1.1 	A bill for an act
1.2 	relating to energy; establishing goal of wind power
1.3 	usage at 20 percent by 2020; establishing wind energy
1.4 	conversion system loan guarantee program; amending
1.5 	Minnesota Statutes 2004, section 216B.1691,
1.6 	subdivision 1, by adding a subdivision; proposing
1.7 	coding for new law in Minnesota Statutes, chapter 216C.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2004, section 216B.1691,
1.10 	subdivision 1, is amended to read:
1.11 		Subdivision 1.Definitions.  (a) Unless otherwise
1.12 	specified in law, "eligible energy technology" means an energy
1.13 	technology that:
1.14 	(1) generates electricity from the following renewable
1.15 	energy sources:  solar; wind; hydroelectric with a capacity of
1.16 	less than 60 megawatts; hydrogen, provided that after January 1,
1.17 	2010, the hydrogen must be generated from the resources listed
1.18 	in this clause; or biomass, which includes an energy recovery
1.19 	facility used to capture the heat value of mixed municipal solid
1.20 	waste or refuse-derived fuel from mixed municipal solid waste as
1.21 	a primary fuel; and
1.22 	(2) was not mandated by Laws 1994, chapter 641, or by
1.23 	commission order issued pursuant to that chapter prior to August
1.24 	1, 2001.
1.25 	(b) "Electric utility" means a public utility providing
1.26 	electric service, a generation and transmission cooperative
2.1 	electric association, or a municipal power agency.
2.2 	(c) "Total retail electric sales" means the kilowatt-hours
2.3 	of electricity sold in a year by an electric utility to retail
2.4 	customers of the electric utility or to a distribution utility
2.5 	for distribution to the retail customers of the distribution
2.6 	utility.
2.7 	(d) "Wind energy conversion system" (WECS) has the meaning
2.8 	given it in section 216C.09, subdivision 19, and also includes a
2.9 	qualified wind energy conversion facility defined in section
2.10 	216C.41, subdivision 1, paragraph (c), and any size WECS
2.11 	described in section 272.029, subdivision 1, paragraph (a).

2.12 	Sec. 2. Minnesota Statutes 2004, section 216B.1691, is
2.13 	amended by adding a subdivision to read:
2.14 		Subd. 2a.Wind energy objective:  20 percent by 2020;
2.15 	credits. (a) Each electric utility shall make a good faith
2.16 	effort to generate or procure sufficient electricity generated
2.17 	by wind energy conversion system technology to provide
2.18 	electricity to its retail consumers, or the retail customers of
2.19 	a distribution utility to which the electric utility provides
2.20 	wholesale electric service, so that by December 31, 2020, at
2.21 	least 20 percent of the electric energy provided to retail
2.22 	customers in Minnesota is generated through wind energy
2.23 	conversion systems.
2.24 	(b) By June 1, 2006, and as needed thereafter, the
2.25 	commission shall issue an order detailing the criteria and
2.26 	standards by which it will measure an electric utility's efforts
2.27 	to meet the 20 percent by 2020 wind energy objective of this
2.28 	subdivision to determine whether the utility is progressing and
2.29 	making the required good faith effort.  In this order, the
2.30 	commission shall include criteria and standards that consider
2.31 	technical and delivery feasibilities and that protect against
2.32 	undesirable impacts on the reliability of the utility's system
2.33 	and unreasonable economic impacts on the utility's ratepayers.
2.34 	(c) To facilitate compliance with this subdivision, the
2.35 	commission, by rule or order, shall establish a program for
2.36 	tradable credits among Minnesota electric utilities for
3.1 	electricity generated through wind energy conversion systems
3.2 	located within Minnesota.  In doing so, the commission shall
3.3 	implement a system that constrains or limits the cost of
3.4 	credits, taking care to ensure that such a system does not
3.5 	undermine the market for those credits.  In lieu of generating
3.6 	or procuring energy directly to satisfy the 20 percent by 2020
3.7 	objective of this subdivision, an electric utility may purchase
3.8 	sufficient wind energy credits, issued pursuant to this
3.9 	subdivision from another electric utility located in Minnesota,
3.10 	to meet its objective.  The commission may facilitate the
3.11 	trading of wind energy credits only among electric utilities in
3.12 	Minnesota.

3.13 	Sec. 3. [216C.42] WIND ENERGY LOAN GUARANTEE PROGRAM.
3.14 		Subdivision 1.Rules. The commissioner of commerce, in
3.15 	consultation with the commissioner of finance and the Public
3.16 	Utilities Commission and after any necessary coordination with
3.17 	any related federal programs, shall adopt rules by June 1, 2006,
3.18 	to implement and administer a wind energy loan guarantee program
3.19 	to encourage the financing, construction, and operation in
3.20 	Minnesota of wind energy conversion systems, as defined in
3.21 	section 216B.1691, subdivision 1.  At a minimum, the rules must:
3.22 	(1) guarantee financial institutions that provide financing
3.23 	for a wind energy conversion system that the state will
3.24 	guarantee, in case of a borrower's default, up to 15 percent of
3.25 	the value of the amount financed not to exceed $300,000 for each
3.26 	system;
3.27 	(2) allow the interest rate to be negotiable between the
3.28 	financial institution and borrower, except that one percent on
3.29 	the outstanding balance must be charged annually as a loan
3.30 	guarantee fee and paid to the state and deposited in the account
3.31 	established in subdivision 2;
3.32 	(3) require that the financial institution making a loan
3.33 	guaranteed pursuant to this section must be located in
3.34 	Minnesota; and 
3.35 	(4) require that the wind energy conversion system for
3.36 	which financing is requested, be located in Minnesota.
4.1 	The rules must further define and set forth reasonable and
4.2 	usual terms, conditions, eligibility requirements,
4.3 	responsibilities, and procedures, as desirable or necessary, for
4.4 	administering and for participating in this program and for
4.5 	allocating the property interests of the parties following
4.6 	default.
4.7 		Subd. 2.Wind energy loan guarantee account. The wind
4.8 	energy loan guarantee account is established as a separate
4.9 	account in the special revenue fund.  The account consists of
4.10 	the proceeds of the loan guarantee fees collected annually, any
4.11 	federal money that may be made available for this program, money
4.12 	appropriated or donated to the account, and any interest earned
4.13 	on investments of money in the account.  Money in the account
4.14 	must be disbursed as the first source for payment on default of
4.15 	a loan made pursuant to rules adopted under subdivision 1.
4.16 	
EFFECTIVE DATE. Subdivision 1 of this section is
4.17 	effective the day following final enactment.