HF 1320

as introduced - 89th Legislature (2015 - 2016) Posted on 03/02/2015 01:20pm

A bill for an act
relating to energy; conservation; modifying eligibility for energy conservation
plans; establishing a Made in Minnesota energy storage system rebate program;
appropriating money; amending Minnesota Statutes 2014, section 216B.241,
subdivision 1, by adding a subdivision; proposing coding for new law in
Minnesota Statutes, chapter 216C.

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

Section 1.

Minnesota Statutes 2014, section 216B.241, subdivision 1, is amended to
read:

Subdivision 1.

Definitions.

For purposes of this section and section 216B.16,
subdivision 6b, the terms defined in this subdivision have the meanings given them.

(a) "Commission" means the Public Utilities Commission.

(b) "Commissioner" means the commissioner of commerce.

(c) "Department" means the Department of Commerce.

(d) "Energy conservation" means demand-side management of energy supplies
resulting in a net reduction in energy use. Load management that reduces overall energy
use is energy conservation.

(e) "Energy conservation improvement" means a project that results in energy
efficiency or energy conservation. Energy conservation improvement may include waste
heat that is recovered and converted into electricity, but does not include electric utility
infrastructure projects approved by the commission under section 216B.1636. Energy
conservation improvement also includes waste heat recovered and used as thermal energy.

(f) "Energy efficiency" means measures or programs, including energy conservation
measures or programs, that target consumer behavior, equipment, processes, or devices
designed to produce either an absolute decrease in consumption of electric energy or natural
gas or a decrease in consumption of electric energy or natural gas on a per unit of production
basis without a reduction in the quality or level of service provided to the energy consumer.

new text begin (g) "Energy storage system" has the meaning given in section 216C.417, subdivision
1.
new text end

deleted text begin (g) deleted text end new text begin (h) new text end "Gross annual retail energy sales" means annual electric sales to all retail
customers in a utility's or association's Minnesota service territory or natural gas
throughput to all retail customers, including natural gas transportation customers, on a
utility's distribution system in Minnesota. For purposes of this section, gross annual
retail energy sales exclude:

(1) gas sales to:

(i) a large energy facility;

(ii) a large customer facility whose natural gas utility has been exempted by the
commissioner under subdivision 1a, paragraph (b), with respect to natural gas sales made
to the large customer facility; and

(iii) a commercial gas customer facility whose natural gas utility has been exempted
by the commissioner under subdivision 1a, paragraph (c), with respect to natural gas sales
made to the commercial gas customer facility; and

(2) electric sales to a large customer facility whose electric utility has been exempted
by the commissioner under subdivision 1a, paragraph (b), with respect to electric sales
made to the large customer facility.

deleted text begin (h) deleted text end new text begin (i) new text end "Investments and expenses of a public utility" includes the investments
and expenses incurred by a public utility in connection with an energy conservation
improvement, including but not limited to:

(1) the differential in interest cost between the market rate and the rate charged on a
no-interest or below-market interest loan made by a public utility to a customer for the
purchase or installation of an energy conservation improvement;

(2) the difference between the utility's cost of purchase or installation of energy
conservation improvements and any price charged by a public utility to a customer for
such improvements.

deleted text begin (i) deleted text end new text begin (j) new text end "Large customer facility" means all buildings, structures, equipment, and
installations at a single site that collectively (1) impose a peak electrical demand on an
electric utility's system of not less than 20,000 kilowatts, measured in the same way as the
utility that serves the customer facility measures electrical demand for billing purposes or
(2) consume not less than 500 million cubic feet of natural gas annually. In calculating
peak electrical demand, a large customer facility may include demand offset by on-site
cogeneration facilities and, if engaged in mineral extraction, may aggregate peak energy
demand from the large customer facility's mining and processing operations.

deleted text begin (j) deleted text end new text begin (k) new text end "Large energy facility" has the meaning given it in section 216B.2421,
subdivision 2, clause (1).

deleted text begin (k) deleted text end new text begin (l) new text end "Load management" means an activity, service, or technology to change the
timing or the efficiency of a customer's use of energy that allows a utility or a customer to
respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.

deleted text begin (l) deleted text end new text begin (m) new text end "Low-income programs" means energy conservation improvement programs
that directly serve the needs of low-income persons, including low-income renters.

deleted text begin (m) deleted text end new text begin (n) new text end "Qualifying utility" means a utility that supplies the energy to a customer
that enables the customer to qualify as a large customer facility.

deleted text begin (n) deleted text end new text begin (o) new text end "Waste heat recovered and used as thermal energy" means capturing
heat energy that would otherwise be exhausted or dissipated to the environment from
machinery, buildings, or industrial processes and productively using such recovered
thermal energy where it was captured or distributing it as thermal energy to other locations
where it is used to reduce demand-side consumption of natural gas, electric energy, or both.

deleted text begin (o) deleted text end new text begin (p) new text end "Waste heat recovery converted into electricity" means an energy recovery
process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
for engines or manufacturing or industrial processes, or the reduction of high pressure
in water or gas pipelines.

Sec. 2.

