HF 1133

1st Division Engrossment - 91st Legislature (2019 - 2020) Posted on 02/17/2020 04:42pm

A bill for an act
relating to solar energy; establishing a grant program to enable school districts to
finance the installation of solar energy systems on school buildings; creating an
account and a reserve account; appropriating money; proposing coding for new
law in Minnesota Statutes, chapter 216C.

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

Section 1.

new text begin [216C.375] SOLAR ON SCHOOLS PROGRAM.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given them.
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new text begin (b) "Developer" means an entity that installs a solar energy system on a building owned
by a school district that has been awarded a grant under this section.
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new text begin (c) "Energy storage system" means a commercially available technology capable of:
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new text begin (1) absorbing and storing electrical energy; and
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new text begin (2) dispatching stored electrical energy at a later time.
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new text begin (d) "Investor" means an entity that finances the design, purchase, installation, operation,
and maintenance of a solar energy system installed at a school building in a school district
that received a grant under this section.
new text end

new text begin (e) "Photovoltaic device" has the meaning given in section 216C.06, subdivision 16.
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new text begin (f) "School district" means an independent or special school district.
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new text begin (g) "Solar energy system" means photovoltaic devices installed alone or in conjunction
with an energy storage system.
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new text begin Subd. 2. new text end

new text begin Establishment; purpose. new text end

new text begin A solar on schools program is established in the
Department of Commerce. The purpose of the program is to provide grants to stimulate the
installation of solar energy systems in school districts throughout the state by reducing the
cost of solar energy system purchases and installations.
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new text begin Subd. 3. new text end

new text begin Establishment of reserve accounts. new text end

new text begin (a) A solar on schools program reserve
account number 1 is established in the renewable development fund. Money received from
the renewable development fund must be transferred to the commissioner of commerce and
credited to this account. Money in the account is held in the account and does not lapse.
new text end

new text begin (b) A solar on schools program reserve account number 2 is established in the renewable
development fund. Money received from the general fund must be transferred to the
commissioner of commerce and credited to this account. Money in the account is held in
the account and does not lapse.
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new text begin (c) When a grant is awarded under this section, the commissioner shall reserve the grant
amount in the applicable account.
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new text begin (d) The money in the reserve accounts established in this subdivision enables a school
district to fulfill its legal commitment made in a power purchase agreement under subdivision
6 to acquire the financial interest of an investor in a solar energy system installed on a school
district building, which acquisition makes the investor's investment in the solar energy
system financially viable.
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new text begin Subd. 4. new text end

new text begin Expenditures. new text end

new text begin (a) Money in the account and reserve account may be used only:
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new text begin (1) for grant awards made under this section; and
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new text begin (2) to pay the reasonable costs incurred by the department to administer this section.
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new text begin (b) Grant awards made with funds in reserve account number 1 are to be used only for
grants for solar energy systems installed on school buildings receiving retail electric service
from a public utility that is subject to section 116C.779, subdivision 1.
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new text begin (c) Grant awards made with funds in reserve account number 2 are to be used only for
grants for solar energy systems installed on school buildings receiving retail electric service
from a utility that is not subject to section 116C.779, subdivision 1.
new text end

new text begin Subd. 5. new text end

new text begin Eligible system. new text end

new text begin A grant may be awarded under this section to an eligible school
district only if the solar energy system that is the subject of the grant:
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new text begin (1) is placed on, adjacent to, or in proximity to the school district building using the
electricity generated; and
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new text begin (2) has a capacity that does not exceed one megawatt or 120 percent of the estimated
electric load of the school district building at which the solar energy system is proposed to
be installed, whichever is less.
new text end

new text begin Subd. 6. new text end

new text begin Power purchase agreement; design. new text end

new text begin The commissioner shall design a power
purchase agreement that must be used by an applicant seeking a grant under this section
and an investor. The power purchase agreement must:
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new text begin (1) make the commissioner a party to the power purchase agreement;
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new text begin (2) contain a formula to calculate the future fair market value of the solar energy system;
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new text begin (3) contain a formula to calculate the future value of payments to be made by the school
district to the investor under the power purchase agreement in the absence of an acquisition
described in clause (6);
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new text begin (4) specify an escalator for the allowable rate of increase for costs over the term of the
power purchase agreement of the utility providing retail electricity service to the school at
which the solar energy system is located;
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new text begin (5) not exceed a term of 20 years; and
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new text begin (6) specify the estimated date when the school district will acquire the remaining financial
interest of the investor in the solar energy system in a lump sum payment and terminate the
power purchase agreement.
new text end

new text begin Subd. 7. new text end

new text begin Ancillary agreement. new text end

new text begin At the same time they enter into the power purchase
agreement, the school district and the investor may, at the school district's sole discretion,
enter into a separate agreement requiring the investor to continue to be responsible for
operating and maintaining the solar energy system through the term of the original power
purchase agreement.
new text end

