HF 1592

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; allowing Public Utilities
Commission to develop financial incentives for
utilities to encourage community-based generation
projects; providing price incentives to encourage
purchase of renewable energy; requiring utilities to
consider using community-based generation projects to
address transmission inadequacies; requiring
reliability administrator to conduct interconnection
studies at request of community-based generation
projects; amending Minnesota Statutes 2004, sections
216B.1611, subdivision 2; 216B.169, subdivision 2;
216B.2411, subdivision 1; 216B.2425, subdivision 2;
216C.052, subdivision 1.

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

Section 1.

Minnesota Statutes 2004, section 216B.1611,
subdivision 2, is amended to read:

Subd. 2.

Distributed generation; generic proceeding.

(a)
The commission shall initiate a proceeding within 30 days of
July 1, 2001, to establish, by order, generic standards for
utility tariffs for the interconnection and parallel operation
of distributed generation fueled by natural gas or a renewable
fuel, or another similarly clean fuel or combination of fuels of
no more than ten megawatts of interconnected capacity. At a
minimum, these tariff standards must:

(1) to the extent possible, be consistent with industry and
other federal and state operational and safety standards;

(2) provide for the low-cost, safe, and standardized
interconnection of facilities;

(3) take into account differing system requirements and
hardware, as well as the overall demand load requirements of
individual utilities;

(4) allow for reasonable terms and conditions, consistent
with the cost and operating characteristics of the various
technologies, so that a utility can reasonably be assured of the
reliable, safe, and efficient operation of the interconnected
equipment; and

(5) establish (i) a standard interconnection agreement that
sets forth the contractual conditions under which a company and
a customer agree that one or more facilities may be
interconnected with the company's utility system, and (ii) a
standard application for interconnection and parallel operation
with the utility system.

(b) The commission may develop financial incentives based
on a public utility's performance in encouraging residential and
small business customers to participate in on-site generation new text begin ,
including community-based generation projects in remote
locations that cooperatively allocate the energy generated to
project owners new text end .

Sec. 2.

Minnesota Statutes 2004, section 216B.169,
subdivision 2, is amended to read:

Subd. 2.

Renewable and high-efficiency energy rate
options.

(a) Each utility shall offer its customers, and shall
advertise the offer at least annually, one or more options that
allow a customer to determine that a certain amount of the
electricity generated or purchased on behalf of the customer is
renewable energy or energy generated by high-efficiency,
low-emissions, distributed generation such as fuel cells and
microturbines fueled by a renewable fuel.

(b) Each public utility shall file an implementation plan
within 90 days of July 1, 2001, to implement paragraph (a).

(c) Rates charged to customers must be calculated using the
utility's cost of acquiring the energy for the customer and must:

(1) reflect the difference between the cost of generating
or purchasing the renewable energy and the cost of generating or
purchasing the same amount of nonrenewable energy; deleted text begin and
deleted text end

(2) be distributed on a per kilowatt-hour basis among all
customers who choose to participate in the program new text begin ; and
new text end

new text begin (3) offer declining block pricing as an incentive for
consumers to purchase larger amounts of electricity generated
from renewable sources of energy new text end .

(d) Implementation of these rate options may reflect a
reasonable amount of lead time necessary to arrange acquisition
of the energy. The utility may acquire the energy demanded by
customers, in whole or in part, through procuring or generating
the renewable energy directly, or through the purchase of
credits from a provider that has received certification of
eligible power supply pursuant to subdivision 3. If a utility
is not able to arrange an adequate supply of renewable or
high-efficiency energy to meet its customers' demand under this
section, the utility must file a report with the commission
detailing its efforts and reasons for its failure.

Sec. 3.

Minnesota Statutes 2004, section 216B.2411,
subdivision 1, is amended to read:

Subdivision 1.

Generation projects.

(a) Any municipality
or rural electric association providing electric service and
subject to section 216B.241 that is meeting the objectives under
section 216B.1691 may, and each public utility may, use five
percent of the total amount to be spent on energy conservation
improvements under section 216B.241, on:

(1) new text begin community-based energy development new text end projects in
Minnesota to construct an electric generating facility that
utilizes eligible renewable energy sources as defined in
subdivision 2, such as methane or other combustible gases
derived from the processing of plant or animal wastes, biomass
fuels such as short-rotation woody or fibrous agricultural
crops, or other renewable fuel, as its primary fuel source; or

(2) projects in Minnesota to install a distributed
generation facility of ten megawatts or less of interconnected
capacity that is fueled by natural gas, renewable fuels, or
another similarly clean fuel.

(b) For public utilities, as defined under section 216B.02,
subdivision 4, projects under this section must be considered
energy conservation improvements as defined in section
216B.241. For cooperative electric associations and municipal
utilities, projects under this section must be considered
load-management activities described in section 216B.241,
subdivision 1, paragraph (i).

Sec. 4.

Minnesota Statutes 2004, section 216B.2425,
subdivision 2, is amended to read:

Subd. 2.

List development.

(a) By November 1 of each
odd-numbered year, each public utility, municipal utility, and
cooperative electric association, or the generation and
transmission organization that serves each utility or
association, that owns or operates electric transmission lines
in Minnesota shall jointly or individually submit a transmission
projects report to the commission. The report must:

(1) list specific present and reasonably foreseeable future
inadequacies in the transmission system in Minnesota;

(2) identify alternative means of addressing each
inadequacy listed new text begin , including through increasing the number of
community-based energy generation projects new text end ;

(3) identify general economic, environmental, and social
issues associated with each alternative; and

(4) provide a summary of public input the utilities and
associations have gathered related to the list of inadequacies
and the role of local government officials and other interested
persons in assisting to develop the list and analyze
alternatives.

(b) To meet the requirements of this subdivision, entities
may rely on available information and analysis developed by a
regional transmission organization or any subgroup of a regional
transmission organization and may develop and include additional
information as necessary.

Sec. 5.

Minnesota Statutes 2004, section 216C.052,
subdivision 1, is amended to read:

Subdivision 1.

Responsibilities.

(a) There is
established the position of reliability administrator in the
Department of Commerce. The administrator shall act as a source
of independent expertise and a technical advisor to the
commissioner, the commission, the public, and the Legislative
Electric Energy Task Force on issues related to the reliability
of the electric system. In conducting its work, the
administrator shall:

(1) model and monitor the use and operation of the energy
infrastructure in the state, including generation facilities,
transmission lines, natural gas pipelines, and other energy
infrastructure;

(2) develop and present to the commission and parties
technical analyses of proposed infrastructure projects, deleted text begin and
deleted text end provide technical advice to the commission new text begin , and, upon request of
an owner of any community-based energy project that meets the
specifications of section 216C.41, subdivision 1, paragraph (c),
clause (2) or (3), conduct analysis necessary to facilitate the
interconnection of the community-based energy project to the
electricity transmission or distribution system new text end ;

(3) present independent, factual, expert, and technical
information on infrastructure proposals and reliability issues
at public meetings hosted by the task force, the Environmental
Quality Board, the department, or the commission.

(b) Upon request and subject to resource constraints, the
administrator shall provide technical assistance regarding
matters unrelated to applications for infrastructure
improvements to the task force, the department, or the
commission.

(c) The administrator may not advocate for any particular
outcome in a commission proceeding, but may give technical
advice to the commission as to the impact on the reliability of
the energy system of a particular project or projects. The
administrator must not be considered a party or a participant in
any proceeding before the commission.

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 5 are effective the day following final
enactment.
new text end