Minnesota Statutes 2014, section 216B.241, is amended by adding a
subdivision to read:

new text begin Subd. 5e. new text end

new text begin Energy storage systems. new text end

new text begin (a) The commissioner shall work with all
utilities, cooperatives, and municipalities to include the use of energy storage systems in
conservation plan programs under this section.
new text end

new text begin (b) A utility, cooperative, or municipality may include in its conservation plan
programs under this section utility-controlled energy storage devices, to the extent the
energy storage device is eligible under section 216C.417, subdivisions 1 and 3. The
cost-effectiveness of an energy storage system may be determined by a different standard
than for other energy conservation improvements under this section if the commissioner
determines it is in the public interest to do so in order to encourage energy storage system
installation and use. Energy savings from energy storage systems may be counted
toward the minimum energy-savings goal of at least one percent for energy conservation
improvements required under subdivision 1c, and may, if the conservation plan is
approved, be considered when establishing performance incentives under subdivision 2c.
new text end

new text begin (c) For the purposes of this subdivision, the energy savings estimate shall be
calculated by multiplying the installed capacity, in kilowatts, of eligible energy storage
devices by the hours of availability during peak demand periods.
new text end

new text begin (d) For the purposes of this subdivision, the peak demand savings estimate shall
equal the total installed capacity, in kilowatts, of installed eligible energy storage capacity.
new text end

Sec. 3.

new text begin [216C.417] MADE IN MINNESOTA ENERGY STORAGE SYSTEMS
REBATE.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin (a) For the purposes of this section, "Made in Minnesota
energy storage system" means energy storage systems:
new text end

new text begin (1) manufactured at a facility located in Minnesota that is registered and authorized
to manufacture and apply the Underwriters Laboratory (UL) 1741 certification mark to
energy storage systems by UL, CSA International, Intertek, or an equivalent UL-approved
independent certification agency;
new text end

new text begin (2) that bear UL 1741 certification marks from UL, CSA International, Intertek, or
an equivalent UL-approved independent certification agency, which must be physically
applied to the energy storage system at a manufacturing facility described in clause (1); and
new text end

new text begin (3) manufactured in Minnesota by a manufacturing process that must include
assembly and testing of a complete energy storage system, including batteries, direct
current to alternating current power conversion, and communications interface.
new text end

new text begin (b) An energy storage system that has received UL 1741 certification marks
outside Minnesota from UL, CSA International, Intertek, or an equivalent UL-approved
independent certification agency is not Made in Minnesota under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Rebate program created; limitation. new text end

new text begin (a) The commissioner of commerce
shall administer a program to provide rebates for the installation of Made in Minnesota
energy storage systems in the state. Rebates are intended to offset the cost of the energy
storage systems and may be awarded for up to 50 percent of an energy storage system's
total cost. Rebates may be paid directly to the utility or the customer.
new text end

new text begin (b) A rebate under this section may only be issued for an eligible Made in Minnesota
energy storage system located within the service territory of a utility identified in section
116C.779.
new text end

new text begin Subd. 3. new text end

new text begin Additional system requirements. new text end

new text begin (a) The commissioner of commerce
may issue rebates only for utility-controlled, customer-sited energy storage systems.
new text end

new text begin (b) In order to be eligible for a rebate under this section, a Made in Minnesota
energy storage system must:
new text end

new text begin (1) be rated for up to 40 kilowatts in electrical output;
new text end

new text begin (2) provide at least one hour of continuous operation at full rated output; and
new text end

new text begin (3) be capable of supplying backup power in the event of an electrical grid outage.
new text end

new text begin (c) The utility, cooperative, or municipality may elect to own a Made in Minnesota
energy storage system or establish a program that provides incentives to customers that
purchase and install eligible energy storage equipment.
new text end

new text begin Subd. 4. new text end

new text begin Account; funding. new text end

new text begin (a) A Made in Minnesota energy storage system rebate
account is created as a separate account in the special revenue fund in the state treasury.
Earnings, such as interest, dividends, and any other earnings arising from account assets,
must be credited to the account. Funds in the account are appropriated to the commissioner
of commerce to make rebate payments for eligible Made in Minnesota energy storage
systems under this section, and to administer this section.
new text end

new text begin (b) Beginning January 1, 2016, and each January 1 thereafter to January 1, 2025,
the commissioner of management and budget shall annually transfer $5,000,000 from the
renewable development account under section 116C.779 to the Made in Minnesota energy
storage system rebate account under paragraph (a).
new text end

new text begin (c) To the extent there are sufficient applications, the commissioner shall annually
spend for rebates under this section from 2016 to 2025, for a total of ten years,
approximately $5,000,000 per year. If sufficient applications are not received to spend
the money available for rebates in a year under this section, the unspent money must be
returned to the account from which it was transferred, provided that funds available for
2016 applications shall remain available for 2017 applications.
new text end

new text begin Subd. 5. new text end

new text begin Application process. new text end

new text begin Applications for rebates must be made to the
commissioner of commerce on forms provided by the commissioner. The commissioner
shall use a random process for the selection of recipients of rebates, except as otherwise
required by this section.
new text end

new text begin Subd. 6. new text end

new text begin Energy conservation improvement; eligibility. new text end

new text begin Made in Minnesota
energy storage systems are eligible for inclusion in energy conservation plans under
section 216B.241, subject to the limitations set forth in section 216B.241, subdivision 5e.
new text end

Sec. 4. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 3 are effective the day following final enactment.
new text end