the
incentive by making the submissions described in subdivision 3,
clauses (1) and (2), to the commissioner by December 31, 2005.
If the commissioner determines that an applicant has complied
with subdivision 3, clauses (1) and (2), the commissioner shall,
within 30 days of receiving the submission, notify the applicant
that the project qualifies to receive the incentive and shall
provide the applicant with a letter of approval.
new text end

new text begin An applicant receiving a letter of approval dated January
1, 2005, or later, must first offer for sale to the public
utility the electricity generated by the project and associated
renewable energy credits. The parties shall negotiate a price
within 120 days. The public utility shall provide its last best
price offer to the applicant in writing, which is binding for no
less than 120 days. The applicant may negotiate with any other
utility and may accept a price higher than the binding price
offered by the public utility. If another utility offers a
price equal to or lower than the binding price offered by the
public utility, the applicant must contract with the public
utility at the binding price. For the purpose of this
subdivision, "public utility" means any utility operating a
nuclear power plant in this state.
new text end

new text begin Subd. 5. new text end

new text begin Incentive amount. new text end

new text begin The incentive for a facility
receiving an extension or a letter of approval under this
section is one cent per kilowatt hour.
new text end

new text begin Subd. 6. new text end

new text begin Additional funding. new text end

new text begin If funds in the renewable
development account, allocated under Minnesota Statutes, section
116C.779, subdivision 2, for wind energy incentives are
insufficient to fully fund incentives under this section, other
funds in the renewable development account must be allocated to
make up the insufficiency.
new text end

new text begin Subd. 7. new text end

new text begin Notice. new text end

new text begin The commissioner must, within 30 days
of the effective date of this act, notify persons eligible to
apply for an extension or a letter of approval under this
section of the provisions of this act.
new text end

new text begin Subd. 8. new text end

new text begin Additional incentive payment. new text end

new text begin This subdivision
governs the allocation of the $4,500,000 allocated annually to
fund incentives for up to 100 megawatts of wind power under
Minnesota Statutes, section 116C.779, subdivision 2. If the
commissioner of commerce determines that the wind incentive
payments at 1.5 cents per kilowatt hour for some projects and at
one cent per kilowatt hour for applicants either extended or
receiving a letter of approval under this section does not fully
spend the $4,500,000 due to any reason, then the commissioner
shall make the incentive payment adjustment provided for in this
subdivision unless the commissioner finds that to do so would be
contrary to the public interest to encourage wind development.
new text end

new text begin The incentive adjustment is payable only for those wind
projects that received an extension under subdivision 3 and for
projects receiving a letter of approval under subdivision 4.
new text end

new text begin The commissioner shall determine the unspent balance and
distribute it as incentive payments on the basis of the
percentage of a project's kilowatt-hours energy generation of
the total kilowatt-hours energy generation of all projects
receiving an extension under subdivision 3 or a letter of
approval under subdivision 4.
new text end

new text begin A project may not receive a total of incentive payments
that exceeds 1.5 cents per kilowatt hour.
new text end

new text begin The commissioner may recalculate incentive payments more
than once under this subdivision.
new text end

Sec. 3. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 and 2 are effective the day following final
enactment.
new text end