new text begin Subd. 8. new text end

new text begin Adjustment. new text end

new text begin (a) Every five years after entering into the power purchase
agreement, and 90 days prior to the proposed termination of the power purchase agreement,
the school district and the investor shall reexamine the projected values based on the formulas
in the power purchase agreement described in subdivision 6, clauses (2) to (4).
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new text begin (b) The parties must notify the commissioner of any significant adjustments that should
be made to the forecasts of future values in those clauses based on experience under the
power purchase agreement or for other reasons.
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new text begin (c) The commissioner shall review the adjustments requested by the parties, and shall
approve the adjustments if the commissioner determines the adjustments to be:
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new text begin (1) reasonable;
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new text begin (2) unforeseeable to the parties at the time the power purchase agreement was entered
into or at the previous reexamination of the projected values; and
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new text begin (3) in the public interest.
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new text begin (d) The commissioner shall adjust the grant amount reserved in the applicable reserve
account for the solar energy system in accord with adjustments approved under this
subdivision.
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new text begin Subd. 9. new text end

new text begin Application process. new text end

new text begin (a) The commissioner shall issue a request for proposals
to developers who may wish to apply for a grant under this section on behalf of a school
district.
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new text begin (b) A developer must submit an application to the commissioner on behalf of a school
district on a form prescribed by the commissioner. The form must include, at a minimum,
the following information:
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new text begin (1) the capacity of the proposed solar energy system and the amount of electricity that
is expected to be generated;
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new text begin (2) the current energy demand of the school building on which the solar energy generating
system is to be installed;
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new text begin (3) the size of any energy storage system that is proposed to be installed as part of a
solar energy system;
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new text begin (4) the total cost of purchasing and installing the solar energy system and its life-cycle
cost;
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new text begin (5) a copy of the proposed power purchase agreement between the school district and
an investor;
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new text begin (6) a plan for how the school will make the solar energy system serve as a visible learning
tool for students, teachers, and visitors to the school, including how the solar energy system
may be integrated into the school's curriculum;
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new text begin (7) information that demonstrates the need of the school district for financial assistance
available under this section;
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new text begin (8) information that demonstrates the readiness of the school district to implement the
project, including but not limited to the availability of the land on which the solar energy
system is to be installed, and the level of the school district's engagement with the utility
providing electric service to the school building on which the solar energy system is to be
installed on issues relevant to the implementation of the project, including metering and
other issues; and
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new text begin (9) any other information deemed relevant by the commissioner.
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new text begin (c) The commissioner shall develop a quantitative weighting system for the information
provided in the application in order to rank applications. The weighting system must be
provided to all applicants before an applicant submits an application.
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new text begin (d) The commissioner shall develop administrative procedures governing the application
and grant award process.
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new text begin Subd. 10. new text end

new text begin Energy conservation review. new text end

new text begin At the commissioner's request, the school
district shall provide the commissioner information regarding energy conservation measures
implemented at the school building at which the solar energy system is to be installed. The
commissioner may make recommendations to the school district regarding cost-effective
conservation measures it can implement and may provide technical assistance and direct
the school district to available financial assistance programs.
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new text begin Subd. 11. new text end

new text begin Duties of the commissioner. new text end

new text begin The commissioner shall:
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new text begin (1) provide technical assistance to school districts to develop and execute projects; and
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new text begin (2) convene an advisory committee composed of representatives of solar energy
developers, school districts, and investors to develop procedures and policies that result in
the successful operation of the program established under this section.
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new text begin Subd. 12. new text end

new text begin Grant payments. new text end

new text begin The commissioner shall use grant money from the reserve
accounts established under subdivision 3 to make:
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new text begin (1) annual payments to the investor to acquire a portion of the investor's financial interest
in the solar energy system, as specified in the power purchase agreement; and
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new text begin (2) a lump sum payment to the investor to acquire the investor's remaining financial
interest in the solar energy system, as specified in the power purchase agreement.
new text end

new text begin Subd. 13. new text end

new text begin Application deadline. new text end

new text begin No application may be made under this section after
December 31, 2023.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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Sec. 2. new text begin APPROPRIATION.
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new text begin (a) Notwithstanding Minnesota Statutes, section 116C.779, subdivision 1, paragraph (j),
$16,000,000 in fiscal year 2020 is appropriated from the renewable development fund under
Minnesota Statutes, section 116C.779, subdivision 1, to the commissioner of commerce for
the purpose of conducting the program established in Minnesota Statutes, section 216C.375.
The commissioner of commerce shall deposit the appropriation in the account established
in Minnesota Statutes, section 216C.375, subdivision 3, paragraph (a).
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new text begin (b) $16,000,000 in fiscal year 2020 is appropriated from the general fund to the
commissioner of commerce for the purpose of conducting the program established in
Minnesota Statutes, section 216C.375. The commissioner of commerce shall deposit the
appropriation in the account established in Minnesota Statutes, section 216C.375, subdivision
3, paragraph (b).
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end